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Eugene Business Owner Says Paycheck Program Isn’t Cure All

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Bagel Sphere
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Congress is expected to approve a new round of small business aid as soon as Thursday. One Eugene business owner who received a loan the first time around says the program has its drawbacks.

Justin Freeman says his staff at Bagel Sphere went from 35 down to about three practically overnight. The Eugene bakery has three retail locations and provides wholesale baked goods to restaurants and coffee shops up and down the Willamette Valley.

Much of Freeman's business dried up when social distancing restrictions kicked in. He closed two of his retail locations. His wholesale business is a fraction of what it was before the pandemic.

Bagel Sphere applied for and received about $130,000 through the federal Paycheck Protection Program. But Freeman said he’ll have to pay the money back unless he uses 75 percent of it on payroll. And that’s a challenge when he has nothing for his employees to do.

He said he's been able to hire back a few of his employees while maintaining social distancing at Bagel Sphere's west Eugene bakery, in part by implementing staggered shifts. But Freeman said while some people have suggested paying employees even if they aren't actually working, he doesn't consider that a reasonable option.

“I can’t in any way justify paying one group of employees to sit at home, while forcing another set of employees to show up at work to earn their pay,” he said.

Freeman says he’s allowed to use some of the Paycheck Protection Program funds on fixed costs such as rent and utilities. But he said the program won’t help long-term unless it offers more flexibility.

He said many small business owners applied for the money without fully understanding the program. "Many of us are taking on some of the largest loans we've ever taken on in our lives without fully knowing the terms and conditions of the loan we just took on," he said.

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