The New Normal Is Still Not Operational For Many
Over the last five months, the COVID-19 pandemic has changed almost every aspect of our lives and continues to affect us for the foreseeable future.
Our daily routines have evolved to remote work environments, online school programs and even new ways to purchase groceries. Businesses and industries across the country have had to rethink and restructure their business models to accommodate a COVID-19 world and consumers have had to follow new rules and guidelines.
During this transition, many companies have been able to provide products and services to customers on a limited and socially distant basis. Through state coordination, and reasonable health and safety measures, businesses have been able to operate at certain capacity levels to generate revenue and garner some financial income.
Unfortunately, the live event and event rental community has not experienced the relief of returning to work.
As members of this industry from Maine, Arizona and Florida we have seen firsthand how our businesses and employees have been affected.
Due to continued state and local restrictions coupled with momentous occasions having been postponed or canceled, our industry will be one of the hardest hit for the long term by the pandemic. The deferral of concerts, conventions, weddings and other gatherings have resulted in little to no spring and summer revenue for many businesses like ours.
It is our top priority to create a safe environment for our customers, but implementing the necessary measures to minimize the risk of exposure for only a small number of participants will add on another level of financial burden that we cannot support at this time.
When the pandemic began, and many businesses shut down, Congress assisted with the federal Paycheck Protection Program (PPP) loan. This loan helped companies across the country to cover the cost of key expenses and to keep workers on the payroll.
Unfortunately, a 24-week limit was put in place on the loan, and no business can operate a full year’s worth of expenses on limited aid.
Right now, Congress is debating a new PPP loan, and Sen. Marco Rubio (R-Fla.) has been leading the charge to assist with businesses who are under serious, long-term financial burden from the COVID-19 pandemic.
There has been significant debate in Congress that the new loan program proposal is too limited, because businesses would have to show at least a 50 percent reduction rate in revenue. For members of the live event and event rental community, any reduction in revenue is detrimental.
Congress does not need to implement a “one size fits all approach” to the PPP loan. Businesses like ours in the event industry need assistance and Congress cannot lump businesses all together under one revenue minimum.
We propose a three-tiered loan system that provides flexibility for business of all sizes who have experienced varying levels of financial burden:
¯ For a business who has experienced 25 percent revenue reduction over the last year, the payroll and operating expenses multiplier for the loan calculator would be 3.0, for a maximum PPP loan amount of $5 million.
¯ For a business who has experienced 50 percent revenue reduction over the last year, the payroll and operating expenses multiplier for the loan calculator would be 4.0, for a maximum PPP loan amount of $8 million.
¯ For a business who has experienced 70 percent revenue reduction over the last year, the payroll and operating expenses multiplier for the loan calculator would be 5.0, for a maximum PPP loan amount of $12 million.
Through a tiered system, our businesses in Maine, Arizona, Florida and companies across the country can apply for a loan and demonstrate varying needs for assistance without being subjected to loss of revenue minimums.
2020 has almost come to an end, and without additional financial assistance from Congress, the COVID-19 pandemic will have a lasting, negative impact on the live event and event rental industry.
Our businesses have still not had the opportunity to reopen at a capacity that will generate revenue and make up for lost time. We call upon our leadership in Washington D.C. to support businesses across the country and pass a tiered Paycheck Protection Program loan system.
Without it, the future of live event operations will be in jeopardy.
Steve Calderon is the owner of Diamonette Party Rental in Miami, Fla.; John Hutchins is the president of Leavitt & Parris, Inc. in Portland, Maine; and Amir Glogau is the CEO of PRO EM National Event Services in Phoenix, Ariz.