MOUNTAIN HOME, Idaho — The Senate approved a nearly $500 billion dollar coronavirus aid bill Tuesday afternoon that aims to deliver funds to small businesses, hospitals, and testing, as Newsy reports. It includes $321 billion dollars for the depleted Paycheck Protection Program (PPP) and $60 billion for economic disaster loans and grants.
But some Idaho business owners are hoping the PPP assistance comes with a revised set of regulations on how one can spend those dollars. We spoke with U.S. Senator Mike Crapo, R-Idaho, on whether a shift in flexibility is likely.
But before we get to that, let's hear from a local business owner. Hailey Owen, a small business owner who was born and raised in Elmore County, owns a salon and boutique in downtown Mountain Home.
“Very rarely are you gonna hear, 'I want to do hair or I want do nails because it’s gonna make me tons of money!'" said Owen.
Owen says she does what she does for the love of the craft. She comes from a long line of small business owners.
“My grandma has owned a salon since as long as I can remember, and my mom is also a cosmetologist," said Owen.
She owns Black Sheep Boutique and Salon in downtown Mountain Home. Like everyone else, she’s had to temporarily close. This has caused her to struggle financially, and up to this point, she is still without a federal loan.
Per a Small Business Administrative representative, a salon owner like Owen can apply for the PPP to cover her salary, but she cannot apply to cover the payroll of the stylists, because they are independent contractors, not employees. They lease their chairs — as is the case in many salons. But that lease money isn’t coming in.
“I personally chose not to charge my girls rent through this, um, gosh. It sucks bad enough that they can’t come to work, and that they’re struggling to pay their bills, let alone me asking them, 'Hey, I know you’re struggling but I still need my money,'" said Owen.
So she said she is trying to make it all work on her end -- but her biggest cost is rent.
“Commercial spaces in Mountain Home aren’t cheap as it is.”
Here’s the catch, though: the PPP requires that 75 percent of a loan would need to go toward payroll, or in her case, her own wages — and only 25 percent of it could go toward her biggest expense, rent.
I caught up with Senator Crapo in a phone interview to ask him about it, as it will pertain to the new relief deal.
“Is that going to still be the regulation where 75 percent still has to be payroll-focused?” I asked.
“Yes," said Crapo. "As a matter of fact, that requirement was in the statute.”
He said Congress would need to fix that.
“Congress is aware of that, and as you know, we’re moving in the trenches trying to deal with this. And so I wouldn’t be surprised if flexibility to fix that [was] included. Because there are lot of people who don’t have a high number of employees that do have a higher ratio of fixed costs, like their rent," said Crapo.
"There will be different plans coming out," he added. "And we very much understand that those smaller employee companies with larger ratios of fixed costs need to be helped."
Crapo says economic impact disaster loans, which will be replenished in the new deal, can be used (in full, or however) towards rent and are a good option for people in Owen’s situation.
She applied but is still waiting to hear back. Still, Owen says she’s happy to hear Crapo say that congress is aware of this issue with the PPP.
“It’s really humbling just to know that, so far up the chain, that they realize that there are 'little guys' like me and so many others that are struggling," said Owen.
The House is expected to take up and pass the $484 billion dollar relief bill on Thursday. We will keep you updated.
As a sidenote, we want to continue getting your questions answered, but in order to do that, we need to hear from you. So send us an email at therebound@idahonews6.com.
