MESA, APACHE JUNCTION, AZ (3TV/CBS5) -- Some small businesses across the Valley are starting to receive checks to help them stay afloat through the COVID-19 crisis. This comes after weeks of frustration from small business owners who applied for relief loans through the Paycheck Protection Program before the feds ran out of money and had to launch a second round of funding.
“We’re definitely ready to start working,” says Luay Hanna. He and his brother Ram Sabeeh own the Cozy Corner Café near McKellips and Recker in Mesa and Mickey D’s Café near Ironwood and Apache Trail in Apache Junction.
Both locations have been closed for 40 days. Operations were shut down completely and employees were sent home. “We had some money saved up and we started basically, you know, dipping into our own money and our own savings,” says Hanna. “All of our employees are like family to us.”
Arizona's small businesses may be at a distinct disadvantage in trying to access the funding provided by the Paycheck Protection Program (PPP).
The brothers say once they learned about the Paycheck Protection Program (PPP) they reached out to their online bank and got their papers in order. “Once the application became available, we had well above and beyond what we needed,” says Hanna.
The brothers say the checks they’ve received through the PPP will ensure their 35 employees get paid through the crisis. A PPP loan can be completely forgiven if the lender spends 75% of it on payroll. The problem is that rules that determine loan forgiveness are not clear, says Certified Public Accountant, Monica J. Stern.
When the $349 billion Paycheck Protection Program quickly ran dry, the big companies that landed large loans drew the ire of small businesses and their advocates.
Stern says, for example, if a business with ten employees made some cuts, that could affect how much the business has to pay back. “Your loan amount was based, most likely, on the ten employees. Now if you only have eight in your loan period then a portion of your loan will not be forgiven,” says Stern. “If you reduced the salaries of specific employees by too much, that can also contribute to having more of your loan repayable.”
Stern says a business’ full-time equivalency (FTE) is key, but the Small Business Administration has not yet defined how many hours equals a full-time employee. Stern urges businesses receiving PPP to keep detailed records. “We’re going to be giving away free food,” says Hanna. “We just love spending time with all of our customers.”
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The brothers are kicking off their new take-out operations with a customer appreciation day on Friday, May 1. Customers can visit both restaurant locations from 8 a.m. to 1 p.m. to receive complimentary breakfast. The owners say they’re doing it to give back to the community.