(Photo: J. Maus/BikePortland)
Local bike businesses were among the hundreds of thousands of U.S. companies that asked the federal government for assistance to weather the coronavirus storm.
Data released from the Small Business Administration last week revealed that at least four Portland bike shops and two other bike-related businesses received loans through the Paycheck Protection Program (PPP).
Here’s the list (company name, loan amount, number of jobs retained (if available)):
Fat Tire Farm
$150,000-350,000
14 jobsBike Gallery
$350,000-1 millionRiver City Bicycles
54 jobs
$350,000-1 million
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King Cycle Group
$350,000-1 million
70 jobsShowers Pass
$150,000-350,000VeloTech Inc.
350,000-1 million
39
River City Bicycles owner Dave Guettler said he used the money to increase employee wages and save for the future. “Business has been crazy,” Guettler shared with us via email. “Especially considering the showrooms are still closed. We are selling as many bikes as we can get, but selection is pretty limited. We are fine-tuning our parking lot delivery processes, and trying to figure out how and when we can re-open the stores.”
According to Bicycle Retailer and Industry News, these local companies were part of an estimated $40 million that was pumped into the bike industry. In total the Trump Administration worked through banks to issue about $660 billion in low-interest loans to companies and nonprofits. The loans are forgivable if companies meet certain conditions regarding hiring and employee salary levels.
See if your other favorite bike companies received loans by searching the database via Propublica.
— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and jonathan@bikeportland.org
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A little bit frustrating to see only the biggest names in PDXs bike community received funds. I was really hoping to see some of the smaller shops listed
Small shops were mostly denied for various reasons due to the criteria of the loans, number of employees was a big one.
small shops missed out b/c of “number of employees”? i know a number of small outfits who got PPP loans who have 0-6 employees. genuinely curious why smaller shops missed out … but it wasn’t couldn’t have been b/c of small # of employees.
I think there is also a misperception about what the press is reporting. They are not even looking at small companies b\c they story is around those bigger companies that are likely to have reserves on hand. We had no problem getting a PPP loan and don’t show up on the propublica database because we are just under their $150k threshold.
One reason why smaller shops might have had trouble could be because their bank decided not to approach them\guide them through the process. This was a design flaw with the program. I know of cases where small companies bankers wouldn’t return their requests for help because they didn’t consider them a priority and they got loans by approaching other banks that helped them out as a way to earn a new client.
Might be worth considering that many of the people who own and run smaller shops got their start at the “biggest names”… So the health of these big shops is super important to our community in my opinion and I’m glad to see them get these loans!
maybe because theres literally no where else to work, most of the business getting sucked up by a company that is majority-owned by Trek Superstore
They might also have the biggest chance of surviving.
Worth noting that the ProPublica tool only shows companies that asked for a minimum of 150k, right?
From everything I’ve read every bike shop in the area was pretty much selling any bike they had and swamped with repair business. What did they need relief funds for? There are plenty of businesses that were completely shut down.
It does raise the question whether an essential business needed assistance, assuming they were still conducting business.
Hi Jon, That’s a very short sighted view and the question is better for congress than the businesses that took advantage of this loan. I work at a small nonprofit that decided to take a PPP loan. Our thinking was while we didn’t experience an immediate contraction in revenues, we were concerned what the long term financial outlook for us might look like. We also didn’t know whether Congress would offer multiple rounds of this loan. Therefore, passing on it meant we might have to lay someone off in say December. As an applicant we have no control over other businesses that applied and didn’t get it or decided not to apply. All we could control is working with our bank to secure the loan and use it for its intended purpose.
I guess my position is that if you don’t need the help you should not be taking the money when there are a lot of businesses and people that are in real need. There is not an infinite amount of money. Each dollar taken by someone that did not really need it is a dollar less for people that do need it. It is a lot like hoarding and is basically selfish.
I don’t disagree with the need to design features to increase the odds of firms in immediate need, but that’s a job for policymakers to impose on the banks they tasked with disbursing the loans so your critique is mis-placed by saying that’s the job of the organizations that applied for the loan. That’s what elected officials and gov’t agencies are here for. It’s harsh to say its hoarding when this loan helps to avoid layoffs down the line.
I think you mean maybe layoffs at some undetermined later date versus layoff right now. I’m in fine financial shape now but I might not be in December so maybe I should get as much food from the food bank now and keep it in case something happens to me later. I know some people really need the food now but I might need it later so tough luck for them. Am I being selfish or just using forward thinking? I guess there is no community, it is just get what I can now and tough luck for anyone else.
bet Stages Cycling (Foundation Fitness) also got a loan
Smaller businesses might have received a PPP loan, but Propublica does not appear to list anything below $100k (even though that column says $150k and less)
I am one of them and know many other businesses that aren’t listed.
There are a lot of reasons a business applied for a PPP loan. Back when this program was announced everyone was in absolute shock and chaos at what would happen. I talked with other small business owners daily and it was a sense of “we are screwed and the end is near.”
No one knew how anything would play out and we still don’t. There is a long road ahead and the more people we can safely keep working and on health insurance the better.
I am thrilled that bike sales and service are skyrocketing. Now how can we keep all these new riders?