Before the federal government opened up $349 billion in funding for small businesses on Friday, the city of Hermiston, Hermiston Chamber of Commerce and Hermiston Downtown District were encouraging business owners to talk to their banks about it.
Businesses that have a utility account with the city or are members of the chamber or downtown district received calls Thursday and Friday to discuss how they can access the Paycheck Protection Program included in the recent $2 trillion stimulus package known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
The Paycheck Protection Program allows small businesses and nonprofits — those with fewer than 500 employees — to borrow up to 2.5 times their monthly payroll in order to pay employees, rent and other fixed operational costs through June 30.
Businesses in the hospitality industry, including restaurant chains, can consider each separate location its own “business.”
According to the Small Business Administration, “The loan will be fully forgiven if the funds are used for payroll costs, interest on mortgages, rent, and utilities” if at least 75% of the forgiven was used on payroll.
The amount of the loan that is forgiven will be reduced if, during the two-month period of the loan, full-time employee headcounts decline or wages decrease.
The loan has a maturity of two years and an interest rate of 0.5% with payments deferred for the first six months.
The SBA is waiving its normal requirements for collateral and will not charge any fees.
“This is a huge Federal spending bill which sounds too good to be true, and is therefore sure to generate a large degree of disbelief from businesses, and unfortunately give rise to a large sub-industry of scammers,” Mark Morgan, assistant city manager, said in a statement.
“That’s why we want to directly contact all of our local businesses and encourage them to talk to their banking partners.”
According to a news release, city staff whose normal job duties have been affected by COVID-19 closures, such as parks and recreation staff and librarians, helped the chamber make the calls.
They encouraged business owners to contact their bank immediately to discuss applying for the program, which began taking applications on Friday. The release states that while many financial institutions are working to become eligible to assist in the PPP, as of last week the only certified banks with physical branches located in Hermiston are Banner Bank, Columbia State Bank, Umpqua Bank and U.S. Bank. Businesses that bank with other institutions should check with them on their eligibility.
They will not ask businesses for bank account numbers or other sensitive information, and business owners should be aware of scammers posing as the Small Business Administration who may ask for such information over the phone. Instead, businesses should deal directly with their lender in applying for the loan.
Morgan said a “huge thanks” is owed to the offices of Senators Ron Wyden and Jeff Merkley, as well as Representative Greg Walden for helping local businesses have access to the opportunity.
On a statewide level, businesses are encouraged to visit oregon4biz.gov to see what aid may be available to help with COVID-19 impacts.