Red Leg Brewery had only enough money left to make payroll for four months when state restrictions to slow the spread of the COVID-19 pandemic forced the brewery to close in late March.
Todd Baldwin, Red Leg’s founder and president, told his 16 employees he planned to keep them all on the payroll until the money ran out and forced the brewery to file for bankruptcy. But that day never arrived. The north-side brewery received $87,000 from the U.S. Small Business Administration’s Paycheck Protection Program, created by legislation in March to help small businesses keep employees.
“The Paycheck Protection Program helped us survive as a business. We were one of many businesses that were told we couldn’t do business (during the pandemic),” Baldwin said. “We kept everybody on our payroll (16 people) and gave them a raise to $15 an hour through August since we had cut their hours. I told our employees we had eight payrolls left we could make and then we would go bankrupt, but the PPP loan came a few days later.”
Red Leg was one of five Colorado businesses and nonprofits SBA Administrator Jovita Carranza visited Friday to learn more about how businesses used PPP loans, which can be forgiven if 60% of the money is used for payroll. She also was “assessing the business climate” and seeking ideas on where to focus a possible additional round of PPP funding that could be included in pandemic relief legislation under negotiation between the Trump administration and Democratic leaders in Congress.
Red Leg has not only survived, but will move late this year into a $8.5 million brewing, dining and entertainment complex under construction at 2323 Garden of the Gods Road. The 2.5-acre complex, financed with a loan guaranteed by the SBA, could accommodate up to 2,500 customers, although Baldwin remains worried Red Leg will be able to use only a fraction of COVID-19 restrictions.
The new complex is a major expansion from the brewery’s location in a warehouse district at 4630 Forge Road, which Baldwin financed by borrowing up to $300,000 on 18 credit cards to start the business. A 28-year-old entrepreneur with no experience in the beer industry, Baldwin said he had been turned down by 30 local banks for loans, so he and his wife used multiple cards in 2012 to finance the business and paid down the balances within two years.
“Many businesses are saying if there was another round of PPP, they could continue growing their businesses. Some businesses, such as restaurants and entertainment businesses are still hurting and could use more help,” Carranza said.
“We have focused on the underserved market and smallest of the small businesses, and I am here to learn and apply what I learn” to shape future rounds of PPP loans.
Stephanie Richard received three types of help from the SBA to help Sparkles and Lace Boutique, a business she owns with Lisa Raulie, hire back its seven employees and survive being closed in the early months of the pandemic. The women’s clothing store, which is expanding into men’s clothing, received $19,000 in a PPP loan, a $7,000 grant and $6,600 in deferred payments on its SBA loan to bring back employees and pay rent on its building at 2140 Garden of the Gods Road.
“We would not have been able to make it with this help. We went more online while we were closed during the stay-at-home order and were really busy after we reopened but it slowed down afterwards,” Richard said. The business had received the SBA loan a year ago to finance an expansion and would have struggled to make payments on the loan while closed, so the deferred payments helped Sparkles and Lace survive, she said.
The U.S. Olympic and Paralympic Museum in downtown Colorado Springs also received a $100,000 PPP loan to keep paying its staff and prepare for its July opening, said Christopher Liedel, the museum’s CEO. The loan financed payroll for about 10 employees, which he said was “huge” in completing construction and keeping opening plans on track, such as making adjustments to meet pandemic-related requirements, he said.
