Paycheck Protection Program spent $320 million in Whatcom County. Here’s where it went
During the coronavirus-related shutdown of the local economy earlier this spring, Whatcom County businesses and non-profit agencies received more than $320 million in financial help from the federal government in an effort to prevent further economic damage.
Last week the federal government released financial information about the $660 billion Paycheck Protection Program, which offered loans used primarily to pay workers instead of laying them off during the early months of the pandemic restrictions.
The information released includes aggregate spending for loans less than $150,000. The report names the businesses that obtained loans in increments of more than $150,000, more than $350,00, more than $1 million, more than $2 million and $5 million to $10 million.
The report does not give exact amounts for the loans over $150,000. The Bellingham Herald added the lowest amount in the range to obtain the $320 million figure.
The 554 Whatcom businesses receiving loans more than $150,000 represent 3.5% of the state’s 15,849 larger loans.
The program’s focus is to provide a direct incentive for small businesses to keep workers on the payroll with loans that could be forgiven if certain employee retention criteria were met.
While there is some controversy debated in the national media about who benefited from the Paycheck Protection Program, the data shows it is clear Whatcom County businesses, particularly small companies, received strong support from the program.
Bellingham businesses received at least $202,850,000, according to the data, when the minimum amounts are totaled. Of that:
▪ One health care business received a loan in the $5 million-to-$10 million range that the government estimates saved or supported 488 jobs.
▪ Fourteen businesses, including key firms in the construction and maritime industries, received loans in the $2 million-to-$5 million range.
▪ Thirty businesses received loans in the $1 million-to-$2 million range.
▪ One hundred businesses received loans in the $350,000-to-$1 million range.
▪ Two hundred and seven businesses received loans in the $150,000-to-$350,000 range.
▪ And 2,097 businesses received loans in the $200-to-$149,992 range for a total of $73,759,549, supporting 7,157 jobs.
The data shows 2,447 Bellingham businesses participating in the program, a large portion of the city’s about 2,500 businesses with five or more employees, said Kevin Hoult, a certified business adviser at Western Washington University’s Small Business Development Center.
“We are continuing work with local businesses to increase participation even further, as there is over $130 billion remaining in the PPP loan fund and we want to bring even more of that money into our county,” Hoult said.
Ferndale businesses received the second-largest loan amount with at least $28,750,000, according to the data, when the minimum amounts are totaled. Of that:
▪ Five businesses, including key firms in the construction and manufacturing industries, received loans in the $2 million-to-$5 million range.
▪ Six businesses, including key firms in the manufacturing and service industries, received loans in the $1 million-to-$2 million range.
▪ Twenty-one businesses received loans in the $350,000-to-$1 million range.
▪ Thirty-six businesses received loans in the $150,000-to-$350,000 range.
▪ And 294 businesses received loans in the $200-to-$149,992 range for a total of $10,649,643.
In other Whatcom County communities:
▪ Lynden had 427 businesses receive loans under $150,000 for a total of $15,615,177 and 74 over that amount for a total of at least $28,000,000.
▪ Blaine had 200 businesses receive loans under $150,000 for a total of $6,306,286 and 23 over that amount for a total of at least $9,850,000.
▪ Everson had 134 businesses receive loans under $150,000 for a total of $492,921 and 19 over that amount for a total of at least $5,550,000.
▪ Sumas had 42 businesses receive loans under $150,000 for a total of $1,731,617 and eight over that amount for a total of at least $2,250,000.
▪ Deming had 37 businesses receive loans under $150,000 for a total of $1,372,313 and seven over that amount for a total of at least $3,100,000.
▪ Nooksack had 11 businesses receive loans under $150,000 for a total of $459,132 and two over that amount for a total of at least $300,000.
▪ Lummi Island had 18 businesses receive loans under $150,000 for a total of $308,371 and one business received a loan in the $350,000-to-$1 million range.
▪ Acme had seven businesses receive loans under $150,000 for a total of $219,525 and one business received a loan in the $150,000-to-$350,000 range.
The federal government estimates about 5,000 jobs were saved or supported by the Paycheck Protection Program in Whatcom County communities outside Bellingham.
Even with the Paycheck Protection Program, Whatcom County and the rest of the U.S. has had to deal with huge job losses. Locally, the unemployment rate was 4.7% in March, jumping to 17.7% in April, according to the state’s Employment Security Department. In May the rate dropped to 15.7% as Whatcom County moved into Phase 2 of the state’s reopening process.
Avoided permanent closures
Not having the Paycheck Protection Program would likely have resulted in a more severe shock to Whatcom County’s economy. Hoult said in an email that if the forgivable loans were not available, many of his clients said they would have considered closing permanently.
One other huge negative to not having the Paycheck Protection Program would have been to the state’s unemployment insurance system. Even with the Paycheck Protection Program, that system was overwhelmed not only with people filing for unemployment, but also flooded with fraudulent claims.
“Because employers could call employees back to work when the PPP funds arrived, workers were able to get paid while their unemployment insurance claims were sorted out. The PPP funds were instrumental in mitigating the impacts of the unemployment insurance payment delays,” Hoult said.
How many jobs the Paycheck Protection Program actually saved is difficult to measure. The federal estimates are based on how many employees were at risk when the company applied for the program, but there are many other factors involved, said Hart Hodges, co-director at Western Washington’s Center for Economic and Business Research.
For example, the Paycheck Protection Program money didn’t put dental hygienists back to work; they couldn’t go back to work until the restrictions were lifted and they could see patients again.
“In short, I know the PPP money did save jobs. It saved businesses. But if you start thinking about it carefully, counting the number of jobs actually saved is very hard, and some jobs are still vulnerable,” Hodges said in an email.
James McCafferty, who is co-director of the research center, agreed. He added that the Paycheck Protection Program also allowed for people to continue spending money in the local economy, keeping other businesses alive. Studies also have shown that the savings rate also went up, which is important as the coronavirus pandemic continues.
How the program was received
Initially, Hoult said, many local business owners were hesitant to apply for the program because it seemed complex and restrictive when first rolled out.
“There was a lot of fear around applying for and receiving loan forgiveness. The concept of loan forgiveness was new and frankly, some business owners simply didn’t believe the program would work as promised,” Hoult said.
Once they learned more, businesses warmed up to the idea, but faced a new difficulty: Finding a bank or other lender willing to process the loan. Many lenders who were participating didn’t initially accept applications unless the applicant had a prior relationship with the financial institution, Hoult said. Once those kinks were worked out, the process went more smoothly, he said.
With the pandemic still causing havoc in communities and on the economy, Hoult expects more participation from businesses as terms have become more flexible, early adopters are showing it works and the commercial fishing industry is now able to apply.
