This month, we reached out to some veteran laundry operators to see how they\u2019ve financially coped with the impact of COVID-19 on their own businesses:<\/p>\n

Robert Maes<\/strong>
\nExpress Laundry<\/strong>
\nHouston<\/strong><\/p>\n

We took a number of steps to seek financial relief, once it became apparent that COVID-19 was truly a global pandemic and our local governments decided to impose stay-at-home orders. What ultimately drove our decision was the excellent work the CLA did in ensuring that laundromats were deemed an essential service.<\/p>\n

We consulted with our employees and quickly decided to keep all of our laundries open as a form of public service to help those who depend on laundromats to clean their clothes \u2013 just like grocery stores, for example, that chose to stay open so that people had a place to buy food. We also knew that our laundry business would suffer during the lockdown because not all our customers would decide to leave their homes.<\/p>\n

In some cases, that meant our business volume was down as much as 50 percent, so obtaining financial assistance was imperative to our survival as both a business and as a service to those who needed it. Our goal was simply to provide our laundry to those who needed it, to keep the employees who chose to continue working employed, and to financially try to break even.<\/p>\n

Since we made the strategic decision to stay open, we didn\u2019t seek relief on our rent. Instead, we focused on deferring our loan payments for three months with our lender, as well as applying for Economic Injury Disaster Loan grants and the Small Business Association\u2019s Payment Protection Program loans through the regional bank we have used the past 10 years. We applied online for the EIDL grants, which we received in less than 30 days, and we applied for the PPP via email with our regional bank \u2013 in both cases, we applied in early April, within a few days of the programs first becoming available. Like many other PPP loan applicants, we missed the first round of funding, but we quickly received PPP loan funds 40 days after making the initial application, when the second round of funding was approved by Congress.<\/p>\n

We have elected to maintain our regular operating hours, as opposed to reduced hours, to allow our customers more opportunity to wash their clothes with less crowds and to also encourage social distancing. However, given that our business volume is down as much as 50 percent, the PPP loans and EIDL grants have been invaluable to help cover our operating costs. Only our utility costs are variable and have adjusted in line to our slower operation. We also are using the PPP funds for our operating costs because we want to maximize the amount that hopefully will be forgiven with the revised rules Congress recently passed.<\/p>\n

It should be noted that our equipment loan deferment has been an invaluable buffer. We actually got confirmation on the loan deferment first, and at one point we didn\u2019t know if the PPP loan would ever be approved because initial SBA funds ran out so quickly. In essence, the loan deferment has become an inexpensive insurance policy and that is how we will continue to use those funds until they are no longer required. We will not spend what we saved with the loan deferment unless we absolutely have to.<\/p>\n

Applying for the PPP loans was relatively easy, but proving loan forgiveness will most likely be more difficult. The PPP application, for example, is only four pages long, but the forgiveness application by comparison is 11 pages. Although Congress recently passed legislation relaxing some of the forgiveness requirements, it will still take some work on behalf of the borrower.<\/p>\n

Anyone who has received PPP loans and has employees should calculate the full-time equivalency now to make sure they allocate and use the funds in the most efficient way to maximize how much of the loan is forgiven. Keep in mind that whatever PPP funds are not forgiven can be returned before the end of the initial interest-free period.<\/p>\n

Ken Barrett<\/strong>
\nWashin Coin Laundry<\/strong>
\nGolden Springs Laundry Service<\/strong>
\nAniston\/Oxford, Ala.<\/strong><\/p>\n

As the recent restrictions were put into place, the biggest impact I discovered was due to my attendants losing their daycare help. This was going to impact our ability to run normal shifts for our drop-off laundry service. As we had already set up a pickup-and-delivery business, we were able to temporarily close our drop-off service, shift to pickup and delivery, and allow our staff to work hours based on their availability.<\/p>\n

My next concern was having the staff available at the other end to open the drop-off business when the time was right. At that point, I made the decision to pay the staff their normal hours throughout the downtime. As they were still working reduced hours, they would not receive the unemployment benefit.<\/p>\n

So, I applied to the Paycheck Protection Program and received a loan. This is being used to cover mostly wages, in hopes that the loan will be forgiven.<\/p>\n

My CPA was monitoring the available funding as the laws were being passed and was in daily communication with one of our local banks. She was able to have all of the paperwork completed and submitted for all of the businesses she works with on the first day. She continues to monitor the updates and is tracking all of the required items to submit for forgiveness when that time comes.<\/p>\n

My experience with this process has been seamless, as I already had the right team members in place.<\/p>\n

My advice to other owners is to determine what parts of your business should be handled by the professionals. In this case, the laws and forms were changing right up to the hours before the applications could be submitted. I was busy spending the time working on marketing my pickup-and-delivery business and making some renovations to our drop-off area, while my accountant did what she does best.<\/p>\n

Paul Hansen<\/strong>
\nSu Nueva Lavanderia<\/strong>
\nPalos Heights, Ill.<\/strong><\/p>\n

I have used two of the programs that Congress and the SBA set up. First, I applied for the Economic Injury Disaster Loan program, where the SBA provides a grant of $1,000 per employee, up to a maximum of $10,000. The funding arrived in about six weeks, and I never pursued any additional funding from this program.<\/p>\n

At the time, we were told it would not have to be paid back; however, once the Payroll Protection Program was instituted, that changed. Now, while the grant doesn\u2019t have to be paid back directly, the amount given is to be deducted from any PPP loan forgiveness. The application process was fairly simple, and it only took about 15 minutes to complete the online application.<\/p>\n

The other \u2013 and far more impactful \u2013 program I used was the PPP. This was a real game-changer for many, myself included. I have more than 50 employees, so the loan amount was significant and allowed us to keep everyone working, even though business was down significantly. This was another case where it took the SBA a bit of time to get all of the systems in place to be able to process the loans.<\/p>\n

From the time this program was first considered in Congress, I kept in constant contact with my bank to be sure they were on top of it and that I had everything I possibly would need to apply. The program started on a Friday, but my bank didn\u2019t have their systems in place until the following Wednesday, when I applied. The funding arrived in about 10 days. I have used the funding mostly for payroll, but I\u2019ve also used a portion for utilities. Based on the current rules, I\u2019m confident that 100 percent of it \u2013 less my $10,000 EIDL grant \u2013 will be forgiven.<\/p>\n

Currently, I\u2019m interested in the Federal Reserve\u2019s Main Street Lending Program to finance at least one full-scale retool. However, the program is still being rolled out and whether or not laundromats are a good fit for this program remains to be seen.<\/p>\n

For those who have not taken advantage take of these programs, I recommend you do so. There is still funding available, and Congress has loosened the requirements for forgiveness, making it a real no-brainer.<\/p>\n

Looking to the Future<\/h3>\n

What do the next several months look like for laundry owners?<\/p>\n

\u201cLenders are pulling back on aggressive financing offers for new store projects,\u201d Michalek said. \u201cSBA-backed lending is seeing very long lag times for acquisition financing. Be ready to bring more money to the table for an acquisition or new store project. Interest rates will remain low at least through 2021. In addition, equipment manufacturers are looking to move metal fast and are quickly devising new financing programs to help new and seasoned owners. Use this opportunity to get federal and state economic relief to help with your longer-term plan for viability.\u201d<\/p>\n

Indeed, store operators should definitely not bury their heads in the sand and fail to adapt during these historic times. It\u2019s critical to be proactive in knowing where you stand financially, to model out what your situation looks like at different levels of revenue and to develop a plan as to what will be needed at various revenue levels to get through this difficult period.<\/p>\n

\u201cFortunately, we are in unprecedented times of low rates for borrowers,\u201d Frazier noted. \u201cOften, as is the case of the stock market, the best time to reinvest in your business is when it is challenging and on the forefront of the good times. The COVID-19 pandemic will be mitigated and eventually pass, and changes will occur in how we do business going forward. Those who have adapted and continue to invest will reap the benefits.\u201d<\/p>\n

[Editor\u2019s Note: This article is intended to offer general information only. It is not intended to provide specific business or financial advice. Before making any business or financial decision, be sure to contact your accountant, financial advisor, business attorney or some other business professional.]<\/p>\n","protected":false},"excerpt":{"rendered":"

Securing Economic Relief During These Difficult Times According to a recent Coin Laundry Association survey, nearly 40 percent of the laundromat owners who responded indicated that they had applied for federal funding assistance during the COVID-19 pandemic. \u201cStore owners are very concerned about the uncertainty of when they will be able to operate without restrictions, […]<\/p>\n","protected":false},"author":1230,"featured_media":9350,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[98,243,244,245,9351],"tags":[],"class_list":["post-9349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured-articles","category-feature-1","category-feature-2","category-feature-3","category-highlights"],"_links":{"self":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/9349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/users\/1230"}],"replies":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/comments?post=9349"}],"version-history":[{"count":1,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/9349\/revisions"}],"predecessor-version":[{"id":9351,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/posts\/9349\/revisions\/9351"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media\/9350"}],"wp:attachment":[{"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/media?parent=9349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/categories?post=9349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/planetlaundry.com\/wp-json\/wp\/v2\/tags?post=9349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}