Nearly $ 1 billion went directly to businesses in Kern County this year as part of the Paycheck Protection Program intended to keep small businesses afloat amid the economic fallout from the pandemic, data shows federal laws released earlier this month.
The massive federal aid program has provided more than $ 500 billion in forgivable loans to business enterprises across the country for losses suffered by the pandemic, with the majority of the funds to be used to continue paying employees.
A total of $ 900 million was made to Kern companies by the Small Business Administration in the form of 7,133 loans, according to an analysis of data by The Californian. The analysis looked at data from the 50 postal codes in Kern County and looked at loans ranging from $ 200 million to $ 10 million.
The top 25% of total loans, or $ 225 million, went to about 80 local businesses and ranged from $ 1.6 million to $ 10 million, with an average loan size of $ 2.8 million. , while the bottom 25% of total loans went to 3,254 recipients, ranging from $ 200 to $ 190,000, with an average loan amount of around $ 70,000.
“I can’t say enough good things about the program,” said Kelly Bearden, director of the Small Business Development Center at Cal State Bakersfield, which since March has been hosting webinars and helping local businesses apply for funds. “Withdrawing that kind of money in such a short time saved a lot of trouble.”
Bearden noted that the National Federation of Independent Businesses, the largest association of small businesses in the country, found in a survey that 80% of its members had received P3 funding. Bearden believes the numbers are similar to Kern.
Under the Paycheck Protection Program rules, employers were required to use at least 60% of the money for payroll and the rest could be spent on rent, mortgage, or other overhead. As a general rule, any loan less than $ 2 million will be canceled in good faith, according to the most recent rules of the program.
WHO RECEIVED MONEY
The largest loan to Kern – for $ 10 million, the maximum loan amount – went to Diversified Utility Services, an electric utility construction contractor. Unicorn Road in north Bakersfield did not say how many employees it has.
HF Cox Inc., an oil carrier with 324 employees, was the second largest recipient of loans, receiving about $ 8 million. Golden Empire Mortgage, which received $ 6.4 million, and Heart Hospital of Bakersfield (the name in the data), which received $ 5.5 million, were also among the top recipients.
Overall, companies in medicine and healthcare, agriculture, and oil and gas received the bulk of the funds, according to the Californian’s analysis.
Farming, farming and farm labor companies received a combined $ 110 million and companies involved in extracting, refining and related oil and gas services received $ 56 million. However, no major oil company – like Chevron, Aera, and California Resources Corp. – did not appear in Kern or State data.
About $ 72 million has been distributed to medical and health care companies, ranging from small local hospitals to doctors’ offices, laboratories, optometrists, chiropractors and home health services. The biggest recipients were Hall Ambulance; Bakersfield Heart Hospital; Kern Valley Healthcare District, which operates a hospital near Lake Isabella; Good Samaritan Hospital in Oildale; and Dr. Ravi Patel, an oncologist who owns the Comprehensive Blood and Cancer Center. Terrio Physical Therapy, Hoffmann Hospice, and a company that owns Accelerated Urgent Care were also among the top recipients of medical care, receiving loans between $ 1.5 million and $ 2 million each.
Another major healthcare recipient, receiving $ 1.6 million, was the Kingston Healthcare Center, a 180-bed Bakersfield nursing home with a COVID-19 outbreak so severe the state had to send. a strike team to help with care; 100 residents have fallen ill with COVID-19 and 19 have died.
Neither Dignity Health nor Adventist Health, which together operate six hospitals in Kern, appear in the data, but both companies are headquartered outside of Kern.
Dental offices collectively received around $ 14 million, while the oil and gas and allied industries received around $ 40 million.
Among restaurants and food establishments, 432 loans were made for a combined amount of $ 40 million, with a median loan amount of approximately $ 44,000. The largest of these loans went to groups that operate fast food chains. For example, $ 1.9 million went to Wendy’s of the Pacific, which operates a number of Wendy’s fast food restaurants. Among the full-service restaurants, La Costa Mariscos, The BLVD and Lengthwise Brewing have received between $ 500,000 and $ 900,000 in loans.
Beauty salons received $ 1.3 million, nail salons $ 600,000 and hair salons $ 87,000, according to the data.
Eleven private or charter schools also secured P3 funding, with the largest loan from that $ 4 million group going to Blue Ridge Academy in the small town of Maricopa, which describes itself on its website as a public charter school with no tuition for K- 12 students in Los Angeles, Ventura and Kern counties. Bakersfield Christian High School received a loan of $ 700,000, the second highest loan to a private school.
Landscaping companies received $ 31 million, the data showed.
CERTAIN COMPANIES EXCLUDED
Not all businesses were eligible for funding. In particular, “sin” industries such as strip clubs and gambling have been banned from receiving loans as well as businesses that primarily engage in lobbying and political work. Several Michigan strip clubs, as well as the American Association of Political Consultants, have filed lawsuits contesting their inability to access funds. However, none of the legal challenges prevailed.
Still, Western Pacific Research, a local Republican political consultancy whose clients include Reps Kevin McCarthy and Devin Nunes, received a $ 30,000 PPP loan. The same goes for Yankee Communications, a local company whose website says it helps its “clients influence the decisions of elected officials and government officials at all levels.”
Asked about the loan, Cathy Abernathy, president of Western Pacific Research, said her company was also doing non-political work and the money was used to make up for problems in that work.
“Western Pacific Research has been a client’s professional testing site for seven years for people to take the tests required to start or continue their employment,” Abernathy said in an email response. “During the spring and summer we had to extend our hours per day and per week to accommodate the testers, staying open 7 days a week, 10 to 12 hours a day for our client.” Abernathy said the tests were aimed at essential workers, including paramedics, x-ray technicians, respiratory therapists and teachers.
Jimmy Yee, owner of Yankee Communications, who received a $ 50,000 loan and listed four employees in his P3 application, said he had not campaigned for 15 years and is now mainly involved in business-to-business consulting. He said his clients include Grimmway Farms, Hard Rock Cafe, which continues to develop a casino south of Bakersfield, and Dignity Health.
“Like other companies, we have been affected. Some customers have pulled out,” he said, adding that the money had been used to cover the payroll of the company’s four employees.
In addition to the federal paycheck protection program, Kern County and Bakersfield have used the federal stimulus funds they received to set up their own small business loan programs. Kern Recovers, the county-administered program, provided $ 25 million in aid, while the city allocated $ 5 million for grants under its B-CARES program.
MORE PPP IN PROGRESS
McCarthy and House Republicans held a press conference on Thursday calling for immediate action to expand the paycheck protection program.
“More than 87,000 California businesses have received a PPP loan to help keep their businesses afloat and their employees paid during the most crushing economic crisis in modern history,” McCarthy said in an emailed statement Friday. “That was months ago. As it stands, there is currently $ 138 billion available for the PPP – Congress just needs to release it, and should release it immediately to get it. ensure American families get the support they deserve this holiday season. ”
Bearden, of the Cal State Bakersfield Small Business Development Center, said he expects Congress to finalize the next P3 cycle by the end of January. He predicts that it will be different from the first round in that the loans will be targeted at particular industries and that the companies will have to demonstrate a significant loss of revenue.