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New York amusement operators get update on federal business loans

Amusement machine operators got an update last week on government loans designed to help businesses weather the coronavirus pandemic during a conference call hosted by the New York Amusement and Music Operators Association.

April 13, 2020 by Elliot Maras — Editor, Kiosk Marketplace & Vending Times

Amusement machine operators got an update last week on government loans designed to help businesses suffering from the coronavirus pandemic during a conference call hosted by the New York Amusement and Music Operators Association.

The association hosted the conference call in response to the number of members who have been raising questions about the new loan programs, said Ken Goldberg, association president.

To help answer questions about the new loans, the association reached out to Firestone Financial, said Dan Frank, executive director of the association.

Under the new federal initiative, known as the CARES Act, businesses will have access to money at low rates, allowing them to retain their employees to get through the present downturn, said Sal Cifala, head of sales at Firestone Financial.

"The communication (from the government) has not been ideal," Cifala said.

The CARES Act provision that focuses on loans to businesses with fewer than 500 employees is called the paycheck protection program, for which a business can apply for up to $10 million to cover payroll and other expenses through existing Small Business Administration lenders. 

"Companies will have the ability to access a portion of money which is predicated on your monthly payroll cycle," Cifala said. As an example, for a $50,000 monthly payroll, the company would be eligible for a loan of two and a half times that amount — $125,000, he said. This would be a 12-month loan at 1%, with six months deferred. The borrower would be responsible for 18 monthly payments on the loan.

Based on how the funds are used, Cifala said the borrower can have a portion of the loan completely forgiven.

Amusement operators should keep in mind that they may have customers who are interested in the loans, Cifala said. "Your partners could actually get some assistance as well," he said.

Other loans available

Questions were also raised about the Economic Injury Disaster Loan Application, or EIDL, another loan under the CARES Act. Under this loan, up to $2 million can be borrowed for business expenses at low interest, with $10,000 available in the short-term.

One listener on the call said he has already received his $10,000 grant after applying for an EIDL loan.

At the time of the conference call, most banks were still waiting to learn what their own responsibilities will be under the PPP program, Cifala said.

Firestone is also providing customers a 90-day deferral on its loans with no fees, Cifala said. The deferred days will be added to the back end of the loan. In the meantime, the company is looking at other things it may be able to do for operators.

He encouraged borrowers to think about what the new norm will be from a revenue perspective once the present downturn has ended. "You're really going to have to put some time and effort into thinking about where your business is going, and what you need to do to structure everything to be successful," he said.

"When you walk into a center, are people going to be gung ho and start playing games, pressing buttons without wondering if that stuff has or hasn't been sanitized?" Cifala offered as an example.

Association defers sales tax

Goldberg said the New York AMOA successfully lobbied the governor to defer a quarterly sales tax for bars for a quarter.

The deferral of the sales tax was a direct result of the New York AMOA's efforts, which included editorials in the Daily News, The New York Post and Crains New York Business, including one from a New York Ciity council member.

A small bar can pay as much as $10,000 while a larger one can pay $25,000 or more, Goldberg said. He advised that New York AMOA members tell their customers that the association was responsible for this tax delay.

Andamiro USA sponsored the conference call.

About Elliot Maras

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Elliot Maras is the editor of Kiosk Marketplace and Vending Times. He brings three decades covering unattended retail and commercial foodservice.