HARRISBURG, Pa. (WHTM) — It has been about two weeks since Congress passed a $2 trillion stimulus bill designed to buffer a battered economy struggling amid coronavirus-related closings.
A big chunk of the money, $350 billion, was earmarked to help small businesses in the form of the Paycheck Protection Program. That money will soon be flowing in the Midstate and abc27 recently spoke with a hopeful recipient and the local bank that helped him access the cash.
Small businesses, like the Philly Pretzel Factory in Camp Hill, have had their finances tied up in knots as a result of the pandemic.
“It’s the scariest time I’ve probably had since I opened in 2008,” said Mike DiSante, who owns two pretzel stores and a stand.
“We’re down 50% of our revenue in the first few weeks of this going on,” DiSante said.
Desperation and despair led him to Orrstown Bank.
“People in this community need our help, and as a community bank, we’re going to help them,” said Luke Bernstein, Executive Vice President at Orrstown. He said his team worked 24/7 to understand the 800-page stimulus bill and how to secure its cash for local businesses.
Banks play an important role in the distribution of funds and doing the initial screening of applicants to make sure they qualify. The $350 billion for small businesses is intended to help employers keep employees on the payroll.
“What that’s designed to do is get people back to work,” Bernstein said. “Or if they can’t go back to work, keep them getting paid.”
There are strings attached, however. 75% percent of the money must be used to pay workers, the rest can fund operating expenses. But businesses that follow the rules may see those strings get cut.
“It starts as a loan and then if you meet this over the eight-week time period, that loan will be completely forgiven,” Bernstein said.
They won’t have to pay it back?
“That’s correct,” Bernstein said. “Essentially that loan will become a grant.”
DiSante was not an Orrstown customer but the bank walked him through the application process, got him in the pipeline, and the owner of soft pretzel shops should see hard cash very soon.
It is the first bit of good news this small business owner has had in quite awhile.
“Unfortunately, the last few weeks we had to go to skeleton crews in our stores,” DiSante said. “These loans will help us open it up and bring people back on board.”
Bernstein notes that the program is first-come, first-served and with 30 million small businesses in the U.S., there is not enough cash to go around to all that need it. Over the weekend, President Trump did note that if the program runs well, he would push to extend it.
Local banks, like Orrstown, have all the particulars on how to apply and qualify for stimulus money on their websites.