What the COVID-19 Stimulus Package Means for Your Salon.
This is our biggest subject to date! A $2 trillion stimulus package was recently signed into US federal law, with nearly $350 billion* of it dedicated to a Paycheck Protection Program for small businesses. The program provides forgivable (and low interest) loans and is designed to get as many people back to work post-shutdown as possible. This is good news for the salon industry, but it may or may not be the perfect option for your salon. Read below as we unpack the most recent news.
*Note more was added later in the spring and stimulus efforts are still ongoing)
What Every Salon Owner should know about the COVID-19 Stimulus Package
The Paycheck Protection Program.
This program was created to keep people working. If you are eligible for this small business loan, you can receive up to 8 weeks of average payroll and other costs, such as your rent and utilities. The loan will then be forgiven if your business retains its employees and their salary levels. If your business has already laid off workers, you can rehire these workers and then can take advantage of the provisions in this loan program.
This program is for businesses of under 500 employees and is something you should consider especially if you are a commission based salon.
Here is where you can go for more information:
- The Small Business Administration is administering the Paycheck Protection Program. Their website should be your first step to find out more.
- The US Chamber of Commerce has created a helpful guide to educate yourself about the stimulus package and better understand eligibility for loans here.
- Your bank. The organization you already do your business banking with should be your first stop to ask questions about the Paycheck Protection Program loans. Though it is probably not impossible to go to a new lender, your current bank will have the details about your business that should make the process smoother. Your bank may not yet have all the details they need from the SBA to proceed, but it is good to speak with them as soon as possible so that when loans become available you have already done the legwork. We recommend talking to your lender not only about whether the Paycheck Protection Program is right for you, but also about when the best time to fund the loan for your business would be. That may or may not be right away.
The Paycheck Protection Program Doesn’t Seem Right for Me. Are there Other Options for My Salon?
Yes. There are options at the local, state, and federal levels. The more rocks you turn over (ie, the more research you do), the more options you will have. Here are a couple places to start:
- The Small Business Administration is still a great place to start even if you think you do not qualify for the Paycheck Protection Program. The SBA has other COVID-19 recovery programs including bridge loans and debt relief that may be better for you, especially if you own a booth rental salon. Educate yourself at the SBA site and then make an appointment to speak with your lender.
- Other resources may be available to you as well. Check to see if large businesses in your area are providing grants to support small businesses. And look to industry organizations like the Professional Beauty Association for small stipends to help ends meet.
Should I be Applying for Unemployment? How About My Renters?
The ability for independent contractors to apply for unemployment benefits has shifted – though availability of those benefits varies from state to state. Your state will have an Employment Security Department (it may go by a different name) that administers unemployment benefits. Their website will be the best place to start. If you need help finding your state’s Employment Security Department, you can find it through the US Department of Labor website. If you are a booth rent salon, we highly recommend sharing what you learn with your stylists who may not be up to date on the latest developments.
As the owner, I am the Only Salaried Employee at My Salon. Is the PPP for me?
You will want to speak with your banker about the best option. If you are paying yourself on a W2, you will likely qualify. The best scenario might be that your renters get small business loans themselves to pay you and keep themselves afloat, but a lender will be able to give you more specific guidance, especially after they get directives from the SBA.