The Williamson County health care company Fast Pace Urgent Care received one of the state’s largest loans through the Paycheck Protection Program, but has also laid off more than 150 workers.
The Paycheck Protection Program is a $650 billion federal initiative designed to help businesses pay employees during the coronavirus pandemic. If businesses use most of the money to pay workers and maintain the pre-pandemic workforces the loan will be forgiven.
Fast Pace Urgent Care received between $5 million and $10 million through the Paycheck Protection Program.
The largest possible loan through the Paycheck Protection Program was $10 million. In March, the company laid off 166 people across the state, including a small group of employees at the central office in Franklin.
The U.S. Small Business Administration recently released details about some of the largest loans issued through the Paycheck Protection Program. Some companies in Tennessee are also required to notify the state if they lay off more than 50 employees so the state can provide resources to workers. At least eight organizations from Tennessee, including Fast Pace, are on both lists.
In the last several months, the rate of large layoff notices increased substantially. Employers have already reported laying off more than 31,000 employees in 2020. Employers only reported about 7,800 layoffs in 2019 and about 4,392 in 2018.
In March, Fast Pace notified employees at central offices about a small round of initial layoffs. A former employee at the Franklin offices said the company didn’t provide clear information about why the layoffs were happening, whether the layoffs were permanent or how widespread the layoffs would be.
In a letter to the Tennessee Department of Labor and Workforce Development, the company described the layoffs as temporary. About a month after the initial layoffs, the company provided a letter to the former Franklin employee stating the decision was permanent.
The letter noted that COVID-19 crisis was the reason for the workforce cuts. Fast Pace didn’t respond to questions about the layoffs or the PPP loan.
Many health care businesses have incurred huge losses during the coronavirus outbreak as patients delay elective medical procedures until the coronavirus pandemic subsides.
An April analysis by the Tennessee Hospital Association estimated that Tennessee hospitals were losing about $1 billion per month because of the coronavirus pandemic. Health care providers—including Fast Pace—were able to turn to telehealth to treat some patients, but in most cases that didn’t make up for the decrease in in-person visits.
Despite the large number of layoffs, Fast Pace seems to be expanding. The company plans to open nine new clinics between July and September. Fast Pace is currently advertising more than 100 job openings on its website, mostly for clinical roles.
The Paycheck Protection Program is intended for small businesses. According to the company’s LinkedIn page, Fast Pace has between 1,000 and 5,000 employees. Businesses can be classified as small based on the number of employees or the average annual revenue.
In addition to Tennessee, Fast Pace has locations in Mississippi, Kentucky and Louisiana, but the company did not file mass layoff notices in those states.
Laying off workers doesn’t automatically disqualify businesses from loan forgiveness. The federal government reduces the forgivable portion of the loan if a company’s workforce falls below pre-pandemic levels. However, companies can hire new employees to get back to a full workforce.
Any portion of the loan that is not forgiven has an interest rate of 1%. In addition to payroll, companies can spend some PPP money on mortgages, rent and utilities and still qualify for forgiveness.
Fast Pace Urgent Care was one of at least seven organizations in Tennessee that received a large loan through the Paycheck Protection Program and notified the state of substantial layoffs last spring.
The Chattanooga company Vision Hospitality received more than $5 million, but had to lay off more than 750 workers in March. The Nashville Symphony and the Tennessee Aquarium, based in Chattanooga, both received more than $2 million and eventually laid off over 100 workers each.
Earlier this spring, many small business owners who couldn’t get loans during the first round of PPP applications protested large loans to companies like Shake Shack and J. Alexander’s. Those companies ultimately returned their PPP loans after regulators determined they didn’t qualify for the program.