When non-essential businesses were ordered by San Joaquin County Public Health Services to close their doors on March 23 due to stay-at-home measures to stop the spread of the coronavirus, Habanero Hots owner John DeNigris said he had to furlough half of his nearly 40 employees.
The restaurant’s hours of operation were reduced, and DeNigris adopted curbside takeaway as a method to continue making food for his customers and the Lodi community.
Like many small business owners in the county, DeNigris has worried about finances, including purchasing the food he serves to his customers, and whether or not he would be able to bring his entire staff back once stay-at-home orders are lifted, given that fewer people are eating out during the pandemic.
“It really helped us when (the county) let us (sell) alcohol,” he said. “We were able to make a little bit more and get some business. Everybody here is just doing what we can during this time. My staff has just been dynamite.”
However, once the state and county give the green light for all businesses to reopen, DeNigris said he is financially ready to bring all his staff back to the decades-old establishment, thanks to Farmers & Merchants Bank’s participation in the Paycheck Protection Loan Program.
On March 27, the Coronavirus Aid, Relief and Economic Security Act was signed into law, creating a loan program through the Small Business Administration to help small businesses retain employees and pay for expenses during the COVID-19 pandemic.
The Paycheck Protection Loan Program will provide as much as $349 billion of federally-guaranteed loans for small businesses.
The program was made available to small businesses, nonprofits, accommodations, businesses with less than 500 employees, as well as self-employed, sole proprietors, freelance and gig economy workers.
Those who apply for the loans must have been operating before Feb. 15.
Through the program, F&M Bank received $334 million in funding to loan to 1,376 small businesses and nonprofits throughout the Central Valley.
DeNigris said he called the bank and applied for the loan the very first day it was made available to small businesses, and within a week he was told he had been approved.
Shelby Young, executive director of Lodi House, also applied for a loan on the first day possible and received word of her award about a week later.
She said her loan will be used to bring back eight staff members who work at its thrift store at 221 Lodi Ave., who will be working from home.
“What we’ve done is give them boxes of stuff to go through inventory and put prices on things,” she said. “That way, when we are allowed to open back up, everything will be ready to be placed in the store.”
In addition, staffers are reaching out to some 40 volunteers to see if they need anything or simply how they are doing.
Obtaining the loan was not only about re-hiring employees, Young said, but being able to begin re-serving the community. Purchases made at the thrift store allow Lodi House to provide services to underprivileged women and children.
Young said providing services to clients will also help them re-enter the workforce.
“We’re so grateful to F&M Bank,” she said. “It’s moments like this that Lodi House is reminded of how important a gift is, when a community bank and people continue to support others in hard times. That’s what Lodi House does for women and children. We give a hand-up, and now we’re being given a hand-up.”
Kent Steinwert, president and chief executive officer of the bank, said some 100,000 jobs were going to be saved through the lending program.
Businesses that applied for the loans included tailors, salons, health clubs, medical offices and restaurants, among others he said. Nonprofits like the Child Abuse Prevention Council and United Way of San Joaquin County in Stockton also applied, he said.
Loan amounts awarded were as small as $508 and some reached into the millions, Steinwert said.
“This meant saving jobs and businesses, not just here in the county, but across the country,” he said. “There was a moral obligation that all of us felt at F&M Bank, as well as other banks, to put our heart and soul into this and make the program work.”
Steinwert said $33 billion in funding was awarded to California Banks, and F&M conducted about 1% of the loan activity.
Out of 6,000 national banks, F&M used its own capital and liquidity to fulfill funding that represented almost 10% of its total assets.
“Our staff worked 14 straight days on preparing documents and approving loans for these businesses,” he said. “Out of our 428 employees, 90 of them came together and worked on this. This was three or four times our normal volume of loans, and everybody did a great job.”
With a potential second round of loans being considered in Washington, D.C., Steinwert said the bank has another 200 loan applications to review, but it is unclear whether it will participate.
Steinwert said the U.S. Department of the Treasury designed a great program to help the economy restart and put residents back to work once the virus is stopped.
“When we reopen the economy, these businesses won’t have to spend time hiring and training new employees to get business back to normal,” he said.
DeNigris said he has been a member of F&M Bank for years, and said the institution has always been there for its customers. He applauded the company for helping not only his business, but the community.
“F&M really stepped up,” DeNigris said. “They were really there for the small businesses around here. They put in long hours, worked nights and weekends to help all of us out. When we were in need and this whole thing happened, they were there for us.”