This week, the federal government announced that it has already used up a $349 billion stimulus package for small businesses. Here’s how this impacts Western North Carolina...
Kai Schmoll owns Blue Ridge Event Staffing, a company that staffs events. He says he applied for the Paycheck Protection Program, known as PPP, about 3 weeks ago. He heard Friday won’t get a loan.
“I’m telling you this is starting to feel more and more like 2008,” says Schmoll.
Schmoll was hit hard by the 2008 recession - that's when he and his husband decided to move back to his native Asheville from Los Angeles. Schmoll started the event business in 2012 after years working in the service industry and acting. But like other tourism-based businesses in the region, all his contracts dried up following stay-at-home orders.
“I can’t imagine that I’m the only small business in Asheville- that is you know such a predominantly service based industry - that has been hit so hard,” says Schmoll.
Schmoll started Blue Ridge Events after taking a class through Mountain Bizworks, a nonprofit lender(NCDFI). Mountain Bizworks announced last week it was offering a PPP loan backed by $2 million from Dogwood Health Trust, the foundation established after Mission Health’s sale to for-profit HCA. The money would front loans until they are forgiven by the Small Business Administration. The loans are only forgiven if employers meet certain criteria. The fact that lenders have to pay businesses then wait for government refunds has been a stumbling block in distributing loans.
Matt Raker, executive Director of Mountain Bizworks says updates about stimulus programs are being announced almost every day.
“With all of the different resources, loan programs and financing programs that have been rolled out. It’s been a lot for business owners to navigate - it’s been a lot for us as lenders to navigate,” says Raker. These updates have often been changes to the paperwork required to apply for the loan.
Since the U.S. Small Business Association is out of money, Raker says the PPP program is now frozen. In the week that the program was open, Mountain Bizworks approved over 100 PPP loans totaling $3 million dollars in funding. These loans gave priority to women and minority-led businesses.
One recipient was Debra Hedden who runs Franklin-based Luxury Therapeutics.
“I’m 58 and my mom is my business partner, she’s 80,” says Hedden.
The company sews spa products such as heat wraps. Hedden and her mom reinvented themselves after Hedden’s interior decorating business in Cashiers wasn’t bringing in any new work during the 2008 recession.
Her mom had used the luxury fabrics left over after a decorating project to make heat wraps for herself and they had the idea to sell them on a mass scale. Hedden says they have about 200 accounts.
“That was the scary part after 2008. Is that there was no end in sight. I had about 30 jobs going and all of the sudden I didn’t have any work,” says Hedden. “So that was the scary part, that you have to totally reinvent. This time we aren’t having to reinvent - we are just having to pivot.”
The company is pivoting to essential work. They are working with Carolina Textiles to sew face masks as Personal Protective Equipment. Hedden hopes to get started sewing again next week.
Despite the fact the federal government has run out of funding for some of its small business stimulus programs, Raker remains optimistic that more PPP funds are on the way.
“I think that (PPP) has shown that its needed tool. Its an important tool and through working with banks and partner lenders like Mountain Bizworks the federal government has been able to reach a lot of small businesses quickly,” says Raker.
Mountain Bizworks say it received over 500 applications asking for a total of $23 million - so the need for funding in Western North Carolina remains. Small businesses can also check out local programs for loans like One Buncombe and the Haywood Recovery Fund.
Disclaimer: Blue Ridge Event Staffing is a business sponsor of Blue Ridge Public Radio.
