PPP loans offset COVID-19 losses for small businesses

By , Daily Memphian Updated: July 08, 2020 10:18 PM CT | Published: July 08, 2020 1:28 PM CT
<strong><span>Paycheck Protection Program</span> loans went to a range of schools, including Lausanne, St. George&rsquo;s, St. Mary&rsquo;s, St. Agnes and Hutchison (where pre-k students planted carrot seeds in the school garden on Sept. 25, 2019) as well as charter schools KIPP Memphis, Freedom Preparatory Academy, Gestalt Community Schools and Memphis Business Academy.</strong> (Patrick Lantrip/Daily Memphian file)

Paycheck Protection Program loans went to a range of schools, including Lausanne, St. George’s, St. Mary’s, St. Agnes and Hutchison (where pre-k students planted carrot seeds in the school garden on Sept. 25, 2019) as well as charter schools KIPP Memphis, Freedom Preparatory Academy, Gestalt Community Schools and Memphis Business Academy. (Patrick Lantrip/Daily Memphian file)

Paycheck Protection Program loan data for Memphis and Shelby County is a virtual who’s who of Memphis small businesses and institutions.

The federal coronavirus relief program poured at least $1.15 billion in loans into more than 14,000 businesses including popular restaurants, health care providers, private and charter schools and places of worship.

The loans, part of the Coronavirus Aid, Relief and Economic Security (CARES) Act, are intended to be forgiven if recipients use them to save jobs. Recipients in Shelby County reported retaining at least 50,000 jobs.

The Trump administration released the redacted data under pressure from news organizations, which filed suit in May to force disclosure of loan amounts and other information. Businesses that received more than $150,000 were identified, but loans were stated in ranges rather than specific amounts.


PPP small business loans more likely to be forgiven under new guidelines


Recipients included Elvis Presley Enterprises ($2 million to $5 million), Sun Studio, ($150,00 to $350,000) and many other tourist attractions: the Memphis Zoo, Memphis Pink Palace Museum, Children’s Museum, National Civil Rights Museum and Dixon Gallery & Gardens.

The Memphis River Parks Partnership got a PPP loan for $350,000 to $1 million, as did the Memphis in May International Festival.

Flight Memphis LLC, a restaurant group recently the subject of civil rights protests over allegations of bias in treatment of Black customers, reported saving 88 jobs with a loan of $350,000 to $1 million.

The top five business categories for loans were professional, scientific and technical services; ambulatory health care services; specialty trade contractors; food services and drinking places; and administrative and support services.

Wendy’s franchise owner Wendelta Inc., a family-owned venture that’s behind key Downtown developments including One Beale, joined Campbell Clinic, West Clinic and MSK Group in an elite group of businesses that got the biggest loans.

They were among 11 companies that received loans between $5 million and a maximum $10 million. Those included construction industry suppliers Upright Holdings Inc. and Building Plastics Inc., online printer Mimeo.com, trucking company JNJ Express Inc., real estate firm CLK MultiFamily Management LLC and environmental services providers EnSafe Inc. and Eastport Holdings LLC.

Nine of those companies reported saving 4,054 jobs with the loans, while job numbers weren’t shown for two companies, Building Plastics and West Clinic.

Wendelta president and chief operating officer Chance Carlisle said the PPP loan was a lifeline during the most challenging time in the history of the company, which operates 150 Wendy’s restaurants.

“COVID-19 created challenges we had never fully prepared for or expected, and continues to provide daily surprises in an environment that’s rapidly changing in a whole myriad of ways,” Carlisle said.

“We were fortunate to use our PPP loan to provide for our employees, our families, in the form of salaries, benefits and bonuses, which is how we used 100% of our loan,” Carlisle said.

The data said Wendelta retained 500 jobs, but the number was more than that. PPP loans were restricted to companies that employ no more than 500 employees per physical location.

University of Memphis economist John Gnuschke said the PPP program, like $600-a-week federal payments to the unemployed, helped limit the damage of business closings during the pandemic’s opening months.

“The job retention component of PPP was vitally important and kept our unemployment rate from exploding,” said Gnuschke, director of the Sparks Bureau of Business and Economic Research.

Memphis metro area unemployment peaked at 12.7% in April, and more than 57,000 people in Memphis and nearby areas of southwest Tennessee were still drawing unemployment in late June.

Data released by the Small Business Administration on Monday, July 6, showed PPP loans had the most concentrated impact in Shelby County’s suburban communities and the least impact in inner-city or rural areas.

Collierville, Bartlett, Germantown and East Memphis led with more than 3,000 jobs in each suburb retained. The least job retention, less than 400 jobs, was recorded in Greenlaw, South Memphis, Jackson/Farmville and North Memphis.

Collierville had the most jobs retained, 3,697, followed by Bartlett, 3,641, Germantown, 3,290, and East Memphis, 3,107.

“The loan concentration is consistent with the complexity of the program and the short time line for making applications,” Gnuschke said.

“Special assistance for low-income areas or special set asides for small businesses from those areas is the only way to effectively diversify the lending patterns. Perhaps extending the program will allow greater diversification, but it still seems unlikely to be a great help in our poorest neighborhoods,” Gnuschke said.

The program, which businesses access through lenders, has been extended through Aug. 8 with about $130 billion still available. It originally had about $670 billion and was programmed to end June 30 before Congress extended it.

First Horizon Bank, the largest bank in Memphis and Tennessee, was far and away the biggest originator of PPP loans over $150,000 in Shelby County, handling 379 loans or 20% of the total.

Looking at the group of loans greater than $150,000, First Horizon was trailed by Pinnacle Bank, 135 loans, 7%; Renasant Bank, 129 loans, 7%; Paragon Bank, 123 loans, 6%; and Regions Bank, 113 loans, 6%. First Horizon handled six of the 11 loans of $5 million to $10 million.

The picture was somewhat different for loans under $150,000. First Horizon originated 13% of those loans, followed by Bank of Bartlett, 1,202 loans, 9%; Regions Bank, 948 loans, 8%; Kabbage, 927 loans, 8%; Celtic Bank Corp., 693 loans, 6%; and Renasant Bank, 605 loans, 5%. 

Data showed recipients included many schools, churches, car dealers, restaurants and food service companies, construction companies, law firms and health care, particularly those reeling from having to stop elective surgeries.

More than 125 restaurants and food-related businesses qualified for loans. The biggest, after Wendelta, were Beale Street Blues Company, operator of B.B. King’s Blues Clubs and other restaurants, in the $2 million to $5 million category; and in the $1 million to $2 million group, restaurant operators Pyro’s Company LLC (pizza); DFD Barbeque LLC (Corky’s BBQ); River Waffles LLC, (Waffle House); National Cities, (Little Caesar); Memphis Foods LLC (Zaxby’s); and RGT Management Inc. (Taco Bell).

East Memphis institution Gibson’s Donuts got one for $150,000 to $350,000, and Huey’s snagged separate grants for restaurants in eight locations, two of the $350,000 to $1 million variety and six ranging from $150,000 to $350,000.

The nonprofit that operates The Daily Memphian, Memphis Fourth Estate Inc., reported receiving a loan of $350,000 to $1 million (the exact amount was $661,000) and retaining 45 jobs; and Contemporary Media, publisher of the Memphis Flyer and Memphis Magazine, reported a $350,000 to $1 million loan and retained 35 jobs.

Nearly 60 places of worship received PPP loans, led by loans of $1 million to $2 million to Hope Presbyterian, 192 jobs, and Second Presbyterian, 201 jobs.

The SBA reported a larger loan for Germantown United Methodist Church than the church reported receiving. Church leaders said the data was incorrect and that the church actually had received $359,529.58. The SBA said the church retained 59 jobs.

Senior Pastor Rev. Tim Carpenter said, “The congregation of Germantown UMC continues to give generously as they can, but many people’s ability to give has been adversely affected by COVID. The congregation’s leadership, in support of its staff, applied for the PPP loan to make sure staff was not laid off during the pandemic.”

Other faiths also got into the act. The Muslim Community Center and Temple Israel each obtained loans of $350,000 to $1 million.

Nonprofits including Bridges, Boys & Girls Clubs, MIFA, Habitat for Humanity, Ballet Memphis, the Orpheum Theatre, Memphis Symphony Orchestra and Shelby Farms Park Conservancy received loans.

Loans went to a range of schools: Lausanne, St. George’s, St. Mary’s, Hutchison and St. Agnes as well as charter schools KIPP Memphis, Freedom Preparatory Academy, Gestalt Community Schools and Memphis Business Academy.

The data listed specific amounts for loans under $150,000 but did not identify recipients. Those represented 12,248 loans totaling about $395 million in Shelby County.

The SBA showed 1,941 loans of more than $150,000: 82 of $2 million-$5 million; 166 of $1 million-$2 million; 600 of $350,000-$1 million; and the balance of $150,000-$350,000.

Based on minimums in each range, loans of more than $150,000 totaled at least $756 million. At the high end, those loans could be worth more than $1.8 billion.

To see full data sets from local PPP data, click here.

The SBA data can be found at sba.gov.

 Editor’s Note: The Daily Memphian is making our coronavirus coverage accessible to all readers — no subscription needed. Our journalists continue to work around the clock to provide you with the extensive coverage you need; if you can subscribe, please do

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Topics

Paycheck Protection Program small business administration
Wayne Risher

Wayne Risher

Business news reporter, 43-year veteran of print journalism, 35-year resident of Memphis, University of Georgia alumnus and proud father and spouse of University of Memphis graduates.


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