ELLSWORTH — How do I handle hiring? Should I lay off or furlough employees? What relief programs should I apply for and when? Will there be a season at all?
Several dozen local business owners, employers and sole proprietors gathered via Zoom videoconferencing on Friday. It was the second in a series of weekly meetings hosted by Heart of Ellsworth aimed at helping the business community through what is shaping up to be one of the most uncertain financial periods in decades.
“It truly is a shoot, then aim, then fire type of scenario,” said Chris Fitzpatrick, executive vice president of business banking at Machias Savings Bank.
Fitzpatrick joined local legislators Sen. Louie Luchini (D-Hancock County) and Rep. Nicole Grohoski (D-Ellsworth) along with representatives from the city and Small Business Development Centers (SBDC) to field questions about what relief is available to employers and employees.
There are a number of options available to small business owners, including temporary programs being offered via the U.S. Small Business Administration (SBA). They include the Paycheck Protection Program, Economic Injury Disaster Loans (EIDL) of up to $10,000, advance express bridge loans and debt relief.
“I think we’re all just trying to absorb what these different programs are,” said Shannon Byers, who directs the centers in Hancock and Washington counties for the Maine SBDC.
Byers added that “Unemployment for self-employed people is coming,” although “it’s not up and running yet.”
Luchini said there will be an expansion of unemployment benefits to include those who are self-employed or sole-proprietors (Maine has more than 100,000 such individuals, he said) but added that it’s best to wait to apply until more federal guidance is available.
“Don’t apply for unemployment yet if you’re self-employed because it will very likely result in a denial,” said Luchini.
Once that program is in place, said Luchini, the benefits will be retroactive back to the beginning of February for those whose operations were affected by the virus.
The Paycheck Protection Program, intended to incentivize small businesses to keep employees on their payroll, is a loan of up to $10 million. If all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest or utilities, the loan will be forgiven, meaning it effectively operates more like a grant, Byers explained.
Nonprofit organizations are also eligible to apply for the program. After filling out an application, the SBA will determine how much a business or organization is eligible to receive.
“If you’re a seasonal business they’ll look at what your typical season is,” said Fitzpatrick, “or you can do it based on the 12-month history from last year.”
If you’re a business owner with employees who are already receiving unemployment, said Fitzpatrick, “and you want to bring them back, it may be in your best interest to apply for the [Paycheck Protection Program], not close the loan until May or June, and then rehire them for that eight-week period to take advantage, full advantage of that eight-week period.”
Workers who are hired as independent contractors do not count under the program.
Local business owner Sean Gallagher said he normally hires international employees on J1 visas, who likely won’t be coming this year.
Gallagher wondered how he could find funding to hire locally instead.
“Typically you don’t hire until you have money to hire people because you can’t pay them,” he said. “I’m trying to figure out where in these programs that fits.”
In that situation, Fitzpatrick suggested, the Economic Injury Disaster Loans of up to $10,000 could be a good fit.
“You could be eligible for funding to pay for them once you know what the timeline is.”
Once approved for that loan, he added, “You have the six months before you actually have to commit to taking it.”
“If you can hire locally,” Byers added, “then you can use the [Paycheck Protection Program] to pay for them.”
But ultimately, Fitzpatrick conceded, things are changing rapidly and no one has the perfect answers. “That’s the crystal ball call.”
For information on help for small businesses, visit the city’s website, ellsworthmaine.gov, the Ellsworth Area Chamber of Commerce, ellsworthchamber.org, or the U.S. Small Business Administration at sba.gov. To view last week’s Heart of Ellsworth meeting or access video notes, visit heartofellsworth.org. Meetings will be held weekly on Friday at noon via Zoom; email Executive Director Cara Romano at [email protected] for more information.