Darius Kania had some sleepless nights early this spring.
As the coronavirus pandemic was beginning to rapidly spread in Connecticut, the company he runs with his father — Lynn Welding Co. in Newington — saw a quick and significant drop in revenues, particularly as the aerospace industry took a nosedive amid grounded flights and fearful passengers.
Layoffs were likely for Lynn Welding’s staff of about 70 employees who provide high-precision welding services for the defense and aerospace industries. Kania, who is vice president, said he never had to eliminate someone’s position because there wasn’t enough work for them.
“I lost a lot of sleep figuring out who we had to let go,” Kania told me recently. “All of our teammates are so important, but we had to come up with a plan.”
Months later no one at Lynn Welding has lost their job.
That’s because the company in April got a federal Paycheck Protection Program loan, which allowed Lynn Welding to maintain its entire workforce, despite the drop in sales.
The funding, Kania said, allowed him to stabilize the company during the worst of the downturn. Now orders are picking back up. He’s hopeful no layoffs will be needed once the PPP funding runs out.
“For us that PPP funding preserved jobs,” Kania said. “I’m grateful because the worst thing you can do as a business owner is let someone go because you can’t provide the work that they need to take care of their families.”
[Read more: As many small businesses struggle amid the pandemic, grit, determination and innovation key to staying afloat]
In April, I wrote a column praising the Paycheck Protection Program. Since then, it seems most of the media coverage of the PPP has been negative. There has been a focus on technical glitches with the program’s rollout and complaints about the rigid rules to achieve loan forgiveness. There’s also been backlash against larger, publicly traded companies that received loans, forcing them to return the money.
But after Hartford Business Journal’s newsroom talked to more than a half-dozen small employers for this issue’s small business focus, I’m convinced more than ever that PPP has been a good and effective program, keeping businesses afloat and preserving jobs while states were forced to shutdown major parts of their economies to stop the spread of COVID-19.
Whether it’s Lynn Welding, Ideal Fish in Waterbury, Hartford-based GO-Agency, Integrity Martial Arts in Enfield or even HBJ, the PPP has given tens of thousands of Connecticut businesses a financial lifeline during an unprecedented health and economic crisis.
Entire industries in this state — ranging from the news media to auto dealers, restaurants and events venues — sought out PPP funds to stay afloat.
Yes, the program could have run more smoothly, and it’s unfortunate it took an act of Congress to loosen some of the loan forgiveness rules that were scaring off potential borrowers. There are also legitimate concerns about minority-owned businesses’ lack of access to the program.
But all in all federal policymakers and the U.S. Small Business Administration should be given credit for rolling out the massive $660-billion program in such a short time period.
In my view PPP has been so effective that it must be studied, improved and used in future responses to major economic downturns.
Maybe it can be combined with a federal business interruption insurance program to protect small employers against future public-health emergencies.
Regardless of what happens next, business owners like Kania are grateful PPP was here to provide a helping hand during the coronavirus pandemic.
“It’s a great program,” Kania said. “All of our employees are so thankful no one got laid off.”
