Thousands of Central Austin businesses received hundreds of millions in PPP loan dollars to survive through the pandemic
The YMCA of Greater Austin was one of thousands of entities in Austin to receive a loan through the Payroll Protection Program. Statewide, over $40 billion was loaned to more than 382,000 recipients. (Design by Shelby Savage/Community Impact Newspaper)
Without a $2.6 million Payroll Protection Program loan from the U.S. Small Business Administration, Sean Doles, the Y's vice president of mission advancement, said the reopening would have looked very different.
"We would have had a skeleton staff. We would have had minimal services—a lot of the services the community depends on us to provide," Doles said.
According to data released by the SBA on July 6, that $2.6 million loan to the Y helped keep 168 of the organization's more than 700 employees on staff. The vast majority of those 700 employees, Doles said, are part-time, working in roles that range from fitness class instructors to child care providers to greeters at the front desk.
When revenue was not coming in during the shutdown from sources such as swim lessons, fitness classes and day camps, he said the Y faced "existential challenges" that would have threatened those jobs this spring were it not for the PPP.
Another Austin-based nonprofit, We Are Blood, faced a similarly precarious situation prior to receiving its PPP loan. We Are Blood is the exclusive supplier of blood and platelets to hospitals in the 10-county Central Texas area, and when Gov. Greg Abbott suspended elective surgeries in March, the financial hardships of those local hospitals also extended to We Are Blood.
On April 5, We Are Blood was approved for a PPP loan of just over $2 million, which has helped the nonprofit stay at its current staffing level of 156 employees, according to Nick Canedo, vice president of community engagement.
The loan, Canedo said, has helped We Are Blood keep the staff it needed to launch a program collecting convalescent plasma from recovered COVID-19 patients. The antibodies in the plasma are then used to treat patients who are battling the virus. Canedo said We Are Blood has been able to send plasma to about 500 patients to date.
"Without our current staffing levels, we would not have been able to launch that program," he said.
We Are Blood and the YMCA are two of more than 22,000 Austin businesses, nonprofits and sole proprietors that received a PPP loan from the SBA, according to data the federal agency made public July 6. The loans to Austin-based businesses ranged from as low as $6 to as high as $5 million-$10 million.
Five Central Austin-based businesses received PPP loans in the $5 million-$10 million range: Torchy's Tacos, Hopdoddy Burger Bar, Alamo Drafthouse, data science platform Anaconda and energy services company Pinnergy. But the vast majority of the 8,583 PPP loans to Central Austin-based businesses—85.1%—were in amounts less than $150,000.
The SBA released the data July 6 after it was sued by 11 media organizations, including the Associated Press, ProPublica, The New York Times and The Washington Post, over its initial refusal to release detailed loan information.
John Arensmeyer, CEO of the national small business advocacy group Small Business Majority, said in a statement that one of every four small businesses in its network reported receiving a lower amount than it requested and that the data released July 6 is a "far cry" from an accurate representation of the program.
"Across the board, there are gaping holes and inconsistencies in the information. Serious questions remain about whether PPP funds were equitably distributed to minority-owned businesses, and there is an alarming rate of small-dollar loans," Arensmeyer said in the statement.
In Washington, D.C., lawmakers are discussing issuing another round of forgivable loans to businesses that have 100 or fewer employed and have experienced revenue loss of 50% or more during the pandemic.
Locally, businesses and nonprofit organizations are still facing significant challenges. Coronavirus case numbers and hospitalizations have spiked in Travis County and the rest of the state since early June. On June 25, Abbott once again postponed elective surgeries as part of measures he put in place to pause the reopening of the state.
This all means that We Are Blood is expecting more financial losses in the future, Canedo said.
At the YMCA of Greater Austin, where social distancing, enhanced clearing procedures and face coverings are now part of operations, Doles said the business hurdles resulting from the virus are going to be around for the foreseeable future.
"We still face an uphill struggle. As our community is grappling with this, we're finding new ways to operate in the COVID-19 landscape," he said.
Editor's Note: This story has been updated to reflect that We Are Blood has sent plasma to 500 coronavirus patients to date.