Some small businesses reluctant to PPP loans: “Nothing is free”
ROCHESTER, NY (WROC) — Congress has passed a $900 billion pandemic relief package late Monday that would provide long-sought liquidity to businesses and individuals and resources to vaccinate the nation.
New York Senator Chuck Schumer said that while this bill is a start, it’s not the end of the story. He said he would continue to fight for more money, especially for state and local governments. He said Kentucky Sen. Mitch McConnell blocked the money this time around, but said he hoped to entice more Republicans with the extra help once President-elect Joe Biden takes office.
The Highland Park Diner is one of many struggling restaurants that will likely receive stimulus money. Van Zissis owns the restaurant, which has been in the orange zone for weeks. He said the stimulus money will help, but it’s not a permanent fix.
“We’re going to pay that money back one way or another, there’s nothing free,” Zissis said. “The cost of business will increase, insurance will increase.”
$54 billion will go to individuals and small businesses in New York State. The national package includes $300 per week for the unemployed for 11 weeks, $600 for each person earning less than $75,000 per year and $15 billion dedicated to performance halls. Senator Schumer said $20 billion of New York’s money is being allocated to Paycheck Protection Program loans for small businesses.
“The loans in the PPP, as long as you don’t lay off all your employees, become a subsidy. In almost all cases the loans will be forgiven,” Schumer said.
But Carosa-Stanton Asset Management president Christopher Carosa said many small business owners he spoke to said they wouldn’t touch PPP loans after problems they had with loans in the spring. .
“If you’re a small business, you’ll want to be on the safe side,” Carosa said. “Talk to knowledgeable experts; your accountant, people you’ve talked to before who are a little more familiar with this. You don’t want to get caught thinking you’re getting free money and then suddenly find out it’s not free and you don’t have the cash to pay that money.
Zissis said he was worried about taking the money and having to pay it back.
“It could be the same as the first round of PPP, to get people back to work and help with payroll, but we have a lot more expenses in the restaurant business, or in any business, other than payroll” , did he declare. “If there’s a clause where it doesn’t sound good or doesn’t seem doable, I won’t take it because we’ll be on the hook and we can’t afford to take on any more debt.”
Schemer said individual $600 checks would be released soon, but said he didn’t have a specific timeline. He said it is almost certain the bill will pass Monday night.
There is also money set aside for government institutions, including $5 billion for education, $1.6 billion for vaccinations, $1.3 billion for rental assistance, and $5 billion. billions of dollars for transportation.