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Business

Bozeman Small Business Owners Share Thoughts On Economic Aid

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Rachel Cramer
Kyle Berringer, owner of the Upper Cut Barber Shop in Bozeman, speaks with representatives from the Small Business Administration and Montana Senator Steve Daines's Office in Bozeman July, 28, 2020

A barber, a restaurant owner and a hot tub store president: Those were among the small business owners in Bozeman who shared stories with state and federal officials this week as Congress debates the next round of economic aid during the pandemic.

The U.S. Small Business Administration (SBA) met with nearly a dozen business owners across the state to get feedback on how past relief packages worked out.

In downtown Bozeman, masked servers take orders at Backcountry Burger Bar for carrot quinoa salads and burgers with sriracha aioli.

Albert McDonald co owns this place along with a pizza spot and a cafe in the Gallatin Valley. He and his partners applied for a Paycheck Protection Program (PPP) loan during the first round of federal funding. The PPP funnels money to businesses to keep staff employed and help with other expenses like rent and utilities during the pandemic.

“As soon as we got it, it changed everything because then I knew I could bring everybody back with confidence, and I had to compete with unemployment,” McDonald said.

The CARES Act in March increased unemployment benefits by $600 a week. It’s set to expire at the end of this month.

McDonald says they used the PPP money to give staff $250 if they completed a COVID-19 safety training and an extra dollar per hour during their shifts. But the money ran out after two and a half months, and wages went back to normal.

McDonald says staffing his restaurants is still the biggest challenge, made more difficult by the recent rise in COVID-19 cases in Montana.

“I got two texts while we were sitting here. I’m sweating because I’m wondering that’s it’s another kid telling me they were exposed,” McDonald said.

A few blocks away, Kyle Berringer, owner of the Upper Cut Barber Shop, says the PPP loan program got him through the stay at home order and gradual reopening of the economy.

“I was just worried about paying my lease here, I mean that was the biggest thing, and then some lost wages, and also at that point, I didn’t know how long I was going to be closed,” Berringer said.

The SBA says more than 23,000 PPP loans and over 8,000 Economic Injury Disaster Loans have been distributed to Montana’s small businesses in recent months, funneling over $2.2 billion into the state’s local economies.

Both programs are administered by the SBA and have received funding through federal coronavirus relief packages.

SBA’s Director of Rural Affairs Dan Nordberg says Congress is discussing what funding, eligibility and loan forgiveness could look like for the two programs moving forward as lawmakers negotiate the fifth federal coronavirus relief package.

“We’ll see what Congress does over the next two weeks, but I think there’s going to be, yes, some new conversation on Paycheck Protection Program as well as Economic Injury Disaster Loan,” Nordberg said.

Nordberg says he’s not sure how the cards will fall but that it’s likely Congress will require businesses applying for PPP loans in the future to prove a certain amount of revenue loss due to COVID-19.

U.S. Senator Steve Daines has joined other Republicans and Democrats in calling for all PPP loans under $150,000 to be automatically forgiven. In Montana, around 90 percent of the PPP loans are under this threshold. Democratic U.S. Senator Jon Tester has said he supports an option that could provide longer term loans for some businesses.

As Congress debates what the next round of federal aid looks like, the future of the state and federal economies remains murky. The wave of impacts to local businesses will stretch into next year.

On the outskirts of Bozeman at Mountain Hot Tub, President Kelly King says he expects a 25 percent drop in revenue this year even though demand for hot tubs has never been higher.

“To keep up right now, we would have to have two semi trucks a week come in between now until the end of the year just to keep up with demand, and the factory just can’t, can’t do that for me,” King said.

King says hot tub manufacturers stopped production when the pandemic first hit because demand was down or because they couldn’t get parts from other companies. King says it created a backlog for the whole industry. He doesn’t expect an order now to show up until early next year.

“I, you know, make a lot of decisions based on what I think we’re capable of doing six months down the road and always trying to stay two steps ahead of things,” King said.

King says he’s still holding on to an Economic Injury Disaster Loan he received earlier this year. It’s a safety net, he says, in case supply chains come to a stand still once again.