Car dealers, private schools, restaurants got loans

SBA money helps keep businesses afloat during coronavirus pandemic

It didn’t take South Florida small business owners and their bankers long to realize the painful truth: Amid burgeoning spikes in new COVID-19 cases, billions more in loan money is needed from a Small Business Administration program or some other source to help survive the pandemic.

From Palm Beach to MiamiDade counties, businesses and nonprofit organizations serving a wide spectrum of the region’s economic life got money to keep their operations going and keep people employed this summer.

A list released by the SBA this week showed law and accounting firms, car dealers, restaurants, transportation companies and nonprofits among those that received l o a n s o f mo re t h a n $150,000. The list did not disclose the names of countless other firms that received less than that amount.

But as much as the money was welcomed as a jobs saver, it was a “Band-Aid,” said Tim Holliday, owner of Holliday Cleaners, a two-store dry cleaning business in Fort Lauderdale. He said the money helped him retain all six of his employees and reopen a store he’d closed.

“There’s really nothing out there at this point” in terms of future assistance, he said. “We’ll just have to see how things go through the summer. Now we’ve got another wave and now it looks like we’re moving back to where we started again.”

The loan money, which was lent to businesses employing fewer than 500 people, came via a so-called Payroll Protection Program that was part of a $2.2 trillion federal relief act signed into law by President Trump on March 27. The loan program itself was activated on April 3, and provided eight weeks of assistance that was contingent mainly on the condition that borrowers use the money to keep their payrolls intact. Last week, Trump signed a law extending the program through Aug. 8 in the hopes of distributing an estimated $120 billion in funds that remain unused.

“Sort of tricky, right?” said J.C. de Ona, division president, Southeast Florida, for Centennial Bank. “A majority of our PPP clients were truly small business. I guess with what we’re seeing now — a spike again — people are nervous that we’ll go back to where we were.”

While he doesn’t see that happening, he agrees a new round of money will be required to see the small businesses through.

“There are still a lot of SBA [loan] products out there for small business,” he said. “We’re still actively lending. If there is a program that comes out we would definitely like to participate — especially if we see this lasting longer than we all anticipate.”

Daniel Pische, senior vice president of trade finance at First American Bank, said that even with no new program in immediate sight, his bank is working on a case by case basis to help them after their PPP loan money runs out.

“We’re focused on working with our customers and working on payment relief to make sure they have liquidity and access to working capital for the road ahead with this challenge,” he said.

The SBA loan program served businesses with fewer than 500 employees, including those run by large companies that operate multiple small businesses under their corporate umbrellas. That meant wealthy entrepreneurs and companies with access to many capital sources could apply and receive money.

South Florida recipients included Braman Motors of Miami, owned by billionaire Norman Braman, and Coastal Construction Group, the Miami-Dade-based construction giant.

“At the precipice of this unprecedented public health crisis, I made several difficult decisions to weather an indefinite storm and preserve the viability of the dealerships,” Braman said in a statement distributed to news outlets to explain the assistance his business received, “In early March, I reduced all executive compensation by over 95%, and I eliminated my compensation entirely. In addition, in one of the most sobering decisions I have made as a dealer, I furloughed nearly thirty percent of our workforce–more than 500 people.”

Other auto dealers such as Rick Case, Sawgrass Ford and Schumacher, received loans.

Silver Airways, the Fort Lauderdale-based regional airline, took out a loan after publicly declaring that the futures of both the company and the airline industry were in severe jeopardy.

Another area airline, Southern Airways Express, also received aid through the program.

The Flanigan’s family-run restaurant chain was among many restaurants receiving money.

A number of professional service firms got help. Law firms on the list included Becker & Poliakoff; Berger Singerman; Boies, Schiller Flexner; Cole Scott & Kissane; Kubicki Draper; Gunster; Shutts & Bowen; and Stearns Weaver Miller and Wicker Smith.

Insurers such as People’s Trust Insurance of Deerfield Beach received money.

Private schools such as Cardinal Gibbons, St. Andrews School, St Thomas Aquinas, The Benjamin School and the Hebrew Day School of Broward received loans.

Nonprofits included ARC Broward, which offers services to the disabled, as well as the Jewish Federation of Southern Palm Beaches and the Boys & Girls Clubs in Broward and Palm Beach counties.

Golfing got a lift with loans going to the Boca Pointe Country Club and the Greg Norman Golf Course Design Co. of West Palm Beach.

The news media, too, received assistance as Newsmax of West Palm Beach took out a loan.

The SBA lists, which are arrayed by state, were released under pressure from critics who asserted many companies received money when smaller businesses with a greater need did not.

But Ken Thomas, a longtime banking analyst in South Florida who is now president of Community Development Funds Advisors in Miami, said the program did its job by rescuing businesses that simply ran out of cash after being forced to shut or reduce operations by local and state governments intent on curbing the coronavirus pandemic.

Thomas said the community banks doing business in South Florida did a better job than big national and regional institutions in lending money to small businesses, essentially giving back to the cities and towns they serve. He named City National Bank of Florida, First Horizon and Centennial as leaders in the effort.