PPP loan injected $1.3 billion into South Shore companies4 min read
- 4 percent of companies received 53 percent of the money distributed on the South Shore
- 10,974 companies on the South Shore received Paycheck Protection Program loans
- 64 percent of the loans were for $50,000 or less
When governors started issuing stay-at-home orders in March, the Milton-based restaurant chain Not Your Average Joe’s furloughed more than 1,700 employees, leaving just one person on staff to handle the payroll and unemployment claims.
The company tried to get a forgivable loan under the Paycheck Protection Program run by the federal Small Business Administration, but the funding ran out. It got in under the second round of funding and used the $5.9 million exclusively on payroll to slowly reopen its 20 restaurants across six states, Chief Financial Officer Joe McGuire said.
Not Your Average Joe’s was one of the top loan recipients on the South Shore under the plan. On the South Shore, 10,974 businesses received $1.32 billion in forgivable federal loans under the Paycheck Protection Program – also called PPP loans – according to newly released data from the Small Business Administration.
In July, the Small Business Administration released the names of companies that received between $150,000 and $10 million from the program. The list did not give exact numbers, but gave a rough estimate of much much each company received. The first round of data listed 1,558 companies on the South Shore, just 14 percent of the total number that received loans. News organizations then sued to get the full data set.
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The average loan amount for the entire program was $107,000, according to the Treasury Department. The government has facilitated handing out $521 billion to millions of companies, a crucial piece of its $2 trillion coronavirus rescue package.
The loans of up to $10 million charge 1 percent interest and can be forgiven if the businesses uses at least 75 percent to continue paying their workers. The other 25 percent could be used to cover things like rent or utilities. Businesses were eligible for loans equaling 2½ times their average monthly payroll, up to the $10 million maximum.
Three businesses on the South Shore received the maximum: McDonald Electrical Corp. in Hingham, Brewster Ambulance Service in Weymouth and Labornow Inc. in Braintree. Bay State Milling Co. received $9.65 million, and Edward G. Sawyer Co. received $8.5 million. McDonald Electrical Corporation and Edward G. Sawyer Co. are both electrical contracting companies, and Labornow is a temporary employment agency.
Of the 15 companies that received the most on the South Shore, only Brewster Ambulance Service, Not Your Average Joe’s and Bay State Milling Co. responded to requests for comment.
Brewster Ambulance President Mark Brewster said the loan program helped get the company through a rough patch. At the beginning of the pandemic in March, ambulance calls were down 40 percent.
“It was great for us because we didn’t have to lay off anyone,” he said. “One hundred percent of it went to payroll.”
The company employs over 2,000 emergency medical technicians and paramedics and the loan meant eight weeks of payroll was covered, he said.
“Without it, we would have had substantial layoffs,” he said.
With the current demand for healt hcare workers, it would have been difficult to get those employees back once business increased, Brewster added.
McGuire said his company, Not Your Average Joe’s, used the money exclusively on payroll. They’ve brought back about half their workforce, 840 people, and are making about half the revenue they were before the pandemic.
The loan money allowed the company to test the waters at its Watertown, Connecticut, restaurant, and develop safety protocols. Since the chain does not use premade or frozen ingredients, that meant reducing the menu from 58 items to 20.
Most of the restaurants have patios, which allowed for better business, about half of what it was pre-pandemic, but the rising number of coronavirus cases across the country means the future is murky.
“I’m not sure what’s going to happen as we get into the depths of winter,” McGuire said.
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After spending all the loan program money, the company is living on its revenue alone.
“Hopefully, we’ll live until we get the patios back,” McGuire said.
In a statement, Bay State Milling Co.’s chief financial officer, Peter Banat, said they were able to avoid layoffs using their $9.6 million loan.
Just 476 companies, 4 percent of the total nationwide, received loans of $500,000 to $10 million, but the value of those loans was $695 million, 53 percent of the total $1.3 billion distributed.
The majority of the loans on the South Shore, 7,041, or 64 percent, were for $50,000 or less, totaling $136 million. That’s just 10 percent of the total $1.3 billion distributed on the South Shore.
Fourteen South Shore companies received loans of more than $5 million: McDonald Electrical, Brewster, Labornow, Bay State Milling, Edward Sawyer Co., The Vertex Companies, Peabody properties, Cox Engineering Co., Not Your Average Joe’s, Daniel Quirk, Corcoran Management Co., The Computer Merchant, Lee Kennedy Co. and DotCom Team LLC.
Other recipients included South Shore Mental Health Center, $4.9 million; Granite City Electrician Supply, $4.8 million; Fallon Ambulance, $4.8 million; South Shore YMCA, $4 million; Norwell VNA, $3.8 million; Cashman Dredging, $3 million; Herb Chambers, $2.5 million; MaryLou’s, $2.4 million.