As the coronavirus strangles the cash flow of area businesses, families living paycheck to paycheck are the first to suffer.
For one local business, ARF Venture Corporation run by Adam Fitch of Marysville, that is what happened for his nine employees.
Fitch runs a facilities management company that provides cleaning services to Union and western Franklin counties.
“At first we were good,” Fitch said. “Then when businesses started to close, we had to start making cutbacks.”
According to Fitch, in April his business dropped 62% from 2019.
To combat the financial loss, Fitch looked into the Small Business Administration’s Paycheck Protection Program (PPP) to help keep paying his employees.
The program is designed to provide loans for small businesses to help them keep employees.
This federally sponsored program started April 3 and has provided loans for nearly 1.7 million businesses across the country, according to the SBA website.
“I started reading the stimulus package to educate myself to see what the government was going to stand behind,” the business owner said.
Fitch was able to get his loan approved during the first installment of $349 billon prior to it running out of money Friday. Congress and the Trump administration immediately started talks to add more money to the loan program.
Tuesday, the Senate came to a $500 billion agreement with $331 billion earmarked for the PPP. The House of Representatives is expected to vote on the additional funding Thursday.
The loans are being provided through financial institutions around the country as a way to provide small businesses with enough money to pay employees.
Several local banks are participating in the program to help businesses of Union County.
Tom Parker, a commercial lender with Liberty National Bank, said that nine local businesses have been given a total of $1.6 million.
“For a community bank it is front and center for us to serve people that we see everyday,” Parker said.
Richwood Bank is also involved with the program and has received more than 600 applications and has funded more than 100 loans since the start of the program, according to President and CEO Chad Hoffman.
“The government is trying to help people impacted by this,” Hoffman said. “They are trying to provide paychecks to keep people off of unemployment.”
In order for small businesses to be considered for the program, they must provide two and half months of payroll information to a financial institution. Once the loan has been funded, 75% of the loan must go toward payroll. The remaining 25% can be used for mortgage, rent or utility payments, according to Hoffman.
“The government is trying to be reasonable,” he said, noting that the government is encouraging businesses to keep and pay employees, even if they are staying home.
If the businesses use the loan for payroll, the loan will be forgiven and paid for by the SBA, according to their website.
For Fitch and his employees, “it takes the weight off knowing you are providing for your associates.”
“The (Paycheck Protection Program) is a great way of knowing we could continue paying our employees for eight weeks,” he added.
Fitch said with payroll taken care of he can focus on other aspects of the business.
“We are able to do more training and continue working so we will be ready when things come back on line,” he said.
Even though the SBA was not accepting any loan applications, Parker said his bank is still accepting applications in anticipation of the program getting refunded.
“We created a waiting list so the minute that the program was refunded we could immediately start filling application to the SBA,” Parker said.
With more funds expected, banks are looking to get their loans granted before the money runs out again.