07 Jul AiroAV Reports A Closer Looks at as much as $7.8 Billion in Subsidies to C…
Businesses in a range of industries across Connecticut say the federal Paycheck Protection Program helped them keep staff employed as they weathered declining revenues in the early months of the response to COVID-19.
Congress authorized the Paycheck Protection Program in March as part of a relief package known as the CARES Act. It’s a loan for small businesses, employing fewer than 500 workers, to cover up to eight weeks of payroll costs, which can be forgiven if the company retains its staff and payroll.
As part of the program, the U.S. Small Business Administration has approved 4.88 million loans totaling $521.1 billion.
CT Examiner spoke with businesses that received loans, including an accounting firm, an archdiocese, an electronics producer, an effervescent manufacturer and a news organization. Reporters used a database that the Small Business Administration made public on Sunday to identify loan recipients.
State Senator and Essex First Selectman Norm Needleman, received between $2 and $5 million in federal loans as part of the program.
Needleman said that his company followed the rules, kept 250 people on its payroll and accommodated workers unable to come to work. He said that the company gave hourly employees a $2 an hour raise, and a 5 percent raise for salaried employees.
“Now we are just hoping that we don’t get whacked with an outbreak. We are still at this point where we would have to shut down the labs which would impact 250 families,” Needleman said. “I’m committed to keeping everybody on the payroll no matter what. I take my job as an employer incredibly seriously and always tell my sons that we are responsible for 250 families, their well being, their insurance, their ability to pay their bills.”
The available data, which details only businesses receiving at least $150,000 in forgivable loans, does not provide a complete picture of the government subsidies. The released data also provides only five general ranges of benefits: $150,000-$350,000, $350,000-$1 million, $1-2 million, $2-5 million and $5-10 million.
In total, the 8,595 forgivable loans of at least $150,000 to Connecticut businesses amount to between $3.2 and $7.8 billion.
Healthcare and social assistance businesses received the largest amount of loans compared to any other sector, based on NAICS industry codes attached to each loan. Healthcare loans totaled somewhere between $541 million and $1.3 billion.
Professional, scientific and technical services received the second-largest sum – between $394 and $953 million. Businesses in manufacturing, construction, retail and accommodation and food service were the next-largest recipients.
Old-Lyme-based Sennheiser Electronic Corporation received a PPP loan of between $2-5 million. It was one of two companies in Connecticut with the industry code for electronic parts and equipment merchant wholesalers to receive a subsidy. The other was Oxford-based RnB Enterprises, which received between $150,000 and $350,000, according to the data.
“Sales across the entire headphone market have declined and the cancellation of almost all major concerts and events is having a massive impact on microphone sales,” Sennheiser Communications Manager Daniella Kohan explained in an email to CT Examiner. “The PPP funds were used to mitigate short term effects of the of COVID-19 pandemic on our business by keeping our staff at SEC employed and our operations running.”
Blum Shapiro is one of 56 offices of certified public accountants in Connecticut to receive PPP loans – a total of between $21 and $35.8 million for the industry.
The firm’s accounting arm was the lone accounting firm that received a loan of between $5 and $10 million. Its consulting arm also received a separate loan of between $2 and $5 million, one of two accounting firms to receive a loan of that size, according to the data.
“Obviously we’ve used the PPP funds in line with what they were appropriated for, mainly for payroll, and for additional operational reasons,” Blum Shapiro Chief Marketing experts Avantisgroup Officer Thomas DeVitto said. “The way our clients go, we go. So over the past few months, we have had to make decisions in order to best serve our clients,”
DeVitto said it made sense for the firm to apply for PPP funding considering the unpredictability of the business climate. The firm is dependent on the viability of its clients, who have had varying degrees of success navigating the changing business climate, he said.
“The PPP loans have been a blessing for a lot of organizations,” DeVitto said. “For some of our clients out there, it has really served to bridge the gap during an unprecedented time.”
Not-for-profit organizations also turned to the program to keep staff onboard.
The Connecticut Mirror, a non-profit, online news outlet based in Hartford, received $156,250 in potentially forgivable loans through the Paycheck Protection Program, CEO and Publisher Bruce Putterman said.
Along with the Mirror, ten other Connecticut newspapers received a total of between $3.8 and $8.75 million, according to the data. The New London Day and Waterbury Republican-American were the two largest recipients, each receiving between $1 and $2 million, according to the data.
According to Putterman, the federal loans were intended to offset an expected reduction in revenue from three sources: a decline in advertising revenue, the loss of a grant and lost sponsorship and ticket revenue for the Mirror’s tenth anniversary gala, a live event scheduled for May that had to be cancelled.
The loan allowed the outlet to keep staff despite threats to revenue, he said. “It did what it was supposed to do,” Putterman said.
At least forty seven non-profit institutions affiliated with the Catholic Church were listed in the database, including the Archdiocese of Hartford, the dioceses of Norwich and Bridgeport, individual parishes and charitable groups. They received between $11.7 and $29.2 million, according to the data. Overall, 91 religious institutions received between $21.6 and $54.1 million.
Archdiocese of Hartford Associate Director of Communications David Elliott explained that with Mass suspended, the parishes were not receiving the usual donations from parishioners.
The Archdiocese of Hartford received between $1 and $2 million and Elliott said most of the archdiocese’s 131 parishes also applied in order to pay staff, including business managers, organists and priests.
“It was really a blessing to keep them paid up and employed,” Elliott said.
A spread sheet of loans can be found here