JAMAICA PLAIN, Mass. (BRAIN) — Revolution Bicycle Repair, the smallest shop in this Boston neighborhood, received one of the smallest Paycheck Protection Program loans made to a bike company this year: just $1,700.
Owner James Norton applied for the loan in March, when his shop was emerging from a long New England winter only to face an impending COVID-19 lockdown. The check arrived in May, when sales and service, unexpectedly, had already taken off.
"It helped, but if we were under any major financial strain it wouldn't have done much," said Norton, a former bike courier whose shop serves urban bike commuters. He added the payment wouldn't have covered half his monthly rent.
Under court order following requests from news organizations, the Small Business Administration this week released details of PPP loans, including the identity of recipients of loans of less than $150,000, which hadn't been public previously. BRAIN identified more than 1,900 bike-related businesses — retailers, distributors, manufacturers, non-profits, tour and race companies and more — that received loans totaling $134.7 million. The loans, which are forgiven if spent primarily on payroll, were intended to protect more than 17,000 jobs at the companies.
The average loan to bike organizations was $67,200 and the median amount was $26,000. The list is dominated by hundreds of four- and five-digit loans to small operations like Norton's.
BRAIN spoke with many recipients this week. All were grateful for the peace of mind the program fostered in the early weeks of the pandemic lockdowns, when many feared for the future of their businesses. However, given the much-publicized bike boom that followed, many were left feeling a bit confused.
Chad Jensen, the owner of Jensen Oil & The Bicycle Station in Clinton, Iowa, received a $7,900 loan that he expects to be forgiven. 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 revenue, although he still does a few auto repairs, especially in the winter.
"When the PPP loans were announced, both our accountant and our banker told us we should apply," Jensen said. "At that point we didn't know what was going to happen. Almost immediately after that, the business went nuts."
"It gave us a bit of confidence back when we had the least amount of confidence" — Chad Jensen
Jensen went back to his financial advisors and asked if he should send the money back. "They said that if we used the money the way it was intended, we should keep it," he said. "It gave us a bit of confidence back when we had the least amount of confidence. It 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. He was entering his first spring as a bike retailer when the pandemic arrived. "It was a little scary to think what the situation was going to be like," he said.
You Bet! (which is named for a nearby old mining town, You Bet, California) received a $5,000 PPP loan that allowed Barre to keep his sole employee on the payroll in the spring. "There was a feeling of goodwill 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 brought attention to the brand new store that would have been hard to get otherwise.
"We didn't spend a huge amount on marketing, but a lot of people found us because biking just blew up. It was a good way to get discovered," he said.
Barre said he hadn't completed the PPP loan forgiveness paperwork but he expected to have his loan fully forgiven.
Same story, different scale
Companies and organizations that received much larger loans were careful not to crow about it. A recipient of one of the largest loans to a bike company declined to talk to BRAIN on the record. They said commenting on the loan, which they expect to be 100% forgiven, would create a bad look in light of the strong sales this year.
Giant Bicycle, Inc., the U.S. operation of Taiwan's Giant Group, received a $2.1 million loan that was approved in late April. Giant's U.S. general manager, John Thompson, said the proceeds were used exclusively for payroll, capital loan interest payment, rent, and utilities.
"It helped," Thompson said. "The PPP provided financial security that we did not have as we faced the crisis of COVID-19." He said Giant has not received loan forgiveness but is working on it. "We are in the process of compiling the payroll reports and accounting paperwork to determine if loan forgiveness is possible. There is no guarantee that the loan will be forgiven."
While the organizations benefitted directly from their loans, they also benefited from the entire $134 million or so that was spread out across the industry in the early days of the pandemic in the U.S.
"At that time the general feeling in the industry was that our businesses would suffer in the weeks to come," said Park Tool's Eric Hawkins, recalling the period when Park applied for a PPP loan.
"No one knew about the surge to come, but when it started we were ready" — Eric Hawkins
"Our European distributors were shut down, delaying orders and asking for extended terms. Our U.S. customers were laying off people or closing altogether. ... We thought that if the bike shops were closed or limited then they for sure wouldn't be in need of new tools and work stands."
Park Tool received a $795,000 loan. Hawkins said he wasn't sure yet if it will be forgiven in whole or in part.
"I thought it was great that our industry took advantage of the loans to help get us to where we are now. It was so important for us all to stay open through those first couple months, however it was financed. No one knew about the surge to come, but when it started we were ready."
The recipients of the 10 largest PPP loans to bike-related organizations:
- Saris Cycling Group, Inc., Fitchburg, Wis.: $2,373,000
- Giant Bicycle, Inc., Newbury Park, Calif.: $2,088,300
- Erik's Bike Shop, Inc., Bloomington, Minn.: $1,955,500
- Headlands Ventures LLC, Novato, Calif.: $1,773,900
- Alpinestars USA, Torrance, Calif.: $1,125,720
- Troy Lee Design LLC, Corona, Calif.: $1,118,800
- Pocket Outdoor Media, Boulder, Colo.: $1,083,350
- USA Cycling, Colorado Springs, Colo.: $1,005,700
- Bicycle Transit Systems Inc., Philadelphia, Pa.: $1,000,295
The list can be searched at searchppp.com.
