As the pandemic hit and the country launched into an economic crisis, the U.S. Small Business Administration released the Paycheck Protection Program to financially support businesses through the pandemic. The goal of the program is to keep businesses afloat and retain workers. Since then, 4.9 million businesses have received loans, including over 79,000 in Indiana.
On July 6, the SBA released a database of all PPP loans above $150,000. In Bloomington, 207 businesses are listed as having received loans over $150,000.
Joshua Bernstein, IU assistant professor of economics, said the PPP program has been undoubtedly beneficial in helping businesses to survive and keeping jobs that would have otherwise disappeared. While overall trends cannot yet be known, he said the PPP replaces income that businesses would normally have received with government money.
The WonderLab Museum of Science, Health and Technology is one of the 207 Bloomington businesses that received a loan. WonderLab's loan was between $150,000 and $350,000, according to the SBA's database which organizes businesses into general ranges of loan amounts. Karen Jepson-Innes, executive director of WonderLab, said the PPP loan has been transformational, allowing WonderLab to hold on to staff and continue operations. The months between March and now, she said, are typically the highest revenue months of the year, therefore the loss of revenue significantly affected WonderLab.
Jepson-Innes said while a few staff members were furloughed and some staff faced temporary reduction in hours, WonderLab is now operating online programs and summer camps to continue operations. The loan has helped her business to bring back staff.
As the primary goal of PPP is to keep people employed, the SBA allows businesses to apply for loan forgiveness if at least 60% of the funds are used for payroll costs.
Jepson-Innes said WonderLab has exceeded this minimum personnel cost and expects the loan to be forgiven.
Mother Bear's, a Bloomington-based pizza company, received a PPP loan between $350,000 and $1 million. Ray McConn, president of Motherbears Inc., said that the loan was not totally necessary, and it was primarily used for cash reserves to utilize when needed. McConn expects the loan to be partially forgiven, although he is unsure of specific numbers.
Mother Bear's, McConn said, typically employs about 200 people during the school year, and due to the pandemic, it had to lay off about 130 to 140 of them, although they re-hired several of these employees once Mother Bear's reopened.