Local Companies Were Granted $250M in Paycheck Protection Funds
Businesses in Tuscaloosa County were granted more than $250 million in federal Paycheck Protection Program funds this year, according to data made public last week.
The PPP, a $659 billion relief package launched by the $2.2 trillion CARES Act that was adopted in late March, gave American companies up to $10 million each to counteract losses caused by the COVID-19 pandemic and keep their employees working.
The federal Small Business Administration, which oversaw the distribution of the funds, refused for most of the year to release detailed information about the loans. In May, publishers including the Washington Post, the New York Times, the Wall Street Journal and the American Business Journal sued the SBA for more information on the program.
A federal judge hearing the suit ordered the SBA last week to release the names, addresses and precise loan amounts of all individuals and entities who were given loans through the PPP, and that incredible amount of data was made public last Tuesday.
A review of the numbers show that in Tuscaloosa County alone, 2,957 local businesses were granted $267,209,832 in forgivable federal loans.
As could be expected, the lion's share of the loans were granted to businesses in the city of Tuscaloosa, where 1,869 applicants were granted a total of $173,271,508. Across the river in Northport, 626 companies were approved to receive $53,679,608.
38 Tuscaloosa County companies were granted $1 million or more, and the average loan approved was just over $90,000.
Jim Page, the president and CEO of the Chamber of Commerce of West Alabama, said the quarter-billion-dollar injection of cash directly into local businesses may be the largest the Tuscaloosa area has ever seen.
"There have been economic stimulus measures taken before, but I don’t think there’s been anything of this magnitude in our country before but certainly speaking just to our local area," Page said Tuesday. "You can’t overstate the importance of what that PPP money did, especially for businesses that were forced to close for a period of time, this was the difference-maker in them surviving to see the other side of it."
Tuscaloosa Mayor Walt Maddox said Monday that around 20 percent of the city's population has applied for unemployment benefits at some point this year, and Page said the problem would have been incalculably worse without PPP funds.
"This program has kept so many people employed – our unemployment claims have seen record-highs during all of this but just imagine how many more would have applied for unemployment had the PPP not kept those people working," Page said. "It was a drastic measure taken by the federal government but it was absolutely a primary difference-maker in keeping our local, state and national economy afloat, especially during that really rough period at the beginning of the pandemic."
The unique draw of the PPP loans, Page said, is that they are forgivable. Businesses that used the funds appropriately and kept their employees working through the worst of the pandemic will not have to pay those loans back.
"The beauty of these loans being forgivable is that it adds accountability," Page said. "Businesses couldn’t just take this money and go buy a bunch of new equipment or put it in the bank and sit on it while they were laying employees off. There really were strings attached to it and the requirement to keep people on the payroll was the teeth that made this work. It really did exactly what it was supposed to do."
Anyone who received that money needs to be working diligently to make sure the loan is forgiven, Page said.
"Companies locally that applied for and received PPP funding, no matter how much it was, I strongly encourage them to make sure they’re communicating with their accountants, financial advisers or financial institutions just to make sure that they are crossing all the t’s and dotting all the i’s during the forgiveness process so that they don’t have to pay any of that money back," Page said. "That would be a real whammy for some people going into 2021."
Page also said he is "cautiously optimistic" that additional COVID-19 relief may be coming from the federal government, perhaps as soon as later this month.
"There’s still relief that's needed and I think that’s going to be the case until the vaccine is widely available and only then can we start to get back to 'normal.'" Page said. "I’m cautiously optimistic that Congress is going to act now that the dust is settling on the presidential election and I think there’s broad bipartisan outcry that additional relief is needed. I hope our members of Congress and the Senate can put politics aside and do what’s right for the American people and American businesses."
The Chamber will host a webinar next week to give more information to West Alabama businesses that received PPP funds about how to see those loans forgiven. Stay connected to the Tuscaloosa Thread for more details on that event when they are available.
Editor's notes: This is the first of a short series from the Tuscaloosa Thread on the Payroll Protection Program and its impact in the area. The numbers shared above are not absolute -- some companies the SBA approved for PPP loans may have ultimately chosen to decline those funds or may have returned them.
Top Stories From The Tuscaloosa Thread (11/30-12/04)