How does Payroll Protection Business Loans make a difference in Camden?

CAMDEN, NJ – For John and Carol Kunkel – owners of the Haddon Heights seafood and steakhouse restaurant that bears their namesake – a plethora of reminders exist to bring them back to their COVID-19 reality.

An indoor dining area that could normally seat 140 has been replaced with a patio that seats 20. Fine menu items like Bordeaux braised beef have taken a back seat for burgers and other easy-to-prepare take-out options. And a staff of eight has been reduced to two, that’s John and his wife – with family members sometimes stepping in as well.

“Everyone is in pain right now, everyone. We are in a better position than a lot of restaurants since we bought the building 16 years ago so the mortgage is lower than most rents … but every week it gets harder and harder to do the bills, ”John told TAPinto Camden as he walked into his empty restaurant an hour after opening.

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Kunkel was one of hundreds in Camden County – and at least 62 in Haddon Heights – who received a loan from the United States Small Business Administration and the Treasury Department through the Payroll Protection Program (PPP). Data on the breakdown of 4.9 million business loans was released earlier this month.

As part of bipartisan CARES programs, the $ 521 billion program provides direct incentives for employers to keep workers on their payrolls, according to the state.

In New Jersey, 531,360 jobs were retained thanks to $ 4.5 billion in P3 loans. On average, $ 100,000 has been awarded to small business owners.

“The PPP provides much-needed help to millions of American small businesses, supporting more than 51 million jobs and more than 80% of all employees in small businesses, which are the engines of our country’s economic growth,” said Treasury Secretary Steve Mnuchin said in a statement. “We are especially pleased that 27% of the program reaches low and middle income communities, which is proportional to the percentage of the population in those areas.

The family-run restaurant has had to rely on delivery, via third-party services like Doordash and Caviar – which also take their share.

John says that in March, a month before the outbreak peaked in the Garden State and restrictions began to wreak havoc on restaurants like his, he was forced to lay off eight employees, including servers.

“The PPP money helped but it was minimal,” he explained. “It provided two and a half months of payroll, but I have other expenses besides that. If you have a restaurant you will know that the payroll is not a big part of the overhead, there is electricity, gasoline, liability insurance, all of those things.

The couple described the scrapping of Governor Phil Murphy the date of July 2 for indoor meals as “heartbreaking”. John says he had placed food orders in anticipation of the easing of the rules, while Carol pointed out about 25 face masks – with Kunkel’s name engraved on them – that were made to mark the date.

“Businesses are thriving, big names and small businesses are still hurting. I haven’t been busy since March 20, although you can see it’s possible to socialize inside the restaurant, ”John continued. “I would like to know how you pay your bills with 10% income.”

In the city of Camden, according to released data, 221 businesses received a total of $ 8.5 million in loans to support 878 jobs at an average of $ 9,681 per job.

Religious organizations received 7.7% of loans, the most of any other type of business, with law firms receiving 3.62%. Nonprofits made up 12.2% of fellows, for a total of 27.

“The impact was huge, it was extremely huge because it allowed us to keep a team all summer and to work on the review of the marketing assets of our company and to have the money to do it. and bring the tools we need to attract new clients, ”Nichelle Pace, owner of creative agency Camden Brand Enchanted, said over the phone.

Pace, who is also vice president of the Camden Business Association (CBA), said PPP loans translate to three to four months of payroll for his company.

Pace said reduced openings, particularly in states surrounding New Jersey, put additional strain on small businesses positioning themselves to start recovering in the latter half of the summer.

“We should have been on track to open everything in July like other countries, but we are not,” she said. “The long-term effects will have more of an impact on small businesses than on companies that have the funding and assets to weather the storm.”

She pointed out that there are many minority and women-owned businesses that will continue to be disproportionately affected by ongoing closures – especially on the verge of a second wave.

According to a recent study by the National Community Reinvestment Coalition (NCRC), “loan discrimination” has played a role in the distribution of PPP funds. Diving into the program, the researchers matched pairs of black and white applicants with similar credit characteristics to apply, finding that 27 of 63 white applications received better processing and results from lenders.

Only 23% of national data available in PPP loan registers include information on gender or race, as applicants are not required to provide demographic information. NRC said attempts by the PPP to claim that it invigorated certain communities were without merit.

The NRC called the data released by the Treasury Department as “unnecessary” in how it determined how these funds boost vulnerable populations.

“The lack of data creates a gap in our understanding of PPP lending and presents a challenge in understanding the impact of this program on communities traditionally excluded from access to corporate capital,” said researchers Jason Richardson and Jad Edlebi .

“However, due to the size of the program, even it offers insight into the challenges faced by women and minorities who need to access business credit,” they added.

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