For one Berkshire agency, federal loan a mirage — here, then gone
For others in region, Paycheck Protection Program helps to underwrite 14,000 jobs
PITTSFIELD — Not so "easy come" — or easy go, either.
The head of Berkshire County Arc fought to gain access to a federal Paycheck Protection Program loan this spring, even asking his member of Congress for help.
Kenneth Singer managed to get a loan worth $5.4 million for his 800-employee human services business — but now he's giving it back, after questions arose about whether his agency qualified as a nonprofit.
"The PPP money would have been great, but we weren't eligible," he said.
Along with the loan goes Singer's plan to give hazard pay to employees, who stood on the front lines and helped prevent the agency's worst fear from materializing — an outbreak of the virus in one of BCArc's 43 residential homes. The agency serves people with developmental disabilities, brain injuries and autism.
BCArc's loan, set to be returned, was the largest extended in Berkshire County through June 30, according to data released by the U.S. Department of the Treasury.
At least 303 other Berkshire nonprofits and businesses were approved for PPP loans over $150,000 to temporarily protect 14,147 jobs, according to the federal data. The loans were attractive because they do not have to be repaid — if borrowers meet guidelines on use of most of the money to preserve jobs.
The data does not name the firms approved for loans of less than $150,000. And it lists loan sizes as ranges, rather than in exact figures.
For BCArc, the prospect of restarting day programs is on the horizon, which would require investing in a new haul of personal protective equipment and having adequate staff to run them. Singer, the agency's president and chief executive, is left hoping to find enough money to get it all done.
Adding to injury, smaller chapters in the state have been deemed eligible for a potentially forgivable loan — like those in Fitchburg and Attleboro, which were approved to borrow up to $2 million each. If anything, Singer wonders, doesn't BCArc's size make the need for relief all the more pressing?
"We have the same needs, the same problems and even more so than some other smaller agencies," he said. "But, we're not able to use the Paycheck Protection Program."
Loans in the Berkshires
The $660 billion loan program was established by the Coronavirus Aid, Relief and Economic Security Act with the goal of helping small businesses stay afloat and to keep people working.
Nonprofits were added later.
Lenders working with the Small Business Administration processed eight loans to Berkshire companies of $2 million to $5 million.
They are construction company J.H. Maxymillian Inc.; concrete manufacturer Petricca Industries Inc./Unistress Corp.; Stockbridge psychiatric facility Austen Riggs Center; the Brien Center for Mental Health and Substance Abuse Services; the Kripalu Center For Yoga & Health; Community Health Programs in Great Barrington; glass manufacturer Advanced Impact Technologies; and GEMI Management Co., a management company owned by George Haddad of Haddad Auto Group.
Twenty-three others were granted loans of $1 million to $2 million, including New England Newspapers, owner of The Berkshire Eagle; Guido's Fresh Marketplace; the operator of the Pittsfield Municipal Airport, Lyon Aviation; and Miss Hall's School, the private, all-girls boarding school in Pittsfield.
The Brien Center retained all 475 of its employees as an "immediate result" of its PPP loan. In a statement, Executive Director Christine Macbeth said the loan "provided us with the security to keep such dedicated and essential workers and spared them and the community from the financial havoc of up to 475 people suddenly unemployed."
After a wave of layoffs and furloughs began rippling through Berkshire arts and cultural institutions in March, at least 11 institutions received a reprieve the next month, when Jacob's Pillow, the Norman Rockwell Museum, the Trustees of the Berkshire Museum and Hancock Shaker Village were approved for loans of $150,000 to $350,000. The Massachusetts Museum of Contemporary Art in North Adams received a loan of $350,000 to $1 million, according to the SBA data.
Barrington Stage Company used its loan to retain 23 employees for eight weeks in the spring, said Artistic Director Julianne Boyd. A round of furloughs began after the money ran out, and Boyd said there could be another round after the theater's limited summer season ends.
"It was a great Band-Aid, it cheered us on, it was a positive step, but not enough to keep our organization going," she said.
The loan program pumped $2.45 million to $5.75 million into the ailing hotel and lodging industry in the Berkshires, according to the federal data. Eight hospitality companies got loans that would, all told, keep 315 on the job, based on information the businesses reported on their loan applications.
Large franchised businesses received an exception to the program's 500-employee cap. That allowed individual franchises to obtain a PPP loan as long as no more than 500 employees worked at a set location. A similar waiver was extended to religious organizations, qualifying thousands of organizations affiliated with the Catholic Church for pandemic loans worth at least $1.4 billion combined, according to The Associated Press.
One of them was the local Catholic diocese, based in Springfield. A nonprofit identified by the SBA as the "Roman Catholic Bishop of Springfield A Sole Corporation for St. Agnes Parish" qualified for a potentially forgivable loan of $150,000 to $350,000 for 489 Main St. church in Dalton.
The program remains open to applicants. Small businesses have until Aug. 8 to seek a loan.
Though large organizations reaped benefits, the chief lending officer of Greylock Federal Credit Union said the loan program did what it set out to do: funneling working capital, and fast, to small businesses.
Jodi Rathbun-Briggs said the credit union issued 430 loans totaling more than $30 million dollars through June; two-thirds of her borrowers employed fewer than 10 people.
According to the Treasury's data, only 39 loans administered by the credit union topped $150,000.
Berkshire Bank was the top lender to Berkshire businesses of PPP loans worth over $150,000, administering 64 of them through the end of last month. Lee Bank issued 47 loans over that amount.
Under Treasury Department rules, banks can charge a 5 percent fee for PPP loans of less than $350,000. If Berkshire Bank levied that fee on all 35 loans approved of $150,000 to $350,000, it would have collected $262,500 to $612,500 on those transactions.
The loans can be forgiven if businesses spend at least 60 percent of it on payroll. If they aren't, borrowers must pay the loan with a 1 percent interest rate.
"At worst, it's a loan at an attractive interest rate," said Perri Petricca of Petricca Industries. The company received a loan of at least $2 million. He said he laid off about 75 percent of the workforce at the concrete manufacturing company when the pandemic put nonessential projects on hold, but he since has rehired all who wanted to come back.
His staff is back to pre-pandemic levels, and buoyed by pent-up demand, Petricca said he's looking to hire 20 more.
Help still needed
But, other small businesses will need a second guaranteed loan or capital after their PPP loan ends, said Rathbun-Briggs of Greylock Federal Credit Union.
Without a PPP loan, the not-for-profit Berkshire South Regional Community Center would have ceased operations, said Executive Director Jenise Lucey.
But, the loan proceeds are running out just as the center reopens under new sanitation and physical distancing regulations.
That brings new expenses, like $40,000 to rent space away from its 15 Crissey Road center that has enough room for a physically distanced summer camp. More harmful still would be not reopening at all. Lucey said the center has little cash on hand, and needs to generate revenue from programs and activities.
Gratitude about welcoming back the community is tempered by anxiety, as Lucey wonders how many people will want to return, and uncertainty about whether the virus again surges in the Berkshires.
"We're very grateful, but we're very nervous," she said.
Amanda Burke can be reached at firstname.lastname@example.org, on Twitter @amandaburkec and 413-496-6296.
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