Coronavirus In Minnesota: Chef Gavin Kaysen Says It's 'No-Brainer' For Small Businesses To Apply For PPP Loans
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MINNEAPOLIS (WCCO) -- Small businesses that are struggling to stay afloat during the pandemic are starting to get a lifeline from the federal government.
The Paycheck Protection Program promises $349 billion worth of low-interest loans that can be forgiven if the borrower follows certain criteria.
Some local businesses that applied and were approved are now putting that money to important use.
Gavin Kaysen, chef and owner of several Twin Cities restaurants -- including Spoon and Stable, Bellecour and Demi -- longs for the return of normalcy.
"I miss the noise. I miss serving people. I miss cooking for people," Kaysen said.
The hustle and bustle he enjoys has gone mostly quiet during the pandemic, outside of carry-out orders at a few of his establishments.
"At the end of the day, it keeps the lights on. It allows me to pay 30 employees," he said.
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But with limited cash flow from customers, the renowned chef has had to furlough 180 employees across his four businesses. Now, a federal loan is helping to pay all those salaries and more.
"Everybody's calling it a loan, but we should actually be calling it a grant, because it's supposed to be free," Kaysen said.
The Paycheck Protection Program gives small businesses a 1% interest loan up to $10 million and will be forgiven if the borrower doesn't lay off workers for an eight-week period. The money can be used for payroll, mortgage interest, rent and utilities.
Todd Lee, executive vice president for Bell Bank, said his company has processed 1,600 loan applications since the program went live on April 3.
"I've heard this program described a little bit as 'healthcare for the economy,'" Lee said.
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He said at least 90% of them have been approved, including Kaysen's loan.
"It's about 150 employees, would be my best guess, that got thrown into this in one way shape or form, many of them working 12 to 16 hours a day," Lee said.
Some banks were overwhelmed with the surge of applications. Two days after program went live, Wells Fargo announced it couldn't accept any more applicants after maxing out the $10 billion it was capable of lending.
"We, I think like most banks, have had to take our own customers first. We think that's the fair thing, the right thing to do," Lee said.
He said they've heard from a lot of non-customers who are struggling to get a bank to take their application.
"We tell everybody, 'You are on the list,' and we are hopeful we can get to everybody. But it's really hard to know without knowing the magnitude of our own customer demands and just how long the funds will last in the federal program," he said.
Kaysen applied for his loan on April 3 and got his money about a week later. He's grateful for his team of financial professionals, as well as Bell Bank, for allowing the process to move smoothly.
"What pains me is that I know it's not easy for everybody to do," Kaysen said.
While the loan might appear simple to navigate in order for it be forgiven, Kaysen said there are outside variables at play. One of them in the Stay at Home order which was recently extended to May 4 in Minnesota.
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"You have eight weeks to use this money before it becomes an unforgivable loan, and then you have until June 30 to bring back that entire work force that you applied for the loan with," he said. "If I say I have 100 employees at Spoon and Stable, I have to retain 100 employees as a head count by June 30. Now, if the 'Shelter in Place' is extended from May 4 until June 4, I've effectively lost weeks of this forgivable opportunity."
Despite those concerns, Kaysen is grateful to at least have secured the loan. The money means his employees now have health insurance coverage through June 1. Rent and utilities have been paid. Furloughed staff, some of whom Kaysen said make more money from unemployment, are getting paychecks.
"I think from a business decision, it's sort of a no-brainer to apply for it," he said.
When asked what people struggle with or forget when filling out a PPP application, Lee said business owners must be sure to initial all questions on the borrower application that require initials.
"If your business is under commonly ownership or management with any other businesses, in order to confirm your eligibility, the SBA will need the names of those other businesses and the number of employees at those other businesses," Lee said.
If you apply for a loan and don't get approved, Lee said it's presumably because you're not eligible for the PPP. If your bank is too inundated with other applications to process your application, Lee said to try another bank.
"However, typically your current bank will be the fastest pathway to getting a PPP loan approved and funded," he said.
