MANSFIELD -- A number of local businesses are staying afloat, and paying their employees, thanks to the Paycheck Protection Program.
The program, part of the federal relief package in response to the COVID-19 pandemic, provides loans to businesses to help cover payroll costs, rent, mortgage interest, rent and/or utility costs for an eight-week period.
The loans, processed through financial institutions, will be forgiven if the business spends 100 percent of the funds on payroll, mortgage interest, rent, and utilities in the eight weeks after receiving the loan. Also, at least 75 percent of the funds must be spent on payroll.
The PPP was part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act approved in March. Money in the paycheck protection program quickly ran out and additional funds for the program were approved last week.
"It was $346 billion, and it was gone in two weeks," said Jodie Perry president of the Richland Area Chamber of Commerce.
She said several local businesses received money, but couldn't disclose which ones participated.
"Our local banks really processed a lot of businesses," Perry said. "Certainly a lot of businesses received them, but definitely not all of them."
Mechanics Bank Vice President Phil McClenanthan said there was great demand for the loans.
"There was simply not enough initial funding to meet the need of all the businesses negatively impacted by the pandemic," he said.
"Leading up to the opening of the second round, we have been preparing loan applications for submission. We have increased the number of people submitting applications to work through our back-log as quickly as possible, McClenathan said.
"We were already making adjustments to our process daily, so it’s not necessarily that we will be doing things differently, but we have the advantage of more time to prepare for this second round.
"Congress did set aside a specific amount of funding for banks our size, but the expectation is that the funds will run out quickly. Mechanics is working diligently to help our customers and community to the very best of our ability," McClenathan said.
Local businesses who received funds in the initial wave of the PPP viewed it as a lifeline.
"It's why we are re-opened," said Paul Kemerling, owner of Relax it's Just Coffee in downtown Mansfield. "We were allowed to stay open, but with all of the hysteria, people weren't coming out and it didn't make sense for us to leave the lights on.
"With the payment protection program, I was able to get my employees back to work and off unemployment," he said.
Relax has 13 employees. Blackbird Bakery, an independent business inside the coffee shop's building at 105 N. Main St. has four. Both businesses got PPP money based on the number of their employees.
Ethan Chapman, a baker at Blackbird, said he was excited to get back to work.
"It's great because I can earn money to pay off the rest of the school year at Ohio State University-Mansfield," he said. "I kind of missed everyone and it's nice to have a reason to get up in the morning and be able to leave the house."
The paycheck protection plan lasts for eight weeks.
Kemerling said he will begin by having his coffee shop open for half-days, 7 a.m. to 1 p.m. If business ramps up, he will return to regular hours during the eight weeks of PPP loans.
"We worked through Mechanics Bank," Kemerling said. "I think the rules changed two or three times because they were making the rules as they went. It was written on the fly.
"With the paycheck program, I was able to get people back to work and off unemployment," he said. "It worked for us, I know some folks were shut out. I know there's been criticism of larger companies getting money, but larger companies employ local people.
"I don't have a problem with large private companies getting the money because they have to follow the guidelines, too."