Many small businesses in Lexington are still waiting for relief

It’s extremely rare that Crossings, a bar in downtown Lexington, closes its doors to the public. It’s open seven days a week, including Christmas, Thanksgiving, and Easter. When the bar closed for a staff party on a Monday last year, it was the first time it had closed in years, owner Rebecca Richter said.

Everything is different now. The purpose of a bar is to bring together a crowd and, as crowds have been banned to help stop the spread of the coronavirus, Crossings has been closed since March 15.

It is one of the countless small businesses in Kentucky trying to survive until the pandemic passes.

To help small businesses like Crossings, the federal government initially put $ 349 billion into a small business loan cancellation program called the Paycheck Protection Program. These are 1% interest loans that the federal government will write off as long as 75% of the money is used for payroll and the company does not lay off or reduce the wages of its employees.

In two weeks, this $ 349 billion had been claimed. An additional $ 310 billion was approved last week and began disbursing on Monday.

In Kentucky, 23,797 companies took out loans worth $ 4.1 billion in the first round. While there is no list of companies that received loans, Crossings was not one of them. Neither was Able Engineering, a small Lexington-based company with nine employees.

Luther Andal, the co-CEO of Able Engine, was frustrated with the process. He criticized the big banks – his bank is PNC – for not prioritizing real small businesses (the federal government’s definition of a small business varies, but it’s typically businesses with fewer than 500 employees) and help their biggest customers first.

“They were never going to reach us because they didn’t have enough time,” Andal said. “And, frankly, they put us in chains.”

One of the largest companies that received the money was Ramaco Resources, a publicly traded coal company. valued at over $ 100 million which is based in Lexington but has no operating mines in Kentucky. Ramaco received a loan of $ 8.4 million – one of 4,412 companies nationwide to have received a loan greater than $ 5 million until April 16, according to the US Small Business Administration. The mining industry as a whole received 11,618 loans for a total of $ 3.8 billion, according to the same data.

Coal companies were seen as essential businesses by the US Department of Homeland Security since the start of the pandemic, meaning they have not been forced to shut down mining operations.

While some mines temporarily closed in the first weeks of the outbreak, others continued to boom and industry demands for broad federal relief have so far gone unanswered.

Falling energy consumption and manufacturing have placed the already unstable industry on even more fragile footing.

Energy use in the United States fell to its lowest level in 16 years in early April, making the coal that burns in coal-fired power plants less valuable. Demand for metallurgical coal, the type of coal Ramaco produces for use in the steelmaking process, has also fallen.

Crude steel production, industrial manufacturing and light vehicle manufacturing are slowing dramatically due to pandemic, according to the latest market report from the American Institute of Iron and Steel.

In March, the National Mining Association, the coal industry’s main lobby group, called for help from lawmakers. They wanted the federal government to cut fees that help fund the Black Lung Disability Trust Fund, which provides financial assistance and health care to miners with black lung disease, and the Abandoned Mine Lands Fund, which enables States pay for the reclamation of abandoned land. mining sites.

Lawmakers declined their demand, but several black lung organization groups in Kentucky and Virginia, fearing that renewed efforts may no longer be fruitful, write a letter to the leadership of Congress, arguing that a cut in the black lung excise tax could put the fund in jeopardy. It’s already billions of dollars in debt.

Meanwhile, Ramaco found relief elsewhere, in the $ 8.4 million PPP loan.

Other companies that are small by definition but big to the naked eye – the Los Angeles Lakers, Shake Shack, and Ruth’s Chris Steakhouse – pledged to return their money.

Ramaco, who grossed $ 24 million in 2019 and $ 25 million in 2018, did not respond to a request for comment. The company reported having 395 employees end of 2019.

Andal said that the fact that large companies were able to get loans when many small companies were excluded was “a travesty of everything”. He said more of the money should have been earmarked for very small businesses.

“You can’t be fair to everyone,” Andal said. ” I understand. What is not fair to me is that we were not even given the opportunity.

Andal was particularly angry with his bank. He said the online application PNC set up had several issues and sent an email after a week to request more documents. For the next round of loans, he uses a community bank because several of his friends who have used local banks have had their loans processed.

Richter, who uses PNC and said the branch manager she uses has been helpful, remains loyal to the big bank. She received an email saying Crossings is still in the queue and will get the loan when the money is available.

There are 25 people working at Crossings and Richter said she was lucky because most of her inventory wouldn’t go bad (only three barrels already open). She is bleeding about $ 7,000 a month in rent, utilities, and insurance, but said she is doing fine for the time being.

Richter said people have reached out and offered to donate to the bar to help keep it in business (Crossings is a staple in the Lexington LGBTQ community). Instead, the bar raised over $ 1,000 for Mobile party, a charity that brings meals to people living with HIV, by broadcasting live some karaoke and drag shows.

“I’ll be happy if we get the loan,” Richter said. “If that doesn’t happen, we’ll find a solution. ”

Even though the state is starting to plan for a gradual reopening, bars are not among the businesses that will be allowed to open anytime soon. Beshear said Monday they couldn’t open until June at the earliest.

“This is probably one of the companies where the precautions won’t be as effective,” Richter said. “Because the happier and more drunk you are, the less likely you are to pay attention. “

Correction: An earlier version of this article incorrectly stated Luther Andal’s company name. It’s Able Engine.

This story was originally published 29 April 2020 13:02.

Daniel Desrochers has been a political reporter for the Lexington Herald-Leader since 2016. He previously worked for the Charleston Gazette-Mail in Charleston, West Virginia.
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