Hawaii small businesses can tap into up to $284 billion in federal relief starting Monday, as the U.S. Small Business Administration restarts its Paycheck Protection Program with new rules designed to address criticisms of the initial program.
Firms that received loans under the first PPP program will be able to get second loans if they meet certain criteria.
More than 25,000 Hawaii businesses shared some $2.5 billion awarded under the first program, which provided loans that did not have to be paid back if used mainly to cover employee payrolls. Loans went to a range of players, from small surf schools to big resorts.
FCH Enterprises, owner of Zippy’s restaurants, got the maximum $10 million, for instance, and so did Kyo-ya Hotels & Resorts, which owns the Moana Surfrider Hotel, Royal Hawaiian Hotel, Sheraton Waikiki Hotel, Sheraton Princess Kaiulani Hotel and Sheraton Maui Resort & Spa.
Despite helping numerous businesses, the program drew criticism from companies that couldn’t qualify for the loans and others that said restrictions made the program impractical to use.
The program also came under fire after reports that dozens of large companies and publicly traded firms, including major franchises such as Ruth’s Chris steakhouse and Shake Shack burger joints as well as big enterprises like the Los Angeles Lakers, received millions of dollars in loans meant for small businesses. The backlash resulted in dozens of companies pledging to return the funds.
The SBA has sought to address criticisms with numerous tweaks. For example, to ensure the neediest borrowers have access, when the program launches on Monday, only community financial institutions will administer loans for first-time PPP borrowers, said Miryam Barajas, the SBA’s regional communications director for the western U.S. and Pacific Rim.
In addition, while previous loans needed to be spent quickly, businesses now have have up to six months to use the money. Furthermore, qualifying expenditures now include operating expenditures, property damage costs and supplier costs, which were not included in the previous program.
Existing PPP borrowers are now eligible to apply for a second loan if they have no more than 300 employees, used the first loan for authorized purposes and can demonstrate they suffered a decline in gross revenue of at least 25% in 2020 compared to the previous year, the SBA said.
Grants For Music Halls Are Coming Soon
Businesses getting second PPP loans will be able to go through banks as well as community institutions, Barajas said.
“Today’s guidance builds on the success of the program and adapts to the changing needs of small business owners by providing targeted relief and a simpler forgiveness process to ensure their path to recovery,” SBA Administrator Jovita Carranza said in a news release.
In addition to the PPP loan, the SBA is working on a separate grant program specifically tailored for entertainment venues. Known as Save Our Stages, the program is designed for music clubs, movie theaters and other attractions affected by the pandemic.
The program is expected to begin taking applications on January 17, Barajas said. But SBA is finalizing details.
“We haven’t issued the guidelines and rules of what that will look like,” she said.
Sign up for our FREE morning newsletter and face each day more informed.
Before you go
Civil Beat is a small nonprofit newsroom that provides free content with no paywall. That means readership growth alone can’t sustain our journalism.
The truth is that less than 1% of our monthly readers are financial supporters. To remain a viable business model for local news, we need a higher percentage of readers-turned-donors.