Industry Professionals Comment on PPP From New Stimulus Bill

Thanks to contributing writer Eric Pereira for this timely article!

The COVID-19 pandemic was a detriment to most types of businesses, and funeral homes/crematories were no exception. Fortunately, another stimulus bill, the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, could offer deathcare organizations the opportunity to apply for the Paycheck Protection Program (PPP) again.

“I estimate a high percentage of funeral home and crematory businesses that were eligible applied for and received PPP loans,” said Barbara Kemmis, Executive Director of Cremation Association of North America.

Certified Management Consultant David Nixon said he advised all of his clients to apply, and to his knowledge they all received some funds. “I suspect that 40-60% of funeral homes applied and received the PPP money,” he said in regard to funeral homes across the country.

Kemmis mentioned that generally speaking, nonprofit cemeteries incorporated as 501(c)13 were excluded from the first round of PPP funding for 501(c)3 entities, but may qualify to apply for loans from the latest relief bill.

“It is too soon to tell if CANA members will apply for more funding or new loans,” she said. “The SBA has not yet updated applications to determine how newly eligible organization can apply to stay in contact with your bank and accountant to determine whether you are eligible and when you can apply.”

Although funeral homes were not in as dire a situation as restaurants or event venues, they still felt the effects of COVID-19.

“These loans were particularly helpful for these essential businesses as revenue decreased with gathering restrictions, yet demand for services increased as deaths increased,” Kemmis said. “The PPP dollars allowed funeral business to maintain staffing levels, and sometimes increase staffing, to meet demand. The expansion of assistance in purchasing PPE is particularly welcome. CANA members are by and large small, family-owned businesses and purchase PPE on the open market. Prices have increased significantly even though production has increased.”

Adam Sanden, President of Brunner Sanden Deitrick Funeral Home & Cremation Center had similar thoughts as services make up a vast majority of their revenue. Once COVID-19 hit, it was all direct burial or direct cremation instead, with most families opting to grieve their loved ones privately, Sanden said.

He saw their worst second quarter in about 25 years. “If there’s a second round and we qualify, absolutely,” he said to applying again.

Sanden, who is also a CPA, said they applied for PPP which allowed them to cover their overhead during months they were losing money and paying staff even when they couldn’t work.

Nixon said many funeral home owners he spoke with were reluctant to apply for the first round of PPP, so he believes that fewer will apply for the second round.

“From what I have seen via client financials and in talking with other funeral home owners, it appears that funeral businesses are more stable at this point as compared to other service businesses,” Nixon said. “For many, total calls rose significantly in the last quarter of 2020 and even though the average revenue per call fell in 2020, their profit levels rose sizably — thanks to the added calls and controlling expenses.”

Tim Bridgers, Senior Vice President with Live Oak Bank said they are closely monitoring the developments of the recently passed legislation which reopens PPP. “At this time, official details from Treasury and Small Business Association have not been finalized but we will keep our customers informed as final rules and guidance are announced,” he said.