JumpScale In Local News
JumpScale team members have been featured on many news outlets throughout the United States. Our team has compiled those interviews here.
The WILS Morning Wake-Up w/Dave Akerly
By WILS-AM 1320
June 8th, 2020 at 12:00 am
Small businesses counting on loan forgiveness could end up stuck with debt. JumpScale’s Josh Knauer sheds some light on the situation. Listen here.
Paycheck Protection Program deadline extended for small business owners
Read the original article here.
By Steve Noviello
July 8th, 2020
DALLAS - Small business owners still have time to cash in on big money.
The application for loans through the Paycheck Protection Program has been extended.
The time to apply has been extended. The time to spend has been extended. And there's more than $130 billion up for grabs.
For small businesses feeling the crush of COVID-19, it's some much-needed flexibility. The deadline to apply for forgivable paycheck protection loans has been moved to August 8.
Josh Knauer is the founder of JumpScale, a [wellness-focused responsible investment consulting] firm.
“Small businesses on Main Street throughout the US were not the bad actors in this,” he said.
The program first launched in early spring amid controversy as big corporations and publicly traded companies got approved for hundreds of millions in forgivable funds. Now, the latest round of government cash sits unclaimed with more than $130 billion.
“Businesses that had established relationships with banks were given priority,” Knauer said. “It is all of money to all of us individually. But when you consider the millions of businesses that currently facing bankruptcy or cash insolvency, we absolutely need a lot more.”
Knauer says what companies need is a long term sustainability plan. While the timeline to spend the money has also been expanded to 24 weeks, the program still doesn't forgive cash spent on COVID prep.
“A small store will have to spend 10-20K just to install all the safeguards that are needed to keep people safe in a retail store,” he said.
What companies can do is apply, even if they've already tried before.
“Anyone who applied before, even if you received one, you have the right to apply again,” Knauer said. “If you need over the additional time, the PPP has been extended.”
Knauer says now is not the time to be taking on more commercial debt. And much like personal borrowers, business owners should be on the lookout for predatory lenders.
Who got PPP loans in San Diego? Everyone from dentists to restaurants and Comic-Con, too
Read the original article here.
By Mike Freeman, Lori Weisberg
July 12, 2020 at 5 am
Nearly 7,600 businesses and nonprofits got federal coronavirus aid of $150,000 or more, with a much smaller share receiving loans of as much as $5 million to $10 million.
As the coronavirus pandemic worsened in March and San Diego’s economy suddenly went into lockdown mode, Karl Strauss Brewing Company quickly shed more than 600 of its 800 employees, closed its 10 brewpubs for dining in, and saw sales of its iconic draft beer slow to a drizzle.
Fast forward to today, and Karl Strauss expects that 225 of its employees will be back at work and eight of its 10 restaurants will have reopened by the end of the month.
Credit a more than $5 million loan it got via the federal government’s coronavirus relief program.
From dentists, law offices and construction companies to restaurants, hotels and even Comic-Con, the Paycheck Protection Program provides businesses with 500 or fewer employees loans that can be forgiven as long as the employer complies with certain conditions, key among them using 60 percent of the money to retain workers.
“When you see 90 percent of your revenue go away overnight and you’re staring down the barrel of so many fixed expenses like rent and electricity, we became so concerned about how long we could hold out,” said Chad Heath, vice president of sales and marketing. “Now this money gives us hope, that we can get through the coronavirus and come out of this a successful business.”
The Trump administration on Monday released a tsunami of data on the $660 billion Paycheck Protection Program. It came in two waves: loans from $150,000 to $10 million where establishments receiving funds were identified; and smaller loans under $150,000 where recipients remained anonymous.
In San Diego County, some 7,595 PPP loans fell into the $150,000 to $10 million range, with borrowers spanning the region’s economic and civic life.
The San Diego Symphony got a loan, along with 365 other local nonprofits. As the pandemic put the economy into a deep freeze, Congress specifically made nonprofits and faith-based organizations eligible for PPP funding. In all, 135 local churches received PPP loans of $150,000 or more.
Regional restaurant chains Rubio’s, Islands and Claim Jumper tapped PPP funds. So did 182 local law firms, including Procopio, Cory Hargreaves & Savitch, Tyson & Mendes and Higgs, Fletcher & Mack.
Showgirls of San Diego got a loan in the $350,000 to $1 million range and retained 33 jobs. Taylor Guitars, publicly traded SeaSpine Holdings and Adamis Pharmaceuticals, and private schools La Jolla Country Day, Francis Parker and Cathedral Catholic each received PPP loans greater than $2 million.
“As a nonprofit, La Jolla Country Day School is not immune to the significant disruptions and challenges of the COVID-19 pandemic,” said the school in a statement. “The goal of the Paycheck Protection Program is to keep our workforce employed ... In this challenging time, we are carefully managing our school’s financial resources and looking for ways to reduce costs without impacting student development and furloughing employees.”
More than 200 local doctor’s offices, dental offices and medical clinics received the federal aid as their revenue evaporated following stay-at-home orders in mid-March.
“The Paycheck Protection Program was a godsend for our anesthesiologists,” said Dr. Andrew Zimmerman, president of the 265-doctor Anesthesia Services Medical Group, which received a loan exceeding $5 million. “With the sudden cancellation of elective surgeries, we saw a reduction in surgical volumes of more than 50 percent. The PPP funds we received helped soften the blow.”
A rocky start
For smaller businesses with loans under $150,000, nearly 44,000 establishments received funding in San Diego County, with an average loan size of roughly $35,000.
“It touched a lot of small businesses and nonprofits, and there have been a number of jobs preserved,” said Mike Sovacool, deputy director of the U.S. Small Business Administration for San Diego County.
According to the SBA data, 246,000 jobs were retained locally as a result of the PPP. But the data is incomplete. Thousands of loan recipients either left the “jobs-retained” field on the application blank or entered zero.
Meanwhile, some applications appear to inflate the number of jobs preserved. NTN Buzztime of Carlsbad, a publicly traded trivia game company that received a $1.6 million loan, listed 422 jobs retained on the application, according to SBA data. But the company’s annual report states NTN employed just 39 workers as of March 16 after laying off 35 employees in January.
Jobs retained data is not used to calculate loan amounts, which are based on a formula applied to average monthly payroll for 2019. PPP borrowers must document their payroll through tax forms and other records supplied to banks.
PPP got off to a rocky start. Rolled out in April within a week or so of congressional approval, the $349 billion first phase of the program had just 30 pages of rules when it launched. The flood of applications overwhelmed the SBA online electronic application system, which repeatedly crashed in the early days.
When the dust settled, large firms such as Shake Shack, Ruth Chris Steak House and the LA Lakers reported getting PPP loans while many small Main Street businesses failed to receive approval before the money ran out.
Under public pressure, Shake Shack, Ruth Chris, the Lakers and others big outfits returned their loans. Meanwhile, the $310 billion second round of the PPP program, launched in May, has delivered better access for smaller firms as the initial frenzy died down.
About $132 billion remains available to lend in the second round, which is set to expire on Aug. 8.
Nationwide, nearly 5 million firms have been funded. In California, 580,000 establishments with 500 or fewer employees received $68 billion in PPP loans. The bulk of the money, about $50 billion, went to the 87,000 firms with loans above $150,000.
“If you were denied in the first round because of the chaos, don’t be discouraged. Try again,” said Danny Fitzgerald, acting director of the San Diego and Imperial Small Business Development Center, which helps firms with financing. “Take advantage of it now because my guess is it won’t be extended past Aug. 8.”
How diverse were the recipients?
Though improved, the Paycheck Protection Program still has its critics. They contend too many loans are still going to well-connected or well-heeled establishments.
“The data that came out this week, as well as data that came out prior, has exposed significant issues that have raised a lot of eyebrows and significant concerns for taxpayers,” said Josh Knauer, an adjunct professor at Carnegie Mellon University and general partner at business advisory firm JumpScale. “As we get more data, we are going to see where this program failed.”
Relatively few PPP loans appear to have been made to minority- and women-owned businesses. While the SBA asked for gender and ethnicity data on the loan applications, it was a voluntary disclosure. Many applicants left those boxes blank. Fewer than a dozen San Diego County firms that received loans above $150,000 identified themselves as Black owned.
Donna DeBerry, head of the Central San Diego Black Chamber of Commerce, said limited outreach to Black businesses — plus historical hurdles around credit scores and “unbanked” households in minority communities — blocked many Black-owned firms from accessing PPP loans.
The chamber is raising funds on its own to aid Black businesses as they reopen. So far, it has raised nearly $500,000 towards its $1 million goal. The chamber has received roughly 500 applications, said DeBerry.
Who’s who of civic heavyweights
In San Diego County and nationwide, the economic damage from the coronavirus extends well beyond restaurants, hotels and tourism businesses. Lawyers, accountants and others who provide services to hard hit sectors also have been clobbered as their clients cut spending to focus on paying rent and keeping the lights on.
“Things (that clients) would normally need a lawyer for they are just putting off because they are really fighting for survival,” said Steve Cologne, managing partner of Higgs Fletcher & Mack. “And of course with the courts, trials that would normally get set by judges are being put off now until late 2021. There are going to be no trials this year at all.”
Professional, scientific and technical services firms were the largest business sector receiving PPP loans in San Diego County. Higgs, Fletcher & Mack received a $2.8 million PPP loan, which helped the firm retain all of its 150 employees at a time when some law offices are laying off or furloughing workers.
“We have not had to do that, and I think it’s because we have been very aggressive since this hit in March in reducing expenses and seriously taking advantage of opportunities like the PPP,” said Cologne.
From the beginning of the PPP program, the San Diego/Imperial Small Business Development Center partnered with The Nonprofit Institute at the University of San Diego to get the word out to charitable/civic organizations.
“Their Ph.D students, we turned them into business advisers for nonprofits, and they have been doing a great job,” said Fitzgerald, the acting SBDC director.
Local nonprofits receiving $150,000 or more in PPP loans reads like a who’s who of San Diego’s civic heavyweights. They include the Old Globe and San Diego Repertory theaters, Boys & Girls Clubs across the county, California Center for the Arts, San Diego Blood Bank, the United Way, several museums, Big Brothers/Big Sisters of San Diego County, Habitat for Humanity, and the Helen Woodward Animal Shelter, among others.
Several non-profit charter schools also received funding, as did the La Jolla Institute for Immunology and the J. Craig Venter Institute, which researches genomics. California Western and Thomas Jefferson schools of law landed loans.
The San Diego Symphony got a $3.2 million PPP loan, which it used to pay staff and musicians. But the funding isn’t close to making up for $7 million in lost ticket revenue alone from canceled shows, said Symphony Chief Executive Martha Gilmer.
“I think restaurants and cultural institutions are the most decimated of any,” she said. “I feel like I’m speaking for my colleagues in the museum world, the theater world, the musical performing arts. Running arts organizations is complicated, and the PPP has been a savior for us. We really relied on it or we would have been in hibernation mode.”
The Symphony’s PPP money helped it keep 159 employees, but not everyone. Some part-time workers for shows haven’t come back, and “significant numbers” of employees remain on furlough or are working at reduced salaries, said Gilmer.
The Symphony has an endowment, which currently sits at roughly $80 million, said Gilmer. As with most endowments, the use of core funds is restricted. While the Symphony takes a draw every year for operations, it amounts to less than 20 percent of its annual budget. Ticket sales, hall rentals and concessions, along with contract performances for groups such as the opera, make up the bulk of its operating revenue. All have been derailed by coronavirus.
“This pandemic has a long tail for the arts,” she said. “We are going to get through it with additional fundraising and keeping our donors close to us. but all elements of the institution have had to take some pain.”
Saving jobs at the ‘Con’
The pandemic has taken an especially hard toll on San Diego’s convention business, which has been essentially shut down for the last four months, with no clear indication when such large gatherings will resume.
For that reason, the city’s Convention Center Corp. applied for and received in April a PPP loan of nearly $4.4 million, which has allowed it to retain about 230 workers, most of them full-time, although working reduced hours.
Before the pandemic, the corporation employed 490, many of them part-time workers whose jobs relied on a steady stream of bookings. With the bayfront facility currently operating as a temporary homeless shelter, the loan money helps pay the wages for the center’s employees who are now staffing the homeless shelter, said Mardeen Mattix, the center’s chief financial officer.
Once the Convention Center resumes limited operations in the future, the level of staffing remains a big question mark, Mattix said.
“We know future events will have fewer attendees for some time, which means you won’t need as many people cleaning and providing security so we won’t bring back our full labor force until event attendance is back to prior levels,” Mattix said, “so we will have to re-strategize how we do our business.”
The convention center’s single biggest tenant, Comic-Con International, also was a loan recipient — $1.28 million — which enabled it to retain all 86 of its employees, said spokesman David Glanzer. Comic-Con had to cancel both its WonderCon show in Anaheim and Comic-Con in San Diego, an annual July gathering that normally draws 135,000 attendees. Organizers have now pivoted to a virtual convention they’re calling Comic-Con@Home, which will debut July 22-26.
“People think of Comic-Con as being a very financially secure organization, which we certainly are, but the pandemic impacted us in a way we never thought it would but this is true of every other company out there,” said Glanzer.
A number of San Diego’s well known private schools, including Santa Fe Christian, St. Augustine’s, Pacific Ridge, Mater Dei Catholic, The Gillispie School and Francis Parker, also were the beneficiaries of the federal loan program.
In the case of Francis Parker, PPP funding allowed it to keep all of its staff employed throughout the pandemic as the school provided remote online learning to its students. Were it not for the loan, Francis Parker would have had to let go some 32 percent of the workers, officials said.
“We are grateful to have qualified for a PPP loan as it allows us to keep all of our valued employees — from teachers to coaches to bus drivers — on payroll during these increasingly uncertain times,” Kevin Yaley, Head of School, said in an emailed statement. “With the combination of the loan and our operating reserves, we thankfully have not had to make employment or vendor reductions and are well prepared to continue through these turbulent times as we plan for our return to campus.”
U-T staff writer Phillip Molnar contributed to this report.
After a White House Mandate, Hospitals Are No Longer Reporting Important Data to the CDC
Meet the former White House advisor who believes this new system could be "very dangerous."
Read the original article here.
By Jason Barsky
July 16, 2020 at 5:18 pm
On Wednesday, July 15th, the Trump Administration announced that it had mandated hospitals to go around the Centers for Disease Control (CDC) and begin sending information on equipment and hospitalizations directly to the Department of Health and Human Services (HHS).
Until yesterday, the CDC was responsible for collecting and analyzing COVID-19 data regarding not only the number of Coronavirus patients in hospitals, but also the availability of intensive care beds, and the availability of PPE.
Now, hospitals must report that information to the HHS. HHS Assistant Secretary for Public Affairs, Michael Caputo, said this change was made because “the CDC’s old data gathering operation once worked well monitoring hospital information across the country, but it's an inadequate system today."
"The President's Coronavirus Task Force has urged improvements for months, but they just cannot keep up with this pandemic."
Following the announcement, many infectious disease specialists, public health officials, and experts in the field of data collection and analysis expressed concern about this change.
Speaking to FastCompany.com, former White House adviser on data gathering, Josh Knauer, called the new system “very dangerous.”
Knauer, who is currently a General Partner in the Pittsburgh based Jump Scale, called into the Jason Barsky Show to discuss his concerns in greater detail.
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