Transcript

Speaker 1:

Welcome to the Arkansas Inc. Podcast where we discuss the latest topics and trends in economic development with subject matter experts and influencers from across the nation and around the world.

Clark Cogbill:

Welcome to the Arkansas Inc. Podcast. My name is Clark Cogbill and I'm Director of Digital Marketing for the Arkansas Economic Development Commission. As we record this podcast, we find ourselves in unprecedented times in Arkansas. Across the nation and around the world as the coronavirus pandemic continues to disrupt our lives as both a health and economic crisis. Just about every news story has something to do with the Corona virus and there's a lot to sort through. Today we want to share some specific information about the resources that are available to Arkansas businesses and to those Arkansans who have lost their jobs as a result of the coronavirus pandemic. We've got the perfect person to address those topics. Our guest today is Mike Preston, who serves as both Executive Director for the Arkansas Economic Development Commission and as Secretary of Commerce for the state of Arkansas. AEDC is one of 10 divisions that make up the Arkansas Department of Commerce.

Clark Cogbill:

Secretary Preston has a unique perspective on our state's economic situation. Mike, welcome to the Arkansas Inc. Podcast.

Mike Preston:

Clark, thanks for having me.

Clark Cogbill:

Mike, many businesses and business owners find themselves in a really tough spot right now. People have been advised to stay at home most of the time and to avoid groups larger than 10. As a result, as we know, folks just aren't getting out to shop. All appointments are being canceled and folks just are not out spending money and so naturally sales are down and many Arkansas businesses are hurting. What advice do you have for businesses across the state that are feeling the financial impact?

Mike Preston:

Well, Clark, this is going to be a long-term situation for not only the state of Arkansas but the country and really the world because you've seen the global supply chain impacted. When we look back to where this started back in China, we started seeing the effects in the US after they shut down a province there to try to contain the virus. We knew there was going to be a global impact just because of the issue there in China and seeing their economies slow. When the virus jumped across borders and went across the oceans and started impacting other countries, we realized this is going to impact us as well. Then the US started taking steps to prepare. Where we're at right now is we want to make sure that we are doing everything we can to flatten the curve.

Mike Preston:

That's why you're seeing the advice from Governor Hutchinson and from Dr. Smith, the Secretary of Department of Health, making sure we follow these guidelines put out by the health department, put out by the CDC, so we can flatten the curve. The quicker that we can flatten it and contain the virus, we can get back to the economic realities of Arkansas and get this economic engine humming again that was going along so well for so many years, but we got as pause and realize how do we do that and how do we look for the long-term and how can we help businesses mitigate this risk and this situation.

Mike Preston:

They've come in by no fault of their own and how can we propel forward? We've come up with some programs within the Arkansas economic development commission to be able to support those businesses. A big thank you to Governor Hutchinson for setting aside funds from his Quick Action Closing Fund as well as Attorney General Leslie Rutledge who set aside some funds from the Attorney General's office to be able to help those businesses. Clark, if you'll allow me, I'd love to talk in a little bit more detail about those.

Clark Cogbill:

Absolutely.

Mike Preston:

If you look at what we're, first of all if you're a small business out there and you're trying to figure out what do I do now? I've ordered to be closed because of I'm a restaurant and we can't seat people or I'm a health club, a gym and I can't bring in clients or a hair salon. I'd say first thing you need to do is go to your bank, talk to whoever your lender is. We've been partnering with Arkansas banks and they're very committed. They're going into this in a very good financial situation, thanks to the good economy. They have dollars to lend. They're looking to work with you whether you need to refinance or whatever it is, just talk to your local banker and see if there's options available.

Mike Preston:

If for some reason that doesn't work, then obviously there's other funds that we want to make available. The SBA is probably the go to there. A federally funded program because of the Cares Act and there's a lot of money flowing through the SBA right now. You can get very low interest or loans up to $2 million where you run into a little bit of maybe, slowdown in that is it's because they have such a high volume. You're looking at three to four weeks of wait time to get your SBA loan. We realize that not everyone has that working capital on hand. What we've set up is a Bridge loan through the economic development commission. Again, thanks to the governor and the attorney general for the funds that they put into this. We've set up a $25,000 up to amount for businesses that they can come to the economic development commission and actually apply for that loan.

Mike Preston:

It's 0% interest, 12 months, no payments. This is that working capital that hopefully can bridge you from where you are today or where you were about a week ago to get you to that SBA loan where you have the additional funds that are going to see you through the month of April and into May when hopefully we're on the backside of this and our economy is starting to come back to life again. We have those funds available. The other side of that, we also have a Loan Guarantee program. If you've talked to your bank and they're saying, maybe we could do this but we need a guarantee on this, we're willing to guarantee up to 80% on a loan all the way up to $250,000 and again, the terms on that would need to be set forward by the bank.

Mike Preston:

We're just willing to go out there and guarantee that. Those two programs are ones that are immediately available. If you just go to our website, arkansasedc.com/covid19, all of your resources are there. You can call our office as well. The easiest way to remember, it's just 1-800-Arkansas and you'll get someone there at our office or obviously you can understand there's a high volume of calls, leave a message. Send an email is probably the easiest way. If you go through our website and someone on our business development response team is going to get back to you. Those programs are readily available right now. We encourage you to take a look at our website. Obviously look at the SBA website as well. Those are where the federal government has a lot more money than we do in the state government.

Mike Preston:

We have to balance our budget. We can only spend those funds that we have available and we're in a budget crunch ourselves. We're looking to cut where we can. I think it says a lot about the governor and his leadership and the attorney general that they were able to put funds into this time to help those businesses. We recognize that there those issues and challenges are out there. But go to those websites, check those things out. We want our Arkansas to know that there are resources available to help you through this difficult time.

Clark Cogbill:

Mike, what would you say to a business? How do we know if an SBA loan is more appropriate or if they should pursue these programs at the state level?

Mike Preston:

I think it's appropriate for you to look at all of them. I think SBA obviously being the bigger pot of money up to $2 million, we certainly don't have that at the state level. Explore all options. Go ahead and put that application in there for the SBA loan. Obviously we need to know if those are funds that are coming in. The SBA is going to ask what outstanding debts do you have out there? Keep that in mind when you're looking for it but I like to think that we can move very quickly at the Economic Development Commission. We can turn those loans, those requests around pretty fast if you need that access to the capital. Our goal here is we want to see that business stay open. We want to see those employees that you have stay employed. What we're asking for when we're saying, look, we're going to be able to give you 0% interest loan at 12 months no payment, obviously we want to see the payment on the backside of that, but we want a retention of your employees.

Mike Preston:

Tell us how many employees you have, how many of you are able to keep through this and because of this loan you're going to be keeping on. We don't want to see more people moving to the unemployment insurance. We want to see people employed, working if they can obviously in a safe environment, not going against any of the CDC guidelines or health department guidelines, the best we can keep people working, let's do that so we're going to put a job retention component into those loan programs.

Clark Cogbill:

If a business is close to having to lay off employees, they need to call us right away, learn what they can about our programs, maybe get some loans in place to save those positions.

Mike Preston:

That's right. We want to help that business to survive but we also want to help your employees. We know you don't want to have to lay folks off. It's a tough decision to make and if we can help mitigate that risk and that concern that's really what we want to do. We want to see our Arkansans continuing to be able to work.

Clark Cogbill:

You mentioned phone number and email. I'm just going to reiterate those. You can call Arkansas Economic Development Commission 501-682-1121 or toll free 1-800-ARKANSAS. The email address is COVID19.businessinfo@arkansasedc as in economic development commission.com. Again, that email address is [email protected]. Mike, I know there's also the Community Development Block Grant program. Tell us a little bit about that.

Mike Preston:

This was something that the federal government did very early on and that was allow us to use up to 15% of our existing community development block grants for COVID-19 assistance. We were able to through some existing funds that we had and reallocation of resources carve out $12 million that we've put into this. We are looking to provide some general assistance. What we're trying to do is get some funds out to rural hospitals and health clinics around the state who are being impacted by COVID-19. We want to make sure that can help them get the equipment they need if they need to set up additional triage centers at their hospital, whatever it is that those hospitals need we have some general assistance funds through our Community Development Block Grant that are readily available immediately. We've been working with the hospital association, the rural hospitals to find out exactly what the needs are and try to get some of those funds out.

Mike Preston:

Then also we're going to be able to use some of those funds for economic development purposes. Just like we talked about on the Quick Action Loan Program, we're going to be able to guarantee some loans with those funds. We'll have additional funds available through the community development block grant. Part of that's going to be tied to the cares act. We're still waiting on some guidance from the federal government and HUD who is the overseer of those funds. But once we have a clearance on that, we'll be able to get those funds deployed down the street. But those immediate general assistance funds are going to be sent out to those hospitals to hopefully mitigate some of the costs that they're having right now.

Clark Cogbill:

That's great. It's been amazing to watch part of our team at AEDC, our business development team and our community development team just shift gears and really go into this role of helping businesses, taking calls, making calls, responding to emails, trying to help these businesses, point them in the right direction, help them get these loans processed for these businesses that are in need.

Mike Preston:

Clark, I can't say enough about the team at the Economic Development Commission and throughout Commerce. In times like these, you really see what wonderful people you have working for you and with you and supporting the state of Arkansas. These folks are just wonderful individuals who have dedicated their time and their abilities to helping out businesses. We started this, we're going in, we're economic developers, we're always looking to recruit new companies to expand and realizing the challenging economic times we're about to face, I shared with our team, look all of our job descriptions have changed as of a couple of weeks ago. Our focus now is helping businesses here in Arkansas. How do we keep them open? How do we keep employees employed? The team has really risen to the occasion, even though a good portion of them are having to work remotely to make sure we're adhering to all the guidelines, our teams are working from home, answering those phone calls, answering those emails.

Mike Preston:

We've been able to work virtually with all of our teams who are pulling this together, making the recommendations on the loans and just responding to businesses. Making sure that we're that ear that they can talk through the issues that they're having or the problems and can be a point of as a resource for folks. I'm grateful to the team at the Economic Development Commission and again throughout commerce who are pouring their heart and souls into this. They're wonderful individuals and because of their hard work, we're going to see it through to the end.

Clark Cogbill:

Well, Mike, let's shift gears a little bit and let's talk about unemployment. There are a lot of people who unfortunately across the nation but also in Arkansas, are out of a job because of this economic downturn brought about by the coronavirus. What is the best course of action for those who find themselves unemployed today?

Mike Preston:

Well, Clark, let me first start again I appraised the team of the Economic Development Commission. I got to give praise to the team at the Department of Workforce Services who handles and processes all the unemployment claims for the state. They have literally been working around the clock seven days a week to handle and answer the volume of calls, and we're bringing back more staff who are working from home. We're bringing in others from other departments within Commerce to help handle with the volume. We've been looking at other agencies within the state government to be able to utilize some of their resources and people to handle the volume that's coming in and something like this you can't prepare for. This trumps anything that we've seen before in terms of 2008 recession or September 11th. The ones that come to immediate mind.

Mike Preston:

But to put it in perspective, two weeks before the coronavirus hit, and we were in a normal economic expansion like we've seen the last five years we were about a thousand maybe 1,100 folks who had filed for unemployment that week. This past week and our first full week of Corona virus effects seen throughout Arkansas. We had 30,000 applicants in one week. Anytime you go from a 30 times expansion, it's hard to deal with. Our teams have been working, as I said, round the clock to add capacity. We've added additional lines. We've added additional time to the website. The website was only Monday through Friday. We've expanded that to Monday through, excuse me, seven days a week and then the hotline we have up and running statewide. Back to your original question, what's the easiest way to go about it is going to the website.

Mike Preston:

If you are someone that has been laid off as a result of the coronavirus and you are looking to file for unemployment, just go to the website for unemployment insurance. That's ezarc, E-Z-A-R-C dot A-D-W-S dot arkansas.gov. That's the website you can go on there. File your claims online. I realize please be patient. The website is moving slow. But when you have 30,000 people trying to get on and do this all at the same time, it does slow it down. We have a hotline if you want to talk to a person, +1 844-908-2178 call that hotline. You can talk to a person and follow your claim that way as well. But for ease of doing it, I'd like to think that the website is the best way to do it. That website is accessible seven days a week, 6:00 AM to 6:00 PM. The hotline is available Monday through Friday, 8:00 AM to 3:30 PM. We're discouraging people from going in person to your local workforce office.

Mike Preston:

We obviously don't want to have the large crowds form there. Trying to keep it under 10. We want to keep you safe. We want to keep the employees safe and we're worried if our employees get sick these are the ones who are processing the claims so if they get sick and have to be out for two weeks or an extended period of time this slows us down in our ability to be able to process the claims. Our team, again, we're adding additional people, we're adding additional phone lines, we've beefed up the website. The governor has issued some waivers that are going to be very beneficial. Before you had to go in person to file your claim. That has been waived. You don't have to go in person, you can just do it online or do it over the hotline. You'd have to check in every week on a work search requirement.

Mike Preston:

That has been waived. Additionally, there was a week long waiting period that people would have to wait before that they could get their claims process and get their first check paid. The governor has waived that as well. We're averaging anywhere from about five to seven business days from the time you apply and are approved to the time you get your first unemployment check. That has been a tremendous help. A lot of folks are asking questions now about the Cares bill and the information that's in there that's going to allow for employees who are affected up to an additional $600 per week on top of their unemployment claim. You would go through the normal process of applying just as you would through the state, because we'll be receiving those funds and pushing that out. Again, if you are looking for the information related to the Cares act, you will go through the same process.

Clark Cogbill:

Okay, just to recap a few things, the best way to file your unemployment insurance claim is to visit the website, EZARC.ADWS.arkansas.gov and the hotline is +1 844-908-2178 and all of this information we've tried to consolidate on that website that Mike, you gave earlier at arkansasedc.com/covid-19. Check back often as new information becomes available. We're trying to keep that page updated so you can find links to SBA, you can find links to follow your unemployment insurance, you can find information on the quick action loan program and other programs out there that may be helpful to you to your employees.

Mike Preston:

That's correct. To wrap up, Clark I want to emphasize, and the Governor mentioned this recently in some of his remarks at his press briefing. First, I'd say continue watching the Governor and his press briefings along with Dr. Smith and other members from the Governor's cabinet. We're pushing out information as soon as we get it, realizing every day there's new information, things continue to change. Pay close attention to the governor and what he says and what Dr. Smith is saying related to this. If you have questions, don't hesitate to call us and we want to help you through it. But the Governor mentioned something the other day that we want Arkansans to work. We don't want all these folks on unemployment and we realize that the benefit package has just really been beefed up by the federal government.

Mike Preston:

We need Arkansans to work. If you have the ability to be able to go back to work safely, we want you to. We want folks out there working. There are businesses that are going to be hiring. There are folks that are in the critical supply chain right now that can't find enough people to work. There are jobs available and we would encourage those who have been laid off or looking to go out there and to continue to look for work. That's what's going to pull us out on the other side economically. These benefits will run out in the end of July and we want to make sure that before then that folks are back in the system working hard, paying taxes, doing everything that saw Arkansas rise to heights we've never seen before in terms of our economic prosperity as a state.

Mike Preston:

I think because of that, I think because of the tenacity of Arkansans and the passion that we have for work and for helping each other out and the love we have for our state that we will see that. We will see people going to back to work soon. We were sitting at 3.4% unemployment-

Clark Cogbill:

Record low unemployment.

Mike Preston:

Record low.

Clark Cogbill:

For a long time.

Mike Preston:

For a long time. I want to see us get back to there. We're going to have the jobs available. We're not going to slow down at the Economic Development Commission. We're still recruiting companies. We're still going to bring in more businesses. We're going to see our businesses expand because we are so critical to the rest of the country and the supply chain, not just in the essential services right now, but everything that goes beyond that and what makes Arkansas great. For those who are in this challenging time and are on unemployment, I just want to give you a little hope that these jobs are available. Don't stop looking for them. Go out there, be ready to work and I think together we're all going to get through this.

Clark Cogbill:

Mike, you mentioned the Governor's daily press briefings. An easy way to access that is to go to YouTube and search for Governor Asa Hutchinson and you will see a link to his live daily press briefings. They are doing those seven days a week and Dr. Smith is on there every day with the governor. To your point, they're very informative and he does an excellent job, the Governor does of keeping the citizens informed about what's going on. You've been on some of those and I'm sure you'll be on others.

Mike Preston:

We have and we're fortunate to have such a great Governor right now and to lead us to this time who is open, who's transparent about these things, who gets out there and gives everyone the facts and it gives them some calming reassurance that we're going to be okay and that folks are working on all the issues that people can think of. I know his team is working around the clock as well to handle all the issues that are coming our way and supporting the healthcare providers and I know they're working day and night to make sure Arkansans are healthy and we'll get through this.

Mike Preston:

The support is there. But yes, follow the Governor in his press briefings, very important to stay informed and stay tuned to him. If you can't watch them live, they keep the link up there for, a number of days, but you can go back later in the day and watch it if you can. But that's your best way to get the most accurate information out there that's possible. I know there's a lot of information flying around social media and other media today and if you want it directly from the source, watch the Governor and his briefings. It's very helpful.

Clark Cogbill:

Well, I want to thank our guests today, Secretary of Commerce and Executive Director of the Arkansas Economic Development Commission, Mike Preston. Mike, thank you for being with us today and thank you for your leadership during this challenging time. Let's plan on having you back on the Arkansas Inc. Podcast soon to talk about the expansion of our economy when we get past all of this and we look forward to that. Remember to visit arkansasedc.com/covid-19 to learn more about the programs we discussed today. My name is Clark Cogbill, Director of Digital Marketing for Arkansas Economic Development Commission and you've been listening to the Arkansas Inc. Podcast. Stay safe and well.