JAMAICA PLAIN, Mass. (BRAIN) – Revolution Bicycle Repair, the smallest store in this Boston area, received one of the smallest paycheck protection program loans given to a bicycle company this year – just $ 1,700.
Owner James Norton applied for the loan in March, as his store came out of a long New England winter to deal with an impending COVID-19 lockdown. The check came in May, when sales and service, unexpectedly, had already taken off.
“It helped, but if we were under major financial pressure it wouldn’t have done much,” said Norton, a former bicycle courier whose shop serves urban bicycle commuters. He added that the payment would not have covered half of his monthly rent.
Under a court order following requests from news agencies, the Small Business Administration this week released details of PPP loans, including the identities of recipients of loans under $ 150,000, which had not been made public before. BRAIN has identified more than 1,900 bike-related businesses – retailers, distributors, manufacturers, nonprofits, circuit and racing companies and more – that have received loans totaling $ 134.7 million. The loans, which are canceled if they are mainly devoted to the payroll, were intended to protect more than 17,000 jobs in companies.
The average loan to cycling organizations was $ 67,200 and the median amount was $ 26,000. The list is dominated by hundreds of four- and five-figure loans made to small operations like Norton’s.
BRAIN spoke to many recipients this week. All were grateful for the peace of mind the program fostered in the early weeks of pandemic shutdowns, when many feared for the future of their businesses. However, given the high-profile cycling boom that followed, many felt a bit confused.
Chad Jensen, owner of Jensen Oil & The Bicycle Station in Clinton, Iowa, has received a loan of $ 7,900 which he expects to be canceled. Jensen’s grandfather founded the business as an auto repair shop in 1948. Jensen added bikes in 2004 and now bike sales and service provide most of the income, although he still does. some car repairs, especially in winter.
“When the PPP loans were announced, our accountant and our banker told us we had to apply,” Jensen said. “At that point, we didn’t know what was going to happen. Almost immediately after that, the business went crazy.”
“It gave us a little confidence back when we had the least confidence” – Chad Jensen
Jensen returned to his financial advisers and asked if he should return the money. “They said if we used the money as planned, we had to keep it,” he said. “It gave us a bit of confidence back when we were least confident. This allowed us to keep our employees on the payroll even during that two or three week period when there was no business at all.
In Nevada City, California, Jay Barre opened You Bet! Bicycle sales and service in August 2019. It was entering its first spring as a bicycle retailer when the pandemic hit. “It was a little scary to think of what the situation would look like,” he said.
You bet! (named after a nearby former mining town, You bet, California) received a $ 5,000 PPP loan that allowed Barre to keep his only employee on the payroll this spring. “There was a goodwill feeling that I was able to keep him employed and pay a month or two of rent.” Like most retailers, Barre’s sales exceeded expectations later in the year. The pandemic has drawn attention to the brand new store which would have been difficult to obtain otherwise.
“We didn’t spend a lot of money on marketing, but a lot of people found us because the bike just blew up. It was a good way to get discovered,” he said.
Barre said he did not complete the PPP loan cancellation documents, but expected his loan to be canceled entirely.
Same story, different scale
Companies and organizations that have received much larger loans have been careful not to brag about it. A recipient of one of the biggest loans to a bicycle company refused to speak to BRAIN about the case. They said commenting on the loan, which they expect to be 100% canceled, would look bad in light of this year’s strong sales.
Giant Bicycle, Inc., the US subsidiary of Taiwanese group Giant, received a $ 2.1 million loan which was approved in late April. Giant’s U.S. chief executive John Thompson said the proceeds were used exclusively for payroll, principal loan interest payments, rent and utilities.
“It helped,” Thompson said. “The PPP provided financial security that we did not have in the face of the COVID-19 crisis. He said Giant did not receive a loan cancellation but was working on it. “We are in the process of compiling payroll reports and accounting records to determine if loan cancellation is possible. There is no guarantee that the loan will be canceled.”
While the organizations benefited directly from their loans, they also benefited from all of the roughly $ 134 million that was distributed across the industry at the start of the pandemic in the United States.
“At that time, the general feeling in the industry was that our businesses were going to suffer in the weeks to come,” said Eric Hawkins of Park Tool, recalling the time when Park applied for a PPP loan.
“No one knew about the coming wave, but when it started we were ready” – Eric Hawkins
“Our European distributors were shut down, delaying orders and asking for extended lead times. Our American customers were laying people off or shutting down completely.… We thought that if the bike shops were closed or limited, they certainly wouldn’t be there in need of new ones. tools and work supports. “
Park Tool received a loan of $ 795,000. Hawkins said he was not yet sure whether it would be forgiven in whole or in part.
“I thought it was great that our industry took advantage of the loans to help us get to where we are now. It was so important for all of us to stay open for those first two months, regardless of the funding method. wave ahead, but when it started, we were ready. “
The beneficiaries of the 10 biggest PPP loans to organizations related to cycling:
- Saris Cycling Group, Inc., Fitchburg, Wisconsin: $ 2,373,000
- Giant Bicycle, Inc., Newbury Park, CA: $ 2,088,300
- Erik’s Bike Shop, Inc., Bloomington, Minnesota: $ 1,955,500
- Headlands Ventures LLC, Novato, California: $ 1,773,900
- Alpinestars USA, Torrance, California: $ 1,125,720
- Troy Lee Design LLC, Corona, California: $ 1,118,800
- Pocket Outdoor Media, Boulder, Colorado: $ 1,083,350
- Cycling in the United States, Colorado Springs, Colorado: $ 1,005,700
- Bicycle Transit Systems Inc., Philadelphia, Pennsylvania: $ 1,000,295
The list can be viewed at searchppp.com.