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Covid-relief loans pumped $3.2B into Montana small businesses

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Posted at 6:30 PM, Jun 03, 2021
and last updated 2021-06-03 21:15:22-04

Editor’s note: This is the second of a three-part series on federal Covid-relief funds in Montana – which will top $7 billion.

For Helena restaurant and inn co-owner Paul Mabie, federal Covid-relief loans probably saved his businesses, which launched just months before the pandemic began in early 2020.

“We put everything on the line to open up this project in July 2019 and when Covid hit, we thought we were going to lose everything,” he said this week. “And we are here today, thriving, vaccinated and ready to open our busines to receive the roar of hospitality that Montana is experiencing due to the funding that came down through these programs.”

Mabie’s Oddfellow Inn & Farm and two other restaurants at the Helena airport received funding through the Paycheck Protection Program (PPP) and emergency disaster loans – and they certainly weren’t the only Montana businesses benefitting from the help.

Paul Mabie, co-owner of Oddfellow Inn & Farm in Helena.

In Montana, PPP – which was closed to applications just this week -- has awarded 47,000 loans totaling more than $2.6 billion, since April 2020.

And the disaster loans, expanded by Congress during the pandemic, have provided another $630 million for small Montana businesses since last year. Businesses hit by the pandemic still have until the end of this year to apply for these low-interest loans, which are repaid over 30 years.

Brent Donnelly, Montana district director for the U.S. Small Business Administration, says the two programs have been well-received among businesses – and, he thinks, a success.

“A lot of the businesses I talked to told us, hey, the PPP was something that allowed us to take a little bit of breath and go, `OK, how are we going to deal with the pandemic?’” he told MTN News. “They sought out new customers, they sought out new markets, they modified their business locations.”

PPP was targeted at businesses with 500 employees or less, to help them retain employees, pay rent and cover other costs to help them weather the pandemic.

It began as part of the first massive federal Covid-19 aid package approved in March 2020, at $350 billion nationwide. It has now reached $800 billion, as Congress extended the program while the pandemic lasted much longer than expected.

Part or all of the loans will be forgiven if businesses meet certain requirements, such as retaining at least 60 percent of their employees.

As of this week, about 63 percent of the 24,000 Montana PPP loans approved in 2020 have gone through the forgiveness process, Donnelly said, and nearly all have been approved.

Brent Donnelly, Montana district director for U.S. Small Business Administration.

The SBA maintains a public database listing every approved PPP loan and the recipients. The database for Montana reveals awards given to businesses in almost every community in the state, big and small, and to multimillion-dollar firms as well as single proprietorships.

Highlights include:

· The largest award was $10 million, to home-health care firm Consumer Direct Care Network of Missoula. Eleven firms had loans of $5 million or more, and 281 loans totaled at least $1 million.

· Almost 21,000 of the loans went to businesses with just one employee, averaging $11,200 per loan.

· Nearly 39,000 of the loans – 85 percent – went to businesses with 10 employees or less.

· Almost $1.6 billion of the loans went to businesses in the state’s seven largest cities – although small towns often had plenty of recipients as well. For example, in tiny Alzada in the southeast corner of the state, 46 businesses had loans totaling $832,000.

But, in the other extreme corner of the state – Yaak, in northwest Montana – no one had a loan.

The largest loans went to construction and engineering firms, a mental-health center in Missoula, manufacturers, hospitality companies and mid-sized hospitals.

Rich Rasmussen, president of the Montana Hospital Association, told MTN that smaller hospitals were losing revenue at the start of the pandemic, as elective surgeries were canceled, but were expected to retain staff and even ramp up to respond to emergency patients.

Rich Rasmussen, president of Montana Hospital Association.

The PPP program was their only source of aid early in the pandemic, he said.

“Smaller hospitals don’t have the same level of reserves that larger hospitals have,” Rasmussen said. “So the PPP loans allowed them to keep all of their staff through the duration of the pandemic. …

“It really was a bridge to get us to the place where we could bring back elective procedures, so that we could continue to remain financially viable into the summer and fall, when we saw our biggest crush of patients.”

The hospital in Sidney had the biggest PPP loan of any hospital, at $5.8 million, while hospitals in Anaconda, Livingston, Glendive, Glasgow, Lewistown and Dillon all had loans of at least $2.8 million.

Architecture and engineering firm Cushing-Terrell of Billings had the second-largest loan at $7.2 million, while Dick Anderson Construction of Helena had the third-highest at $6.8 million.

Corey McGreevey, CEO for Dick Anderson Construction, said it was able to maintain most of its 350-plus workforce, even though it had “significant projects” canceled, postponed or delayed by the pandemic.

“We feel a strong responsibility to our employees and the communities we serve,” he said. “A significant portion of the loan proceeds injected money back into our local communities via our employees, that we were able to retain.”

Cushing-Terrell declined to comment on its loan.

Ben Bledsoe, CEO for Consumer Direct Care Network, said it was able to qualify under “alternative sizing guidelines,” even though it has more than 500 employees, and get the maximum $10 million loan.

The Missoula-based firm has several thousand workers in 15 states, offering home health-care and assistance to the elderly and the disabled.

The company saw a big drop in revenue and demand for its services, because many people didn’t want others coming into their home during the pandemic, Bledsoe said.

“(The loan) was very helpful; we’re thankful for the support,” he told MTN News. “I think everyone we provide services for in all of these communities will be thankful as well.”

He said the company is working through the approval process to see how much of the loan might be forgiven.

Much of that process is being handled by the private lenders who approved the loans, Donnelly said.

“If there was a hero in this whole process, I think it’s our lenders and our bankers in Montana,” he said. “We’re a very rural state. … Our banks know our borrowers and vice-versa.”

However, Donnelly said some “bad actors” certainly exist, trying to get loans for which they’re not eligible, and that the SBA’s Office of the Inspector General has been investigating possible fraud. Data on the investigations aren’t yet available, he said.

But Donnelly said he’s confident the vast majority of the loans went to businesses who dearly needed, and appreciated, the money.

Mabie, the Helena restaurant and inn owner, said without the loans, the company would have had to lay off 22 people. Instead, many of those workers stayed on – and now have health coverage, he said.

Also, the company hired more people and invested in some additional projects, which appear to be paying off as the tourism economy rebounds, he said.

“It was a little bit of a gamble and a doubling-down, but we’re glad we did it now, because we have a fully trained staff and we’re continuing to hire, all thanks to the PPP money,” Mabie said.

Mabie’s business also got an emergency disaster loan, which have gone out to more than 10,000 Montana firms.

Next week: The plans for beefing up Montana’s access to high-speed Internet service.