P3 loans injected $ 13.7 billion into the North Texas economy? Here’s who benefited from the stimulus program

Deb and Scott Dodson ran out of options last spring at their Waxahachie bowling alley, Hilltop Lanes, after being closed for more than two months when the COVID-19 crisis swelled in Texas and nationwide.

The banks were not lending. They told their 20 employees to collect unemployment checks until the bowlers can return.

But just as Governor Greg Abbott gave his approval to reopen bowling alleys, bars and a handful of other businesses, the Dodsons and Hilltop Lanes received a loan of $ 63,240 from the Check Protection Program. federal payroll to help them prepare their businesses to start over. .

“It all went to the employees and it was exactly what we needed,” said Deb Dodson, a lifelong bowling enthusiast who bought Hilltop Lanes four years ago with her husband. “And the people came back. We are busy again. Not as busy as we are, but our customers have come back.

Hilltop Lanes was one of 128,000 North Texas businesses that received repayable PPP loans totaling more than $ 13.7 billion, according to data released by the Small Business Administration and compiled by The morning news from Dallas. The $ 669 billion business assistance program has helped establishments with 500 or fewer employees cover salaries and other necessary business costs as part of the larger $ 2,000 billion stimulus package known as the CARES law.

While the loan program has been widely criticized for being rushed into place and underestimating the duration and severity of the pandemic-induced recession, economists and business groups say it has saved thousands of businesses and possibly hundreds of thousands of jobs in North Texas alone.

“PPP loans have been a lifeline for many of these businesses,” said Robert Dye, chief economist at Dallas-based Comerica Bank. “It was a very important and very important element in keeping businesses running. “

Dye said business loans were a necessary part of the multi-pronged attack used by the government to slow the damage from the pandemic. The CARES Act provided $ 260 billion in additional unemployment benefits, $ 300 billion in cash payments for every U.S. household, and billions more to boost financial markets.

Hilltop Lanes is one of thousands of stories in North Texas of how economic stimulus has kept businesses afloat. Maybe with so many it helps to take a step back and take a broader look at the impact on the region.

$ 13.7 billion went to 128,127 companies

The median P3 loan in North Texas was $ 22,500. But that was only a fraction of the aid given to the region.

Nationally, the federal government provided 5.2 million loans for a total of $ 525 billion. Some of the money is not allocated, and Congress decides exactly how to pool that money into a potential next bill that could be used by the same companies that received loans in the bill passed in March.

The funds were intended to cover around eight weeks of expenses and based on the number of employees and salaries of the companies operating in 2019.

The program was designed to help businesses get through a much shorter pandemic, said Herbert Austin, district manager of the SBA’s Dallas-Fort Worth office.

“If it hadn’t been for the P3 program, many small businesses would have closed forever and never would have reopened,” Austin said. “I wish it had lasted longer.”

That $ 13.7 billion is money that will likely stay in the economy. The loans will be fully forgivable, as long as businesses use them to cover expenses incurred as a result of the crisis. The US Treasury Department said in October it was streamlining the process for canceling loans under $ 50,000 while taking the time to better review larger loans.

An additional $ 447 million was distributed to 5,500 companies under another part of the CARES Act called Economic Injury Disaster Loans. These loans have an interest rate of 3.75% and are deferral for one year.

In addition, $ 526 million was given in the form of EIDL Advance Loans, which are similar to the other EIDL program but capped at $ 10,000 and totally forgivable for businesses that needed the cash to get through the worst of the world. pandemic.

Still struggling businesses are anxiously awaiting Congressional action to reinstate the program, Austin said. The latest stimulus package proposal includes $ 300 million for SBA loans, but it’s not clear whether congressional leaders will agree with this.

Small businesses dominated PPP

More than half of all the money in North Texas, about $ 7.1 billion, went to companies with fewer than 50 employees.

This was true for companies like Hilltop Lanes, which helped employees apply for improved unemployment compensation when it closed. The Dodsons have told their 20 employees, most of them part-time, to return when the lane reopens.

It took months for sales to pick up. Capacity is still limited, but Deb Dodson said the lane’s 16 lanes don’t come close to the building’s 260-person limit, even with four people per lane.

The leagues restarted in the summer and are now full. The weekend birthday parties have returned, although they have slowed down in recent weeks.

Hilltop Lanes received a $ 63,240 P3 loan to help pay its 20 employees.
Hilltop Lanes received a $ 63,240 P3 loan to help pay its 20 employees. (Vernon Bryant / Staff Photographer)

Some things have changed. There are fewer casual bowlers after the league ends. Many nights Hilltop Lanes closes early.

But thanks to the careful bookkeeping of Scott Dodson, who was an accountant before the couple bought the lane, Hilltop Lanes has remained profitable.

“If you buy a get-rich bowling alley, you’re in the wrong business,” Deb Dodson said. “But we’re not losing money either.”

Some of the smaller companies were the first to receive the stimulus money. Almost half of the number of loans in North Texas went to businesses with two or fewer people.

Big employers have taken out big loans

About 1.2% of Dallas-Fort Worth businesses accounted for 25% of all loans. Indeed, these 1,524 beneficiaries of larger PPP loans represent about 25% of all jobs supported by the PPP program.

Nearly 130 employers in the region have taken out the maximum amount – $ 10 million – in loans.

Among these employers are familiar names. Dallas-based Studio Movie Grill, which filed for bankruptcy in October, received $ 10 million, along with restaurant chains such as TGI Friday’s, Mimi’s Cafe, Mi Cocina’s parent company, Pei Wei, Zoës Kitchen and the law firm of Thompson and Knight. The other top recipients included hotel chains, recruiting companies, fast food franchises and trucking companies.

The SBA released data on 15,556 North Texas companies in July who received P3s but gave only a range of loan amounts for these companies. The new data shows the exact amount businesses received, as well as the number of employees businesses reported getting their loans.

Doctors, restaurants and other large loan recipients

No industry has tapped into the loan program more than doctors’ offices, according to SBA data. Restaurants, real estate agents, lawyers and dentists were among the other top recipients.

Some 3,900 doctors in North Texas have taken out more than $ 434 million in loans. The loan total was only exceeded by full-service restaurants, which received $ 638 million for 3,743 businesses.

It’s no surprise that doctors needed help during the worst of the pandemic, especially since many patients may have been afraid of interacting with potentially sick people, said Tom Banning, CEO. from the Texas Association of Family Physicians.

“At the end of March and April and May, you saw the training volume drop from 50% to 70%,” Banning said. “Doctors have incredibly high fixed overhead costs. “

While hospitals received a large portion of the stimulus funds through Medicaid and Medicare grants, individual physicians were not included.

Doctors also have a lot of employees who depend on them, Banning said. Loans to those 3,900 doctors have helped support 33,866 jobs, the data shows.

Unfortunately, Banning said, small doctor’s offices still haven’t fully recovered and may not be for many months. He said the COVID-19 recession would likely accelerate the trend of independent practices selling to large hospital groups and private equity funds.

“When you look at previous recessions, people thought the medical industry was recession-proof because people were still getting sick, people still needed to manage their chronic illnesses,” Banning said. “No one was prepared for a scenario where we have a public health crisis and people stop seeing the doctor.”

Correction: An earlier version of this article indicated the incorrect amount of PPP loans made nationwide. The federal government has loaned $ 525 billion in paycheck protection program funds.

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