TRAVERSE CITY — Clark Manufacturing Company a few months ago received a million-dollar loan through the federal Paycheck Protection Program, a sweeping effort to keep U.S. businesses functioning during the COVID-19 pandemic, designed to provide a direct incentive for small businesses to keep employees on their payrolls.

The cash enabled Clark, 2485 Aero Park Drive, to put its 75 employees to work on two projects that directly impact the national medical response to the pandemic.

“What it helped us with was just keeping operations going,” CFO Mike Novik said of the loan. “We did work on two significant projects related to Operation Warp Speed that the government was doing.”

“We made over 100,000 parts for ventilators, in conjunction with another local company here,” he said. “Ultimately, the product went to GM. We also made parts for a new assembly line they were setting up to produce vials and syringes to stockpile so that when they came up with the vaccine they would have them available.

“That was done shortly after the PPP, back in the May timeframe,” Novik said. “That (PPP loan) helped us be able to fulfill some of those Operation Warp Speed projects.”

Clark Manufacturing is one of 3,916 partnerships, sole proprietorships, companies, corporations and non-profits in Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau counties that leveraged PPP loans to keep employees on the payroll.

Those 3,916 loans — many of which potentially may be forgiven, effectively converting them into grants — brought nearly $350 million to locally based companies at a time when they desperately needed cash to keep paying their employees. The grants rolled out last spring, but full information about some of them just became available.

The federal government in July released loan amounts and names of recipients for PPP loans of greater than $150,000. But for loans less than $150,000, at that time, it released only dollar figures while withholding recipient names.

A dozen national news organizations filed a lawsuit charging that the Small Business Administration was not following requirements of the Freedom of Information Act. The SBA had denied FOIA requests, claiming that releasing information about government loans that involved $717 billion in taxpayer funds could reveal business information that should be kept private.

A federal judge in November sided with the news organizations and ordered the SBA to release loan details. Federal Judge James Boasberg called “fundamentally flawed” the SBA assertion that disclosing the amount of the taxpayer-funded loan would reveal a company’s payroll.

On Dec. 1, the SBA released names of the 4.5 million recipients of loans for less than $150,000.

Local recipients

The list says Traverse City Guitar received a PPP loan for $23,647.50. The company applied to the PPP program early in the spring.

“”My accountant at that time said, ‘Apply for everything. You’ve got to try to stay alive, so apply for everything,’” said Patty Hansen, administrator and wife of TC Guitar founder Gene Hansen. “We actually got our PPP money right away. Which was good and bad, because everything changed so much.”

“In the beginning, you had eight weeks to use that money. So we got the money, but weren’t open so we couldn’t technically use it — but you had to use it. So the time was ticking even though we couldn’t use it,” she said. “We brought our staff back right away, so that was helpful for them.”

Just before those eight weeks ended for TC Guitar, the government changed the rules by extending the use period to six months.

“All in all, I think this program was excellent,” said Hansen.

She said the company has completed the paperwork necessary to request loan forgiveness.

“They started accepting those applications quite some time ago. Many have already been forgiven,” said Sid VanSlyke, West Shore Bank senior vice president and market leader.

The SBA will forgive loans if all employee retention criteria are met and the funds are used for eligible expenses. They have an interest rate of 1 percent.

Business owners still aren’t certain how much taxes will cut into the benefit the federal aid provided, even if the loan is forgiven.

“Now from what I’m reading, the IRS is going to bite us in the end,” Hansen said, with an income tax bill on the full amount of the forgiven loan. “The program was very beneficial, even though it had its little bumps.”

Getting by

Kathy Gwizdala, owner of Fife Lake Lodging & Party Store (Kathy’s Party Store LLC), received a PPP loan for $9,633.03.

“Every little bit helped last spring when everybody was ... I don’t even know how to say it. Just different,” she said.

Gwizdala didn’t think her business qualified as essential during the spring lockdown phase, so she adapted by keeping customers outside.

“We just opened our window and did service through the window and hoped that people would come — and they did. They absolutely loved the window service.”

She dropped to just two employees. She usually has three or four on the payroll this time of year, but she can’t afford more than a minimal staff.

“It’s slow. Very, very slow, actually,” she said this week. “Which is surprising me. I don’t know if people are just being cautious because of the situation — waiting to see what next week brings, maybe.”

The PPP loan helped her remain open to keep serving her neighbors.

“I’m very thankful for it. It was a blessing,” she said of the loan.

Wide range of loans

PPP loan amounts disbursed in the five-county area ranged from a few hundred dollars to $6.7 million for Hospitality Syracuse Inc., a Traverse City-based operation associated with a multi-state fleet of 115 restaurants including Taco Bell, KFC, Long John Silvers and Pizza Hut franchises.

In between were loans of varying amounts to a broad cross section of the local business landscape: manufacturers, retailers, plumbers, restaurants, property managers, art galleries, contractors.

Grand Traverse Salad Company got a loan for $2,985. Northport Physical Therapy, LLC received $5,040. Hillside Feed & Supply LLC in Suttons Bay got $7,559. Kathy’s Party Store in Fife Lake received $9,633.03. Chaney Creek Construction Inc. in South Boardman got a loan for $30,445. Arndog’s Oilfield Services in Rapid City received $57,113.37. KISS Carpet, Inc. in Mancelona got $112,500. Traverse City Glass received a loan for $161,483. Golden Fowler Home Furnishing Inc. got a loan for $207,800.

Maple Valley Nursing Home of Maple City Inc. received $306,015. The Grand Traverse Regional Land Conservancy received $421,285. Cherry Capital Foods LLC received $497,100. Catholic Human Services, Inc. got $522,535. Northern Building Supply received $604,567.50. Oryana Food Cooperative, Inc. received a loan for $710,284. Magnum Hospitality received $921,145. Cherry Republic Inc. received $1,278,500. RJG Technologies Inc. in Traverse City received $1,830,792.50.

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