“The loan helped offset all that red ink we generated during the down months and allowed us to survive.”
— Kyle Ranson, Showers Pass
In late March, as the full scope of the Covid-19 pandemic became clear and a shutdown took everyone off the streets, things looked grim for Portland’s beloved bike shops and other bike-related businesses and nonprofits.
Months before the bike boom would kick in and allay our concerns, owners of local bike companies lined up for federal Covid-19 relief loans to help make payroll, buy equipment to adapt to the new ways of doing business, and hopefully keep their doors open. We now have a clearer picture of who received what when it comes to the Small Business Associations two biggest bailout sources: the Paycheck Protection Program and Economic Injury Disaster Loans.
After demands for transparency from media and other groups, the SBA just released a new search tool that has the loan amounts for 5.16 million recipients of the nearly $523 billion that was handed out. I searched for local bike companies and came up with a list of 42 Portland-based businesses that borrowed a total of $4,801,323 (if you know of any I missed, please let me know so the list is as complete as possible).
I split the recipients into four categories: bike shop, nonprofit, products/services and manufacturing/builder. Below are the total loans and amounts for each category:
- Bike shop: 24 loans – $2,687,535
- Manufacturing/builder: 5 loans – $993,686
- Nonprofit: 5 loans – $463,279
- Products/Services: 8 loans – $709,723
The sizes and terms of the loans vary. Data in this story includes PPP and EIDL funds. If companies are able to prove jobs were saved, they won’t have to pay back the loans. For loans that are not forgivable, they come with low interest rates and a 30-year term.
There was a wide range of loans to bike shops: Seven loans were for over $100,000; seven were between $20,000 and $62,000; and 10 were below $18,000. Bike Gallery, a chain with six stores in the region and three in Portland, received $714,738. Velotech Inc., an e-commerce company that operates BikeTiresDirect.com, WesternBikeworks.com and other websites received $506,000. On the other end of the spectrum was Metropolis Cycle Repair in north Portland that received just $6,000.
Component maker King Cycle Group (Chris King Precision Components) received $717,900, the largest loan of any local bike company. Their application said the loan supported at least 70 jobs.
Bike-related nonprofits also got into the act. The Community Cycling Center received $271,000, The Street Trust nabbed $134,371 and the Oregon Bicycle Racing Association (OBRA) received $29,703. OBRA was hit particularly hard by the virus since the racing season had only a few events. (Note: I put the nonprofit Community Cycling Center into the bike shop category because they run a retail store as well.)
“Everyone has still had to make sacrifices, but it is a whole lot more bearable because of the loan.”
— Jonnie Ling, Community Cycling Center
Joe Bike owner Joe Doebele said his $50,500 loan helped him pay for personal protective equipment (PPE), an air purifier, and other gear needed to operate outdoors. “Since we stopped allowing customers in the store in March, it helped us restructure our service and sales floors both to better space out our employees and to better serve customers outside,” he shared in an email today. “It had both short- and longer-term benefits, and those benefits are ongoing,” Doebele added.
Showers Pass CEO Kyle Ranson said he used every penny of their $342,300 loan to pay staff. “When our revenue evaporated we made the decision to not lay anybody off, hoping things would pick up again in the fourth quarter,” he shared in an interview today. “The PPP loan helped offset all that red ink we generated during the down months and allowed us to survive.”
With all their summer camps called off and a big drop in retail shop revenue, Community Cycling Center Interim Executive Director Jonnie Ling told me this afternoon their PPP loan, “Felt like our last hope to prevent significant layoffs.” The CCC pivoted to food delivery in April and has been able to keep all staff on board. “Everyone has still had to make sacrifices,” Ling said, “But it is a whole lot more bearable because of the loan.”
OBRA Executive Director Chuck Kenlan said the loan has helped put them in a “strong financial position entering 2021.” While OBRA’s loan has already been forgiven, Ling with the CCC says their forgiveness process is just getting started. “We’re hoping that goes off without a hitch,” Ling shared.
The bike industry in general has had a wild year (to put it mildly). While “bike boom” splashes across headlines and news reports, inventory is still hard to come by. Shops are banking on service and repairs while they wait for complete bike shipments and build up every frame in sight to meet demand. Bicycle Retailer & Industry News reported an increase of 19% in bike imports so far this year compared to 2019.
While it looks like a massive hit to our local bike economy will be avoided thanks in large part to these loans, the impacts of Covid-19 will be felt for a very long time. Ling at the CCC says he hopes the loan program is renewed in 2021. “There is still a lot of uncertainty.”
Here’s the full list:
— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and firstname.lastname@example.org
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