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  • Last modified 79 days ago (April 16, 2020)

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Loans provided to help keep businesses afloat

Staff writer

In a normal year, Keith Janzen and his team would be taking a breather after scrambling to file returns by today’s tax deadline.

But that was before the “Closed” signs that erupted in storefronts shuttered by the outbreak of a pandemic became a daily reminder of the mortal threat to Marion County’s small towns.

Tax preparers at Swindoll, Janzen, Hawk and Loyd, along with area bankers, spent April scrambling to help small businesses get capitol through a $349 billion relief program intended to help them survive the outbreak of COVID-19.

With the tax deadline now July 15, most clients’ returns can wait.

“It’s really different not to be working on taxes in April,” Janzen said. “But we have got to keep our communities and small businesses strong.”

The Small Business Administration-backed Paycheck Protection Program is part of the $2.2 trillion Coronavirus Aid, Relief and Economic Security Act passed in late March by Congress to help the country weather an economic crash wrought by COVID-19 lockdowns.

So far $3.7 billion in loans have been given to 19,915 Kansas businesses, U.S. Secretary of the Treasury Steven Mnuchin said in a report.

The program helps businesses with fewer than 500 employees by lending them up to two months of payroll costs, or for other expenses.

The loans will be forgiven if 75 percent of the money is used to cover payroll and employers keep the same number of workers they had before the crisis.

Sole proprietors are also eligible for help.

Applications are being accepted until June 30, but funds are first-come, first-serve, which touched off a bit of a panic for financial advisers.

Janzen and Todd Heitschmidt, president of Central National Bank, say their staffs fought to streamline the application process for clients to get them approved as quickly as possible — even as the SBA made the rules right up until the April 3 deadline.

“We’ve had staff in our banking system who were very vigilant 24 hours a day,” said Heitschmidt. “They were writing the rules and regs until 11 Thursday night when they were finalized. Our employees were still up and they were developing our processes to work with our customers.”

Heitschmidt said they have tried to make the process as simple as possible, limiting the applications to one page.

Janzen said his firm also offers payroll services and they contacted clients ahead of time to see if they were interested in applying.

“The vast majority of them did,” he said. “Some said, ‘The business is OK, three or four really. Then they backed up and said ‘Stop. This could help us get through this thing.’ ”

Janzen said the funding has already been a boon for some employees who have been let go from their jobs.

“I talked to a client today,”
Jansen said. “His people had been on unemployment for three weeks, but they started getting paid again, yesterday. Good Friday was their first day back.”

The money covers pay even for employees of non-essential businesses whose workplaces have been shut by the health department.

“This will keep employees receiving the same paycheck so the economy is not hurt so badly,” he said.

Heitschmidt said he works with well-run companies with plenty of cash savings on hand, but not to the degree that would be needed to get them through the abrupt and indefinite shut-down of their business.

“There are probably a handful of people alive that were alive in 1918 when the flu went through,” he said. “The number of fatalities was way higher then than now, but we have not seen anything like it for 100 years and few remember anything like it. How do you prepare for something you have never seen before?”

In the meantime, he says he hopes this program is all that will be needed to help get businesses through this crisis.

“Hopefully we can get it done with and move on with our lives,” he said.

Last modified April 16, 2020

 

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