Editor’s Note: The below story illustrates the importance of the Paycheck Protection Program in helping small businesses continue to operate at this difficult time. On April 16, this lifeline program ran out of funding. There’s no excuse for that.
We are urging Congress to quickly increase the funds, and we encourage you to join us. No small business or independent contractor should be left behind because others received funding first. Click here to join the call for action.
Spencer and Bahar Ferguson say the Paycheck Protection Program (PPP) is exactly what their computer technology services small business, Wasatch I.T., needed to weather the coronavirus disruption. And on Saturday, April 3—one day after the PPP application window opened—their full loan amount was funded two hours after they submitted an application.
“It was amazing; we could not believe it,” Spencer Ferguson said. He assumed it would be at least 30 days before the funds appeared.
The Ferguson’s fast turnaround came after thorough research and preparation. Once the Coronavirus Aid, Relief and Economic Security Act (CARES Act) seemed likely to pass, Spencer and Bahar immediately started putting feelers out to banks to get a sense of their loan options. They began learning all they could about the PPP, and the paperwork needed to apply, through their involvement in the U.S. Chamber of Commerce Small Business Council.
The Ferguson’s preferred lender was Mountain American Credit Union, a regional credit union in Utah they had a great relationship with. However, their banker there told them Mountain American would not be able to fund loans over $350,000. Wasatch I.T. needed more. Spencer and Bahar decided their best option was to “get in line” at a larger, national bank that was allowing applications to be submitted in waves.
As Spencer and Bahar were anxiously waiting for their turn to apply, their banker at Mountain American sent a text saying they had removed their PPP loan cap and would be able to fully fund the Ferguson’s requested loan amount. Spencer applied immediately, and two hours later their full loan amount was deposited in their bank account.
Derek Miller, President and CEO of the Salt Lake Chamber and Downtown Alliance, said that although great speed and collaboration resulted in Wastach I.T. getting their loan, other businesses that are still waiting are not alone.
“Many banks and credit unions are still coordinating with the Small Business Administration in an effort to release funds, and we advise all those who have applied to work closely with their financial institutions to monitor progress and appropriately encourage timely engagement,” Miller said.
A Surging Workload But an Uncertain Future
Wasatch I.T. in Murray, Utah, employs around 40 technicians and supplies tech support to more than 500 small businesses in Utah and beyond. Spencer started the business when he was just 22-years-old after working in a Microsoft call center selling software to businesses. His wife Bahar joined him as President of the company three years ago after a career practicing law.
During the coronavirus outbreak, Wasatch I.T.’s workload doubled overnight. Many clients needed help moving to remote work or suddenly had a critical need for increased tech support. One client is a prescription drug manufacturer making several drugs being used to treat COVID-19 patients. Another is a nonprofit health clinic that needed to find a way to treat patients in an alternate location.
“[Our employees] don't get to just shelter and pretend that life isn't happening. They're still here supporting customers and making sure that they're able to get their jobs done,” Bahar said.
While their workload may have doubled, incoming revenue dropped because the Fergusons had several new client projects in the pipeline that came to a sudden halt. They also worry many clients may need to alter their contracts, or drop Wasatch I.T. as their tech support altogether, as they weather their own financial losses.
“Nobody's switching to a new I.T. provider right now,” Spencer said. “We're not growing, and we have lost a lot of our project revenue because customers aren't having us come into their offices and put in server infrastructure.”
The Fergusons plan to put their PPP loan to use immediately for current payroll and lease expenses, and they say the funding has sparked a newfound confidence that they can survive a situation where they continue to lose new projects and clients.
“The PPP is exactly what we needed to get through the uncertainty,” Spencer said.
The U.S. Chamber of Commerce recently launched the Save Small Business Initiative, a nationwide program to provide supplemental funding, resources and webinars, research, and advocacy for American small businesses. For more small business resources or to get involved, visit here.