Neal celebrates Paycheck Protection Program in Holyoke

May 6, 2020 | Chris Maza
Chrism@thereminder.com

Congressman Richard Neal and Oreste Varela of the SBA’s Massachusetts District Office discuss the Paycheck Protection Program in front of Nick’s Nest in Holyoke.
Reminder Publishing photo by Chris Maza

HOLYOKE – Standing in front of Nick’s Nest, a nearly century-old Holyoke institution on Northampton Street, Congressman Richard Neal spoke about the importance of small businesses impacted by COVID-19 and the needed support of the U.S. Small Business Association’s Paycheck Protection Program (PPP).

Through the program, small businesses can apply for a loan that is completely forgivable provided companies keep all employees on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. With $660 billion in funding authorized through “thoughtful, considered legislation,” the SBA has processed nearly 2 million loans, according to Neal.

“Keeping people working was the idea right along – making sure there would be an infusion of salaries,” Neal said.

Oreste Varela of the SBA’s Massachusetts District Office said the first round of PPP loans resulted in $10 million distributed to 47,000 small businesses statewide before the funding ran out. With the second round of loans opening up on April 27, he said nationwide, $90 billion had been applied to 960,000 loans as of April 30.

“We’re working hard with our lenders and with small businesses. I’m taking calls all day, every day helping businesses through these tough times,” he said. “We’re boots on the ground, helping businesses, trying to keep them alive and trying to keep people employed.”

The program had its detractors during and after the process of issuing first round of loans due to perceived difficulties for certain business owners, specifically minorities. Neal said he pointed out those concerns and they were addressed.

“In this last round, $60 billion was set aside for women, minorities, veterans and the agricultural sector,” he said.

Nick’s Nest co-owner Jennifer Chateauneuf told Reminder Publishing said she was grateful to receive the loan this time after the business was unable to capitalize on the first wave. Throughout the pandemic, she and her husband Kevin never closed the business they have owned for 15 years, though restrictions have halved their normal business.

“It is going to help us with payroll so we’re able to keep our doors open and, most importantly, keep our staff employed so they don’t have to join the unemployment line,” she said. “Right now we have 10 [employees] but once the soft serve opens, we’ll be able to bring back all of the seasonal girls, at which point we’re usually up to 17 or 18.”

Chateauneuf said the application process itself was not difficult, but there was frustration and disappointment when funding ran out for the first round of loans.

“We had everything in and we thought we were all set but then we got put in the queue and the funds ran out. The second time around, it opened up on Monday and we found out on Tuesday we had gotten the loan,” she said.

“It’s crucial. It’s critical. It’s absolutely a must,” said Peter Rosskothen, owner of the Delaney House and the Log Cabin, said of the PPP. “I’m lucky that I had some reserves, so I’m not closed, but this future is extremely unpredictable and this adds a lifeline that is phenomenal.”

Rosskothen explained the D Hotel, Log Cabin and Delaney House are currently closed and the effects have been “devastating.”

“The recovery is going to take some time too. I don’t feel like this is turning a switch on on May 18,” he said, referring to the date to which Gov. Charlie Baker extended non-essential business restrictions. “I think in the hospitality industry it will take time, six months to a year, until we start seeing normal business again.”

Stephen R. Williams of Amazon Delivery Service in Holyoke, a locally-owned franchise, said his business has expanded since its October 2019 opening from 20 employees to 125 and the PPP was “a Godsend.” Williams’ operation was among those awarded a loan in the first round.

“We’re one of the minorities that was able to get that PPP early, so I’m humbled and grateful for that. It’s helped us because we already pulled our first payroll this week, so that really helped us,” he said. “I’m proud of the fact we’ve been able to keep people working. Ninety to 95 percent of our workforce is Latino or African American and a lot of them have been struggling and a lot of them didn’t have employment before they came to Amazon, so I’m just grateful to keep people working at this time.”

Questions about the program remain, however. The stipulation in the loan requirements regarding staffing levels is a concern for industries that are currently unable to do business, Rosskothen pointed out.

“This money is forgiven if you spend it in a specific formula,” he said. “I’m worried about the formula, to be honest with you, because in the hospitality industry, I don’t see how I can spend this money in eight weeks the way it is intendent to get it forgiven. I am very worried that businesses like mine are going to end up owing some of this money when we come out of this. I’m asking Congress, I’m asking the SBA, I’m asking anybody who is willing to listen that I think in hospitality, for hotels and restaurants, the formula should be applied differently.”

Michael Zasky, owner of Chicopee-based Zasco Productions, had similar concerns for the entertainment industry his business supports.

“Our challenge right now is what do I really do with this money? It’s going to be very helpful obviously because we have no work coming in right now, but for the long-term, I don’t want to hire employees back only to have to lay them off again. In the live event business, it’s not the same as a restaurant where if you open up your doors, you’re going to have some revenue flowing. In our business, with live events, people plan those once a year, so things that are canceled now can’t suddenly come back; they’re not coming back until next year.”

He continued, “Right now I’m trying to work the numbers to figure out the most effective use. I feel like if I bring back employees now and then have to lay them off again, it’s going to be a morale breaker. I’m trying to figure out if I can bring some people in part-time to get some shop projects done to prepare for our future busy season or defer it a little bit and take it as a loan.”

Neal also noted more stabilization and relief funds from the federal government would become available “in the next eight to 10 weeks.” Addressing the fact that many employees remain unemployed and 30 million people nationwide had applied for unemployment assistance, he said that the next round of funding would go toward ensuring those claims would be processed.

“These are terrible stories, but it is a reminder of the nature of the challenge that is in front of us,” he said.

He added it was “likely” a second round of stimulus payments would be forthcoming. Those payments would be similar to the first group of payments, but he said there was a hope that lawmakers would “ramp up” the $500 per child credit to a higher amount.

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