On March 27, the U.S. Congress passed the CARES Act into law in an effort to counteract the economic impact of the spread of COVID-19. This legislation includes $350 billion slated to help small businesses keep their employees paid while they are closing their doors to help slow the spread of the pandemic. The program to distribute relief funds to small businesses is named the “Paycheck Protection Program” (PPP for short), and is to be administered by the Small Business Administration.
The promise of the PPP program is that these funds are made available quickly through a wide range of lenders, and that any of the funds used for payroll, rent, or utilities, are forgiven, so long as certain conditions are met.
As I examined the details of the program, it quickly became clear that it would benefit Xanadu Gallery and its employees, and that I should apply. I read about the application process and gathered documents in preparation for applying on Friday, April 3, the first available time to apply.
It was only when I reached out to my bank that I discovered things might not be as simple as promised. We bank with a small, regional bank, and my banker was uncertain the bank was going to be ready to process the PPP applications when the program came on line.
I knew it was imperative I apply early since the funds are available on a first-come-first-serve basis. Once the $350 billion is allocated to applicants, no further funds are committed to help small businesses who aren’t lucky enough to have their applications accepted.
Sure enough, April 3 arrived and our bank wasn’t ready to accept applications, nor did it have a timeline for when it might be prepared. This was a problem because despite the fact that some bigger banks were ready to accept applications as the program began, they were limiting applications to those businesses who already have a business relationship with the bank.
Thus began a multi-day scramble to find a bank that would accept our application. By Tuesday, April 7th, I found that online funding services Kabbage.com and Lendio.com were accepting applications. These services, however, don’t actually fund the loans themselves; instead, they package the application and wait for small banks to accept and process the loans.
I went ahead and completed applications with both services, but at the end of the application process received a generic notice that I would be informed once a bank was found – not very promising.
Throughout this process, our payroll company, Gusto.com, was providing updates on their efforts to provide the payroll history reports that are needed to apply for the loan. They announced they are also working to line up banks to process applications from their customers who weren’t finding it feasible to apply with their own banks.
On Thursday, April 9, Gusto announced they had secured a relationship with their first funding partner and could help process applications through the lender. I submitted an application through this avenue as well, and was informed at the end of the process that I would have a response from the lender within 72 hours. We’ll see!
I’m confident that Xanadu Gallery will weather this current economic storm with or without assistance, but there’s also no doubt that without it our business is facing a significant setback.
We are continuing to make sales, and our March sales ended up being off by only a small percentage from our sales in March of 2019. April’s prospects aren’t quite so rosy. Our sales over the first 10 days of the month are off by over 68% from last year, and will certainly be dramatically curtailed as long as we remain closed, and beyond as the economy recovers.
I will keep readers of RedDotBlog up to date as we learn about the status of our application for relief.
Artists Should Be Applying for Relief Through the PPP and Other Programs
While the PPP program was announced as relief for small businesses, it’s important to note that included in the relief are self-employed individuals, gig-economy workers, and 1099 contractors. Depending on individual circumstances and the way taxes are filed, artists may be eligible for funds from the PPP program.
I encourage you talk to your bank and/or your accountant to see if you qualify, and if you should apply.
Additionally, I’ve received emails this week from artists alerting me to other grant and relief programs designed specifically for artists.
Special thanks to Tian Cheung for pointing me to this link from the New York Foundation for the Arts, which has resources for available arts related COVID-19 relief grants around the country.
Are You Applying for Relief?
Have you applied for a PPP loan? What has your experience been? Have you applied for or secured other relief? Are you aware of other resources artists or galleries should review when researching relief options? Please share your insights in the comments below.