By Brice Wallace
In mid-March, “everything started crashing down” for Ernesto Garibay, owner of Hacienda Mexican Grill and La Hacienda, as the restaurants were among many Utah businesses forced to close its doors due to COVID-19.
In a week’s time, revenue shrunk to 20 percent of normal.
About a month ago, Garibay’s outlook improved, thanks to the Paycheck Protection Program, a loan program that is part of the federal government response to the virus.
“This PPP plan, honestly, it saved us and I’m sure it saved a lot of other businesses out there,” Garibay said recently during a news conference about the program helping offset the virus’ impacts. “Once we saw this money in the bank account, it was like a big boulder lifted off your shoulders.”
While Garibay acknowledged that the restaurants would have survived without the PPP funding, “it would have messed us up, big-time” to not have it. The funding allowed the company to pay its employees and bring back aboard many of the 50 that were furloughed from Garibay’s three restaurant locations. While revenue remains low — only about 25 percent of normal — the PPP loan allowed Garibay to stay positive about the restaurants’ situation.
“We’re going to be here a long time, but this PPP plan helped out a lot,” he said. “It helped us a lot and I hope it helped out the other small businesses a lot, and I hope you guys are able to get that money, get those funds, because that money is available to all of us and you shouldn’t be shy if you go out and try and get it.”
The employees at Garibay’s restaurants were not the only ones to benefit from the PPP. Zions Bank estimates that 350,000 Utah jobs — more than one-fifth of the state’s workforce — have been saved as a result of the program. Three of five small-business jobs in Utah were saved because of PPP loans, according to Robert Spendlove, senior economist for the bank.
Zions has handled about one-fourth of all PPP loans in Utah, saving more than 143,000 jobs in the state, he said. Industries benefiting the most have been construction, healthcare, food service and manufacturing.
As of May 8, Utah led the nation in PPP loans, with nearly $5.3 billion, on top of more than $246 million in Economic Injury Disaster loans. About 63 percent of Utah small businesses received PPP loans, according to the American Bankers Association.
That has helped counter COVID-19’s impacts. The virus contributed to Utah’s employment contracting 7.1 percent — or 110,900 jobs — from April 2019 to April 2020. The state’s unemployment rate rose to 9.7 percent in April. The more than 155,000 people unemployed represented the highest number ever.
Among industries with large year-over-year job shrinkage has been leisure/hospitality, with 43.6 percent, or 66,700 jobs. The arts, entertainment and tourism subsector contracted 68.8 percent, from about 25,600 jobs to 8,000 today.
Among the hardest-hit counties are Garfield, with 19.4 percent fewer jobs than a year earlier; Grand, 18.6 percent; Summit 18.3 percent; and Kane 17.4 percent.
For comparison, the U.S. unemployment rate in April was 14.7 percent.
“As bad as the job market is right now, and it really is truly bad, Utah has performed very well, relative to other states in the country,” Spendlove said, noting that federal Bureau of Labor Statistics data indicated that Utah’s contraction is the smallest in the nation.
“This means that Utah’s job market is still be the best in the country, even though it’s contracting,” he said, adding that Utah’s unemployment rate is the sixth-lowest in the country.
Spendlove described Utah’s small-business owners and financial institutions providing the PPP loans as “heroes” during the pandemic. Another hero, he said, is the Utah Department of Workforce Services. Between March 15 and May 16, 184,000 Utahns filed for unemployment benefits, nearly matching the 195,000 total during the prior three years combined.
As for Garibay, he’s hoping the PPP loan, which lifted his spirits, will help lift the restaurants’ fortunes.
“This year, I don’t see us getting back to normal, but we’re going to stay positive,” he said. “It’s going to be a while to get back to normal.”
