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Rouj Creole on Bluebonnet Boulevard is among businesses owned by City Group Hospitality, whose restaurants applied individually for federal Paycheck Protection Program loans earlier this year. 

For Baton Rouge-based Westport Linen Services, a laundry business that primarily contracts with hospitals for linen services, the economic toll was swift during the coronavirus pandemic and a federal loan program "was a godsend."

With the stage set for another federally funded program, Westport likely won't apply again after carefully targeting the funds it received to survive the downturn. Others said they likely will apply.

Hospitals across the state had canceled elective surgeries and drastically reduced how many patients would spend the night in an effort to curb the spread of coronavirus. 

That meant significantly less demand for laundry services. So when the Paycheck Protection Program was passed  and the local company was approved, it enabled the business to keep employees on the job full-time though sales were down 40% at the time. 

"The PPP was a godsend for us," said John Landry, president of Westport Linen Services. "It was very important for us to keep (all our employees) because labor is so hard to find these days. We basically used the whole amount for payroll."

The company has about 500 employees and was approved for $1.9 million, a potentially forgivable loan, records show. 

Now nine months later, the company has seen sales improve, though it still remains about 10% lower than last year.

Westport Linen even acquired one of its competitors, Greenville, Mississippi-based Broadway Linen Services, in a deal that closed in November. 

As for seeking a second round of funding, Westport's unlikely considering that it hasn't gotten a response about whether its first loan has been forgiven yet, Landry said.

The Paycheck Protection Program was intended to avoid mass layoffs while residents were encouraged to stay home and indoor capacity restrictions were enforced. The program was meant to support small businesses in particular, which are less likely to have significant cash reserves. 

Congress was expecting Monday to vote on a $900 billion relief bill that includes a second round of Paycheck Protection Program loans. For restaurants, which have been operating with limited capacity for months, those businesses could seek a forgivable loan up to 3.5 times monthly payroll costs. Likewise, to keep the program targeted for small businesses, those with 300 employees or more are not eligible. 

Since the spring, about one in five small businesses nationally have closed due to the economic recession, according to Womply, a data business. More than half of small businesses have just two months' cash on hand or less, and one in six has two weeks or less of cash, according to a survey by the Census Bureau.

In Louisiana, more than $7.6 billion in total loans were approved as of August, about $5.3 billion of which were for $150,000 or more for 9,000 businesses. The remainder went to another 68,937 loans of less than $150,000 in value. The larger 9,000 loans supported nearly 500,000 jobs through the several weeks covered by the program, according to U.S. Small Business Administration data. 

In the spring, City Slice pizza had little foot traffic after LSU closed its campus and sent students home. 

"As soon as LSU got shut down it cost us an enormous lifeline of income," said Stephen Hightower, managing partner at City Group Hospitality. "We're still seeing some depression in our market."

The local restaurant group also operates City Pork on Jefferson Highway and Rouj Creole on Bluebonnet Boulevard. 

Each eatery applied separately for the program, which was a bit tedious, but worth it, Hightower said. The affiliated companies were approved for at least $325,200, protecting about 80 jobs, records show. The companies have applied for loan forgiveness, but that has not yet been granted. 

Hightower is on the board of trustees at the Louisiana Restaurant Association and said the response so far from fellow business owners has been to celebrate the new round of support. 

"This is definitely great news; … it's just been a lifeline," he said. "We are all striving to get back."

Meanwhile, Baton Rouge-based Vivid Ink Inc., a print graphics business, is considering applying for another round of support as well, though the application process was a little fraught the first go-round and the company applied three times. 

"We applied really early and then they changed the rules so we had to reapply," said Stephen St. Cyr, president of Vivid Ink. 

Vivid Ink was approved for $1.2 million to support 120 workers at the company. Most of the money was spent on payroll and some was used for rent. 

Now, dozens of events are still canceled and there's not much demand for signs or banners, so sales have been sluggish. The company expects for sales to be down 10% by the end of the year. 

"It's rebounded but it's still down from where it used to be," St. Cyr said. "Our plans are to get back to where we were in 2019 in 2021. If we're eligible, we're going to apply for it."


Email Kristen Mosbrucker at kmosbrucker@theadvocate.com.