Almost 8,000 Marin County businesses and nonprofits borrowed money under the federal Paycheck Protection Program, according to data released this week by the Small Business Administration.
The program was created by Congress in April to help small businesses weather the economic storm caused by the coronavirus pandemic.
In Marin, more than 85% of the borrowers got small loans under $150,000. The SBA released only the names of companies that got large loans of $150,000 or greater, and provided only a range for the loan amount each company was given.
The largest loans, between $5 million and $10 million, went to nine companies in Marin. They included the Corte Madera-based restaurant chain Il Fornaio, the professional services firm Nes America in Tiburon and the janitorial services company Township Building Services in Novato.
Three nonprofits were also approved for the largest loans, including the San Rafael social services organization Bay Area Community Resources, the real estate organization EAH, also in San Rafael, and the Larkspur health care organization Hospice by the Bay.
Three construction firms were among the largest loan recipients, including W. Bradley Electric in Novato, Ghilotti Bros., Inc. in San Rafael and the Dutra Group, which owns the San Rafael Rock Quarry.
Aimi Dutra, a spokeswoman for the Dutra Group, said the company laid off about 20% of its roughly 300 staff members in March, but hired them all back in April when the loan was approved.
“Not knowing what the future held, we had to dial things back and lay people off,” she said. “So when the PPP program came along, it was a mechanism that allow us to bring people back to work and fulfill contracts that eventually came back online.”
In the small loan category, professional and technical services companies borrowed the largest chunk of the money in Marin — roughly 19% of the total, according to a Marin Economic Forum analysis of the SBA data. Health care and social assistance companies borrowed 12% of the money, construction firms borrowed 11%, accommodation and food services companies borrowed 7% and retail businesses also borrowed 7%.
Although professional services and health care companies borrowed more than other sectors, unemployment data show the job losses for those industries were relatively low, said Robert Eyler, chief economist for the Marin Economic Forum. Job losses were much higher for hotels, restaurants, hair salons and nail salons, which borrowed a much smaller chunk of the money, he said.
“You may have seen more sophisticated firms seek the money because it provided them with a bridge over troubled water. But at the end of the day, they may not have had as much trouble,” Eyler said.
“The question is, without PPP, how much worse would it have been for restaurants and hotels, and will it matter anyway? The businesses got the money, but will they survive anyway, even with the bridge, given that this situation is starting to elongate?”
In total, 6,739 Marin County companies were approved by lenders for small loans and 1,081 were approved for large loans. About 100 businesses and nonprofits in the county borrowed $1 million or more.
The PPP initiative has distributed $521 billion to nearly 5 million companies and organizations in the U.S.
Economists generally credit the program with helping prevent the job market meltdown from being much worse. Employers added 7.5 million jobs in May and June, but the economy was still left with nearly 15 million fewer jobs than before the pandemic. The PPP probably drove some of that gain.
But the program was only intended to carry the economy through a short interruption from the coronavirus pandemic, which is now threatening to have a longer-lasting impact. The U.S. Treasury Department initially required the loans to be spent within eight weeks of being received, though that was later lengthened to 24 weeks.
Many small businesses have already run through their PPP money and still face sharply smaller demand, as consumers remain wary of returning to their older habits of shopping, visiting gyms, or eating out.
“The biggest issue is that PPP is short-term help,” said Adam Ozimek, chief economist at Upwork, a freelancing platform. “And now we’re dealing with a mid- to long-term problem.”
A survey by the National Federation of Independent Business found that as of mid-June, 14% of small businesses that borrowed from the PPP expected they would have to lay off some workers when their loan ran out.
The program provided loans of up to $10 million for small businesses to help them recover from the government-ordered shutdowns and revenue losses caused by the virus outbreak. The average loan amount for the entire program was $107,000, the Treasury Department said in a broad summary of the program.
The loans can be forgiven if the businesses mostly use the money to continue paying their workers. The program initially was set to expire June 30 but was extended last week to Aug. 8, with $132 billion still available.
The Associated Press contributed to this report.
