Rising Tide Brewing Owner who got Paycheck Protection loan: It's an "incredibly bad fit"

Discussion in 'Beer News & Releases' started by Jason, Apr 10, 2020.

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  1. Jason

    Jason Founder (0) Aug 23, 1996 Massachusetts

    From CBS NEWS:
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  2. officerbill

    officerbill Initiate (0) Feb 9, 2019 New York
    Society Trader

    It's not a good fit because the program is intended for immediate use to keep people on the payroll during this crisis; if used for that purpose it becomes a grant.

    They wanted to use it as a grant to cover payroll, at some future date, after the crisis has passed.

    She admits that in the interview.
    Basically she wanted free money to cover normal business expenses after they reopen.
    surfcaster, beerindex, t420o and 17 others like this.
  3. Neverdie7

    Neverdie7 Crusader (498) Jun 7, 2008 Wisconsin

    This is correct. If you lay your employees off you do not get a reprieve from paying back the loan. It is meant to help KEEP your employees employed.
  4. AZBeerDude72

    AZBeerDude72 Initiate (0) Jun 10, 2016 Arizona

    I read the article and sort of am miffed at these people. The intent of the loan was to KEEP the staff working and utilize the cash given so they are kept working. The owners laid off all but 4 people, so they want to take 200,000 in tax payer money to use as a nest egg for months until they open. Sorry that is not the intent of the money, so with that said they owe it back like ANY loan given. Not sure the confusion, when your going to apply for money make sure you UNDERSTAND the terms, they knew before taking it that it was due back, now they want to blame the govt for what? Oh by the way, my understanding is this is a very low int. loan, so that in itself is a win win since they are not accruing heavy interest as normal, so again their choice before signing the docs.
    #4 AZBeerDude72, Apr 10, 2020
    Last edited: Apr 10, 2020
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  5. AZBeerDude72

    AZBeerDude72 Initiate (0) Jun 10, 2016 Arizona

    "But we were forced into a position where we had to immediately apply or risk having the funds run out".

    Another thing that ticks me off. Their words, we rushed to take money before it ran out. Now there is $200,000 less for another business to use which has kept its employees. Maybe they should have allowed some other people to take the cash who want to pay their people and help as intended rather than use it to float their other costs and not help their staff.
    t420o, nc41, kevanb and 12 others like this.
  6. MrOH

    MrOH Pooh-Bah (2,989) Jul 5, 2010 Malta

    Fuck these folks. What they didn't say was that two of those four were themselves. Use the loan to help your employees. Find work. Oh, you have a bunch of malt that you ordered before this all went down? Make a bigass barleywine to fill a conical. Huge imperial stout for another. Do some sours or brett beers that will take some time to develop. All of this will take a lot of busy work before packaging, and then work to package. Once you have a fermenter free, brew another. Christ, there is always, always deep cleaning to do. Look into doing crazy shit! There is a glut of fresh produce on the market now, and can be had for cheap. This is type of stuff these grants are meant for.

    A lot of business owners are treating this like the end of the world because they can't do the things they normally do. The folks that will succeed will be the ones that figure out work-arounds. Word gets around in the small world of beer, and people that continue to help out folks that work for them will be the ones that reap the rewards once this is all over.
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  7. unlikelyspiderperson

    unlikelyspiderperson Grand Pooh-Bah (3,520) Mar 12, 2013 California
    Pooh-Bah Trader

    Regardless of the merits of these folks complaints and their failings in understanding the program it does seem like its a poor fit for small breweries. The staff laid off are for the most part low wage front of house that are better off with the new enhanced unemployment benefits (theoretically, assuming they can access it).

    If the 1% interest is accurate though, it would make good sense to use that 200k to pay down debts carrying a higher interest rate
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  8. AZBeerDude72

    AZBeerDude72 Initiate (0) Jun 10, 2016 Arizona

    Exactly... There is always a new way to skin a cat.
  9. officerbill

    officerbill Initiate (0) Feb 9, 2019 New York
    Society Trader

    You're right. That can make financial sense and I would have a different opinion of them if that had been their intent (debt restructured to avoid bankruptcy), but it wasn't and now she's upset that they were not able to game the system.
    They wanted to wait until Maine was ready to give the go-ahead to resume full operations then take out the loan to cover their normal operational payroll without having to pay it back.
  10. mikeinportc

    mikeinportc Grand Pooh-Bah (3,139) Nov 4, 2015 New York
    Pooh-Bah Society

    Yep. Read the fine print. How old do you have to be to know that? :wink:
    There is one point of understandable confusion, that I've been wondering how long before it snags somebody. A: Now. - Quicker than I thought.
    Small businesses have to keep people on the payroll to have it forgiven. Big businesses do not. Not sure where the line is.:thinking_face:
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  11. Singlefinpin

    Singlefinpin Pooh-Bah (2,108) Jul 17, 2018 North Carolina
    Pooh-Bah Trader

    It seems as if they could've used those furloughed employees to make much needed hand sanitizer?
    I know some breweies are doing this, and it accomplishes several goals that help the brewery, the employees, and the public.
    If I could find sanitizer I would buy it, especially if I could buy fresh beer at the same time!
  12. MikeSilva

    MikeSilva Initiate (0) Apr 12, 2020

    The point of this loan program is not "fine print". It's literally called the "Paycheck Protection Program". Not the "Lazy Moralizing Small Business Owners Who Miss The Point, Because They Never Had an Econ Class and Want to Time the Rebound Program".

    This is the helicopter drop of cash to stave off the Depression, by sustaining employee incomes, thereby keeping these things called "consumers" and "aggregate demand" in the economy, so it doesn't fully implode.
    #12 MikeSilva, Apr 12, 2020
    Last edited: Apr 12, 2020
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  13. honkey

    honkey Maven (1,314) Aug 28, 2010 Arizona

    Most breweries are not equipped to making effective sanitizer. One of the breweries that got a lot of attention (and a lot of other ones that have made sanitizer) using Peracetic Acid. The overwhelming majority of breweries uses PAA and its great for surface sanitation on a well cleaned surface. However, it breaks down and loses its effectiveness after it has been exposed to oxygen. If you dilute it to a proper strength with water, it might be effective for up to a week, but normally it’s more like 3 days and the only way to test it is to use test strips which few people bother with since it’s easier to mix new every day. It is not a good choice for a hand sanitizer... that’s not the application it was made for. Hands are never as clean as a smooth surface cleaned with industrial cleaners like caustic at 170°F. Furthermore, no one at home will have a way of testing how long it remains effective so after a few days, you might as well be spraying water onto whatever surface you’re trying to sanitize. If you have access to a still or isopropyl alcohol, then sure, go for it with the sanitizer. There’s easy to follow guidelines.

    This is simply not the time for a bunch of people in the alcohol industry to give health advice or products to people.
  14. thedaveofbeer

    thedaveofbeer Savant (1,159) Mar 25, 2016 Massachusetts

    I guess it is low tide at Rising Tide Brewery..... I will see myself out
  15. Scrapss

    Scrapss Pooh-Bah (2,158) Nov 15, 2008 Pennsylvania

    I have a feeling that informed people will vote with their wallet at this point. Been nice knowin' ya, R.T. ... glad I got a tick on a few of your beers before this interview...
    ChicagoJ and officerbill like this.
  16. ClePaul

    ClePaul Initiate (0) May 30, 2013 Ohio

    CBS? I had my last 17 last night. Who remembers the Mountie?
  17. lastmango

    lastmango Maven (1,371) Dec 11, 2014 Pennsylvania

    The PPP is primarily meant to save employee jobs and keep the business operational. This owner seems to want more flexibility to use these funds. Well, too bad. Not what the plan is designed for. If you have problems that are outside of this issue then talk to your banker. There are other programs that banks are offering to keep their customers afloat. BTW . . . I work at a bank that just rolled this program out along with others.
  18. honkey

    honkey Maven (1,314) Aug 28, 2010 Arizona

    Yes you can find breweries making hand sanitizer. How many of them have a tested product that is ACTUALLY safe to use? The ratio is low. Those articles don’t say what their sanitizer is made of. “Many brewers come from a chemistry or engineering background...” Probably not as many as you think firstly, and I worked for a brewery run by engineers. That didn’t come anywhere near qualifying them to make sanitizer. The brewery failed in part because of decisions that were made that prevented effective sanitation in fact. Also, many (maybe even MOST) commercial craft brewers these days were just homebrewers for a few years. Selling sanitizers that are only effective for a short period of time with no way to verify is worse than selling no sanitizer at all.
  19. Newport_beerguy

    Newport_beerguy Pooh-Bah (1,774) Feb 24, 2011 Rhode Island
    Pooh-Bah Trader

    That's disappointing. Rising Tide always seemed to do the right thing early on when I visited them consistently in Portland in the early aughts when they were the only game in East Bayside, before Bissell Brothers and the group of newer brewers popped up.
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  20. Singlefinpin

    Singlefinpin Pooh-Bah (2,108) Jul 17, 2018 North Carolina
    Pooh-Bah Trader

    I only know from my own experience and the few brewers I've talked to here in NC they all came from a science background, engineers, chemists, even environmental sciences, which is by no means a huge cross section of the industry.
    You are right, if a brewery fails due to sanitation? Then it deserved to fail. Even most home brewers know that cleanliness is the most important aspect of brewing.
    Or, as I like to quote, "Cleanliness is next to Godliness." Rule number one.
    Here in the USA Anheuser Busch is making hand sanitizer under WHO rules and guidelines to be sold at cost or free.
    You are exactly right. Supposedly, hand sanitizer is a product that is regulated by the FDA. Without regulation then these products could be harmful even.
    Hopefully in these trying times we, all of us, can figure out some ways to all be healthier.
    Just like with facemasks, the opinions of what works and what doesn't is a moving target.
    My original post was a little tongue in cheek, hand sanitizer AND beer, one stop shopping! LOL!
    As I said I am no expert. Maybe more of a not so funny stand-up comedian.
    But if there is a healthy solution to a problem that keeps people working? Then I am still in favor of it.
    If, breweries and the FDA can work all this out. Bravo!
    #20 Singlefinpin, Apr 13, 2020
    Last edited: Apr 13, 2020
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  21. nc41

    nc41 Initiate (0) Sep 25, 2008 North Carolina

    My daughters hours were cut in half, her employer applied for the grant, he’s an eye surgeon. His intention when approved is to bring everyone back full time even if there’s no patients, they can play cards all day. Meanwhile he’s paying every penny of their health and dental care until they’re back up on line.

    That’s what it’s designed to do not allow a business to seed their own bank account.
  22. Brewday

    Brewday Initiate (0) Dec 25, 2015 New York

    From what i read, they can lay employees off but have to rehire by june 30th to forgive all or most of the loan. At 1%, this is a great time for a brewery that has capital to take a loan.
  23. Giantspace

    Giantspace Pooh-Bah (2,757) Dec 22, 2011 Pennsylvania

    She should have just shut her mouth and put the $ in a high yield savings account, would have made a few $ and still been able to pay back the loan. The way the UC along with the cares act is set up its more beneficial for your workers to let them live off these programs as many end up making more than they were making.

    Stay Safe Be Kind

  24. nc41

    nc41 Initiate (0) Sep 25, 2008 North Carolina

    I reread that again, and it’s clear they’re misusing the money. They look at is as a loan instead of a grant to keep all her employees on board. She said that money was 2 1/2 months payroll, so pay them. They’re paying themselves first, that’s my interpretation of that.
  25. mikeg67

    mikeg67 Pooh-Bah (1,949) Nov 12, 2010 New Jersey

    They are lucky they got a loan. I know many small business people who are trying to get a loan and can't. The loan itself is idiotic. Who is going to pay employees while there is no work. Besides, many employees receive unemployment higher than salaries right now.
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  26. t420o

    t420o Initiate (0) Jul 16, 2009 Colorado

    @officerbill and @AZBeerDude72 hit the nail on the head. And what a surprise that CBS would have an article title that’s meant to make the PPP program look bad.
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  27. nc41

    nc41 Initiate (0) Sep 25, 2008 North Carolina

    The extra $600 is creating some problems.
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  28. ChicagoJ

    ChicagoJ Grand Pooh-Bah (3,881) Feb 2, 2015 Illinois
    Pooh-Bah Society Trader

    The impact would have been much stronger short term and long term to give $6,000 to every American ($2 trillion). Ditto the similar "bailout" of 12 years ago.
  29. readyski

    readyski Maven (1,399) Jun 4, 2005 California

    Totally agree. But then our puppet masters would lose some (more?) control over where that plunder went. Again.
  30. readyski

    readyski Maven (1,399) Jun 4, 2005 California

    And if this thing lasts longer than 2.5 months (already 1), that "deal" makes even less sense.
    ChicagoJ likes this.
  31. jjboesen

    jjboesen Pooh-Bah (1,992) Feb 1, 2002 Maryland

    Yuengling survived Prohibition by making soda. Perhaps, these small brewers can use their facilities for something else?
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  32. lastmango

    lastmango Maven (1,371) Dec 11, 2014 Pennsylvania

    I believe they also made ice cream.
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  33. Rekrule

    Rekrule Initiate (0) Nov 11, 2011 Massachusetts

    Maybe don't just fill shit out and understand what you are applying for first? I'm a fan of rising tide but come on. You got the thing you wanted and now need to bitch about the stipulations?
  34. biermark

    biermark Crusader (483) Sep 9, 2008 South Carolina

    Instead we have Flying Saucer. Sounds like its mostly the same concept.

    Exactly - they didn't want to bring employees back to make less than unemployment - so delay 2 months until the extra $600 expires. Gaming.
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  35. cromL

    cromL Initiate (0) Jul 31, 2020

    Oh, Yes, the quarantine hit small businesses hard and I see it. My neighbor also owns a bar and he closed it, opened it several times, then started taking out loans to pay employees. But he never used Paycheck Protection loan, because he also read a lot of articles on this topic and there weren't not too many good reviews... There is practically no work, so you don't even know what to do in this situation.
    #35 cromL, Jul 31, 2020
    Last edited by a moderator: Jul 31, 2020
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