Construction Deemed Essential; Why So Many PPP Loans?
Date Posted: July 23, 2020
Posted In: COVID-19 Updates, News,
From St. Louis Business Journal: Brinkmann Constructors had hit its stride in the past decade.
Market diversification and repeat clients helped generate a $5 billion portfolio, transforming the Chesterfield company into one of the biggest general contractors in the St. Louis region with $500 million in annual revenue.
But in a matter of days, thanks to Covid-19, Brinkmann Constructors faced a loss of $150 million in revenue when authorities in Michigan and Pennsylvania shut down construction, impacting three major Brinkmann projects and 50 employees in particular, President Brian Satterthwaite said.
It’s why the company sought a Paycheck Protection Program loan, ultimately receiving approval of one of $5 million or more.
“Because of the uncertainty of future state restrictions on the construction industry and 45 other active construction projects in several different locations, the Paycheck Protection Program loan was vital, allowing us to protect not only these workers, but an additional 240 Brinkmann employees,” Satterthwaite told the Business Journal in an email.
It was quite a different environment locally, where officials classified construction as an essential service that allowed contractors and other related companies to keep working during the Covid-19 pandemic.
Even still, a Business Journal review of PPP data released by the SBA showed that dozens of St. Louis-area construction and construction-related firms obtained approval for PPP loans, accounting for 12% of all local recipients.
The $649 billion PPP program, designed to help companies cover payroll and other key expenses during the pandemic, has been one of the federal government’s main Covid-19 relief tools for business. Nearly 6,000 companies or organizations in the St. Louis area were approved for PPP loans of $150,000 or more, according to the data.