From car dealers to construction companies, Minnesota employers hauled in $11.2 billion through the popular Paycheck Protection Program (PPP), ranking the state No. 15 in the U.S., according to data released Monday by the U.S. Small Business Administration.
The program, which is credited with lowering unemployment this spring, helped employers bring back more than 51 million jobs in the U.S. at a time when the economy was crashing. But many employers have been critical of the program, especially retailers and restaurant owners, who say the government essentially pressured them into rehiring furloughed workers at a time when they were still shut down and unable to generate much if any revenue.
Congress has now agreed to extend the program, which was due to expire on June 30, until Aug. 8 to allow business owners a chance to apply for more than $130 billion in remaining funds. Altogether, 4.9 million employers have received a total of $521 billion in relief through the program.
The loans are forgivable as long as employers spend at least 60% of the funds on payroll, down from 75% in the original bill. The formula was changed through bipartisan legislation co-sponsored by U.S. Rep. Dean Phillips, D-Minn.
Now, another Minnesota member of Congress — Rep. Angie Craig — is leading an effort to pass legislation that would allow business owners to apply for a second PPP loan as long as their sales have declined at least 50% since the onset of COVID-19.
Treasury Secretary Steven Mnuchin told a House committee last week that the administration supports the idea of providing targeted assistance to businesses that have been harmed by the economic downturn.
“Certain industries, such as construction, are recovering quickly, while others, such as retail and travel, are facing longer-term impacts and may require additional relief,” Mnuchin said.
In Minnesota, hotel and restaurant owners would welcome another crack at PPP funds. The state’s hospitality industry received $348 million through the PPP.
“I do think another round of relief is going to be necessary,” said Ben Wogsland, spokesman for Hospitality Minnesota, which represents hotels and restaurants throughout the state. “You have restaurants operating at 50% capacity, and no one can make money at that rate. They are just losing less money. And you have occupancy problems at hotels and resorts.”
Although Mnuchin and the SBA originally refused to make public the names of PPP loan recipients, they changed course after critics blasted the administration for a lack of transparency. But administration officials are still not providing hard numbers, instead classifying loans according to size, such as companies that received between $5 million to the program maximum of $10 million. The PPP was open to companies with 500 or fewer employees, including restaurant chains with no more than 500 employees per outlet.
In Minnesota, 132 employers received at least $5 million, including a hog farm in Sleepy Eye, 20 construction companies and eight restaurant owners. Some of the biggest recipients are well known, such as Chanhassen cheesemaker Bongards Creameries, Minneapolis law firm Robins Kaplan and D’Amico Holding Company, which operates Italian restaurants in the Twin Cities such as Campiello and D’Amico & Sons.
Also receiving at least $5 million: the Breck School in Golden Valley, retailer Christopher & Banks, restaurateurs Famous Dave’s and Granite City and technology provider Loffler Companies. Among companies that received at least $1 million are more than 400 auto and truck dealers, including Duluth Ford, Golden Valley Motors and Peterbilt of Winona.
Health care companies and construction firms received the most help. In Minnesota, more than 1,800 construction companies — ranging from large homebuilders to suppliers — received at least $813 million, preserving at least temporarily more than 67,000 jobs.
Industry leaders said the aid will help the industry recover much faster than it did following the last recession, which started in 2008 and reduced construction spending for three years.
“We are seeing a much faster and much less painful recovery,” said David Siegel, executive director of Housing First Minnesota, which represents 1,100 homebuilders and suppliers in the state. “That’s why this program is working for us. You would have seen a lot of people get laid off who were not laid off, because this money let people get their footing and see what this thing looked like.”
In the health care industry, more than 1,900 employers received at least $797 million, which helped retain 128,200 jobs.
The Mankato Clinic, which runs a network of medical facilities in the Mankato and St. Peter region, would have been forced to lay off half of its 850 employees without a $10 million PPP loan because it had to stop performing nonemergency medical procedures, including higher-revenue services such as MRI scans, CEO Randy Farrow said.
The people who were kept on duty were reassigned to other projects that would have needed to get done anyway, including setting up a respiratory clinic that had an outdoor area for COVID testing and establishing telehealth services. “We were able to find a lot of things for staff to do,” Farrow said.
At Tri-County Health Care in Wadena, CEO Joel Beiswenger said between 70 and 90 people on the hospital’s staff of 450 would have been temporarily or permanently let go without the $5.6 million in PPP funds and other money that was available.
“It really changed it from what I termed an existential crisis,” Beiswenger said. “We are now very confident that we will come through this.”
Among other things, funding paid for employees to do emergency COVID planning and take on newly created roles.
The government’s list of loan recipients contains some inaccuracies. For instance, the SBA reported that the regional Planned Parenthood office in St. Paul received at least $5 million through the program, but spokeswoman Emily Bisek said the organization withdrew its application and the loan was never funded.
Missing from the list is Shake Shack, which announced it was giving back $10 million in PPP funds. Shake Shack generated almost $600 million in revenue last year, raising questions about the program’s lack of a financial needs test.
An SBA spokeswoman said that a borrower being listed in the data as having a PPP loan does not mean that SBA has determined that the borrower complied with program rules or is eligible to receive a PPP loan and loan forgiveness.
Staff writer Joe Carlson contributed to this story.