The U.S. Small Business Administration has reopened the Paycheck Protection Program (PPP) to new loan applicants, while a recent change amends the rules so that commercial fishermen can receive financial help to cover crew wages.
The June 26 change allows fishermen to count crew members’ wages as payroll costs when applying for the program to help employers pay their bills and make it through the economic hit of the COVID-19 pandemic. Crew members are usually considered self-employed contractors, a designation that would have required them to apply individually for PPP loans.
The revision made applying for the loan worth it, Haines fisherman Norm Hughes said. PPP loans are low interest, with much of the debt forgiven if the money goes toward payroll. However, submitting an application proved difficult for Hughes. At the time the revision was announced, fishermen had just five days before the June 30 deadline, and many were in the middle of fishing.
Hughes said he dropped everything to return to town so he could download federal forms and try to find a bank that was still accepting applications. Unable to find a bank that would handle his application, Hughes missed the deadline.
With more than $100 billion still available in the nationwide program as of late June, congressional action reopened the doors on July 6, with the new application deadline of Aug. 8.
First National Bank of Alaska is once again accepting applications and Hughes said he is working to get his paperwork turned in, but July is a challenging time of year for fishermen.
“In July, we’re fishing every day of the month,” Hughes said, adding the application effort will be worth it if he can secure the loan. The season is off to a slow start, and right now his crew would be making more on unemployment.
United Fishermen of Alaska executive director Frances Leach said it’s great that fishermen are eligible for more money from the program, but even with the extended deadline it will still be difficult for many to apply in time.
“The biggest thing we’re up against is that the fleet is out fishing. It’s hard to let them know,” Leach said. Many lack internet and phone service for weeks on end this time of year.
Leach said it’s been difficult for fishermen to secure COVID-19 economic relief at the state level as well.
Under state law, fishermen can operate with an Alaska Commercial Fisheries Entry Commission-issued permit rather than a business license. The state’s CARES Act-funded grant program for businesses and nonprofits requires applicants to have state business licenses, which Leach estimates fewer than 10% of fishermen have.
Leach said UFA has made Gov. Mike Dunleavy and the Legislature aware of the issue, but the organization has yet to make any headway. She doesn’t understand why. “It seems like a fairly simple change,” Leach said.
Alaska Department of Commerce, Community and Economic Development spokesperson Glenn Hoskinson said the department is waiting on the outcome of a court case filed by Juneau resident Eric Forrer before commenting in detail on the matter. In June, Forrer filed a preliminary injunction to halt the state’s AK CARES business and nonprofit grant program after the department implemented several changes to eligibility requirements with what Forrer called inadequate legislative approval.
Hoskinson said she expects the court will reach a decision by July 13.
On July 6, the Small Business Administration released data on PPP loans during the initial application period. The program issued 71 loans to businesses in Haines out of 11,167 statewide.