Shoppers line sidewalks in Downtown Santa Cruz on March 25.
Shoppers line sidewalks in Downtown Santa Cruz on March 25.
(Kevin Painchaud / Lookout Santa Cruz)
COVID Economy

PPP window likely to be extended through May; how program has impacted business owners here

Hundreds of millions of dollars flowed to Santa Cruz County companies during the first round of the Paycheck Protection Program. With the pandemic still an economic drag, many are heading back for another potential round of funding — and now they’ll likely have more time.

For Santa Cruz County businesses pummeled by the coronavirus, the federal government’s Paycheck Protection Program was a lifeline. And with the window for a new round of PPP funding looking like it will be extended, local banks are working furiously to accommodate the current wave of applicants.

Zach Davis — co-owner of The Glass Jar, parent company of The Penny Ice Creamery, Snap Taco and The Picnic Basket restaurants — is one of them. In fact, he put in his application for a second PPP loan back in January.

As Santa Cruz County inches out of the pandemic, Lookout is chronicling the changes in our lives and the accomplishments of everyday people. “People in the Pandemic” is one of eight Lookout initiatives documenting all aspects of life amid COVID. For more, go to our COVID 2021 section, and sign up for COVID Text Alerts and our COVID PM newsletter here.

The last time around, his restaurant group received a loan of around $206,000 with help from Santa Cruz County Bank. “We used 100% of that to cover payroll, and of course it didn’t cover it all,” Davis said. But without PPP, he added, his businesses would likely not have survived.

Things are still tight as he awaits word on more government funding. “This is going to help us. It’s going to help a lot of businesses,” he said. “But I can’t say for sure that this will be enough.”

How to find a lender

PPP is the pillar of the federal government’s economic stimulus efforts to keep businesses afloat and stem mass layoffs during the pandemic. As was the case in the first round, it is being overseen by the U.S. Small Business Administration (SBA).

Zach Davis and Kendra Baker, owners of the The Glass Jar.
(Via Instagram)

Financial institutions that can issue PPP include any federally insured bank or credit union, as well as eligible non-bank lenders or Farm Credit Systems. The SBA website provides a list of lenders where users can search by zip code.

During that first round of the Paycheck Protection Program, which began in March and ended in August, banks distributed $525 billion through 5.2 million loans nationwide according to the SBA’s website. The average loan was $107,000. When Congress passed another stimulus package in December, it included $284 million for a second round of PPP.

The deadline to apply is March 31. But Congress this month has approved an extension to May 31, and President Joe Biden is expected to sign off keeping the PPP window open through that date. The move would enable some 190,000 small businesses which might not have been eligible for the program to finalize their PPP applications, USA Today reported.

In Santa Cruz County, 120 businesses — everything from body piercing studios to car dealers and hardware stores to mushroom growers — received loans of $500,000 or more during the first round. In all, those loans totaled nearly $172 million, according to a Lookout analysis of SBA data. Hundreds of other businesses received loans of $500,000 or less.

The largest loan went to Monterey Mushrooms Inc., of Watsonville, which received $10 million in PPP funds, while the second-largest went to the Santa Cruz Beach Boardwalk Amusement Park. The Boardwalk’s loan totaled $6.2 million, according to the SBA’s online database at

Boardwalk communications chief Kris Reyes said the loan program has proven essential to the tourist attraction’s survival.

“It helped ensure that approximately 389 people that work at the Boardwalk in some form or fashion received wages from August through December. About 200 of those people were full-time employees. So, it was very helpful to us in terms of being able to bring people back to work, bring them off furlough, pay them wages — in many cases, full wages — from August through December,” said Reyes, director of strategic development and external affairs.

The company is seeking a new PPP loan to bring more workers back and boost the wages of those who had their paychecks cut, Reyes said.

Housing Matters, a not-for-profit whose mission is to end homelessness in Santa Cruz, received a PPP loan of $522,869 which helped it keep 49 people on the payroll.

“Given the uncertainty of COVID and the unknown impact on our operations, the PPP allowed us to continue operating at full capacity without any layoffs or other impacts to staffing,” said Rebecca Steckler, deputy executive director. She said Housing Matters does not plan to apply for more PPP.

Pallet shelters on the Housing Matters campus.
Pallet shelters on the Housing Matters campus in November 2020. The not-for-profit received a $522,869 loan to help it stay afloat last year, but it doesn’t plan to apply again.

A business or not-for-profit is eligible for a second PPP loan provided it meets certain criteria. Each entity needs to have 300 or fewer employees, still be open, has used up or plans to exhaust its previous loan, and has suffered a drop of at least 25 percent in gross receipts in any quarter of 2020, compared to the same quarter in 2019.

Creedence Shaw, chief credit officer with Santa Cruz County Bank, told Lookout that his bank is prepared for a flood of PPP requests. The bank hired more than a dozen new employees to handle pre-application questions and what is likely to be a crush of applications. During the first round of PPP, the bank received about 2,600 applications and originated $371 million loans, said Mary Anne Carson, chief marketing officer.

Hope for a second round

For restaurateurs Stuyvie Bearns Esteva and Noelle Antolin, a new cash infusion could not come soon enough.

“We have just been squeaking by,” said Bearns Esteva.

The couple owns Lupulo Craft Beer House in downtown Santa Cruz and Copal on the Westside. Newly opened in July, Copal features Oaxan cuisine and is the city’s first Mezcaleria. Their sales have dropped by half, if not more, since March when coronavirus began sweeping the country. Nearly two dozen employees received pink slips.

They’ve used up their rainy-day savings and are relying on a first-round PPP loan to get them through.

Stuyvie Bearns Esteva and Noëlle Antolin with chef Ana Mendoza.
(Crystal Birns / Lookout Santa Cruz)

“Our reserve funds have been completely depleted,” Antolin said. She noted since Copal is a business that opened after February 15, 2020, it doesn’t qualify for the program, according to PPP rules. So any PPP money her company gets is for Lupolo only.

Since Santa Cruz officials declared a public health emergency in mid-March and restricted non-essential business operations, the couple has pivoted several times between various business models, ranging from a complete shutdown to offering outdoor seating to doing take-out only.

Switching models has been stressful and costly. They’ve had to purchase tents, tables, umbrellas, lighting, mountains of paper products for to-go orders, and other assorted items.

They burned through their first PPP loan of around $100,000 quickly. This time around, they will apply for a loan of upwards of $200,000 and they hope to start bringing back staff, the couple said.

Second-round PPP loans can be used for an expanded use of eligible expenses. Besides payroll costs and benefits, the money can cover mortgage interest, rent, utilities, worker protection costs related to COVID-19, uninsured property damage costs caused by looting or vandalism during 2020, operational expenses and certain supplier costs.

For most borrowers, the maximum loan amount is two and a-half times the average monthly 2019 or 2020 payroll costs up to $2 million. For those in the hard-hit hospitality industry, the maximum loan is three-and-a-half times average monthly payroll costs, up to $2 million, according to SBA rules.

As long as they spend the money according to the guidelines, including putting 60 percent toward payroll, borrowers can have their loans forgiven.

In the meantime, restaurant owners like Bearns Esteva and Antolin are hoping that spring will bring better times and the economy will round a corner.

As the weather gets warmer, tourists return, ICU bed capacity at hospitals improves and vaccine rollout is further along, the current gloom should lift. Life may normalize. At least that’s their hope. For now, they’re focusing on survival.

“Right now, it’s about keeping the doors open and the wolves at bay,” Bearns Esteva said.

Know of a story of someone surviving the pandemic? Share it here:


1:33 PM, Mar. 26, 2021: This story was originally published on Jan. 25 but has been updated to reflect that the deadline for applications for the PPP program is likely to be extended from March 31 to May 31.