$1.6B in loans flow into region
Federal Paycheck Program helps organizations to retain staff, continue operations during pandemic
Had it not been for the federal government’s Paycheck Protection Program, Bill Gettman isn’t sure exactly how well Northern Rivers would have weathered the coronavirus pandemic.
Don’t get him wrong. Northern Rivers, the sprawling Albany-based human services nonprofit that touches the lives of
18,000 children and adults both here and across the state, was never going to shut its doors or turn people away during the worst public health crisis in a century.
If anything, Northern Rivers’ network of schools, residential programs, health centers and crisis counselors was needed more than ever as COVID-19 has permeated every aspect of life over the past 12 months.
The PPP, which Congress created last April as part of its initial $2 trillion COVID relief package, was designed to help employers bridge the pandemic shutdowns that were ravaging the economy, allowing them to keep paying staff instead of resorting to layoffs.
The low-interest loans are obtained from traditional banks but are paid off by the U.S. Small Business Administration as long as 60 percent of the funding is used for payroll costs.
Northern Rivers was able to get three PPP loans in April for itself and two affiliated agencies that totaled nearly $13 million.
That’s just a tiny portion of the nearly $1.6 billion in PPP loans that have been approved in the Capital Region over the past 11 months, according to a review of SBA data by the Times Union.
But to Gettman, the relatively small slice of relief funding that Northern Rivers obtained was a very big deal. Its various entities employ 1,400 people.
“It was vital to us,” Gettman said. “Without it, it would have been a struggle.”
The loan money not only allowed Northern Rivers to maintain staffing levels in the face of declining revenues as referrals fell and some clients canceled appointments
in the early days of the pandemic. It also allowed the agency to provide its front-line workers with so-called hazard pay to compensate them for the added risk of coming to work each day during a pandemic.
“It allowed us to do the right thing,” Gettman added.
And the loan money also helped to offset some of the substantial cost of having to purchase personal protective equipment and cleaning supplies required to be
able to operate safely during the pandemic — much of which was difficult to obtain in the early stages of the crisis.
Gettman estimates the cost of these supplies at half a million dollars, an unexpected hit to the organization’s budget at a time when its finances were headed in the wrong direction.
“We lost significant revenue,” Gettman said.
Northern Rivers wasn’t alone in its struggle or its participation in the PPP program, although it appears to have been one of the top local borrowers through the PPP, according to the Times Union analysis.
The other top borrowers were Community Care Physicians in Latham, one of the largest doctor networks in the region with 420 providers, which received a $10 million PPP loan from Keybank as well.
Two other local companies, Mohawk Fine Papers in Cohoes and D.A. Collins, the Wilton construction firm, each received $10 million PPP loans as well, the maximum amount allowed under the
PPP, which has resulted in $662 billion in emergency lending, about $152 billion of which has been forgiven.
Alexis Musto, director of marketing and communications for Community
Care Physicians, said the PPP loan the company obtained in late April of last year allowed it to keep its most critical staff working at a time when its revenues were in substantial decline and it was forced to furlough less critical staff that have since returned.
The revenue decline was due to a number of factors out of its control, including a reluctance by patients to come into the office out of fear of catching the virus as well as government social distancing guidelines that forced a reduction of the number of appointments it could schedule.
Elective procedures were also put on hold, per government policies designed to free up hospital beds for COVID patients.
“These funds allowed us to continue to operate, maintain our critical staff, and provide necessary patient care throughout this pandemic,” Musto said.
The flexibility provided by the loan also allowed Community Care Physicians to open up the first non-hospital COVID testing operation in the region at its Latham office park that has since expanded to other locations.
“We’ve been able to sustain this testing operation for nearly a year now,” Musto added.
The Albany architecture firm EYP, which has its main office at SUNY Polytechnic Institute on Fuller decided to return the $7.8 million PPP loan it got through Keybank in April 2020 when so much uncertainty was swirling around.
“As the program evolved, we felt the PPP criteria were better suited for smaller businesses,” EYP’S interim CEO Kefalari Mason said.
“We did commit to staff that we would make no reductions to our workforce during the time covered by the PPP loan, despite returning it.”
During those first few months of the pandemic, layoffs and furloughs by local companies, especially those in the restaurant and retail shopping segments, were commonplace.
And between December 2019 and December 2020, the number of people working in the Capital Region fell by nearly 50,000.
But the job losses and layoffs might have been much, much worse had it not been for the PPP, according to the Times Union analysis, which looked at loans obtained in Albany, Rensselaer, Saratoga and Schenectady counties.
The analysis found that 13,641 loans totaling $1,56 billion helped support payroll for 166,519 jobs, about 40 percent of the total number of people employed in those four counties.
Keybank, which gave out $8.1 billion in PPP loans nationwide, played a similar role locally in helping to stem the economic destruction of the pandemic.
“While we cannot speculate on the exact impact that would have occurred had businesses and employees not received access to this critical funding, we can assume that some businesses may have had to close or employees would have lost their jobs,” Keybank spokesman Jefff Kew
“We are proud to have supported businesses in our communities during this uncertain time.”
One surprising discovery of the Times Union analysis was that only two local private higher education institutions — Albany Law School and Maria College — obtained PPP loans.
It is unclear why no other local schools sought PPP loans, although one local college that has had to reduce programming during the past 12 months said they did not qualify.
Albany Law was approved for a $2 million loan in May 2020.
“The loan allowed Albany Law School to partially defray some of the costs created by the pandemic,” Albany Law spokesman Tom Torello said. “Throughout this past year, we have maintained our staffing, addressed technology and public health needs, and continued to deliver an excellent legal education.”
The money also allowed the school to keep open The Justice Center, its free legal services clinic.
Cathleen F. Crowley and Emilie Munson contributed to this report.