Sparks engineering company: With PPP loan secured, ‘future will be OK’
Special to the NNBW
SPARKS, Nev. — Nate Robison, president and principal engineer at Robison Engineering Company in Sparks, gets a bit choked up when discussing how the staff at City National Bank helped his firm secure a Payment Protection Program loan.
Robison Engineering employs 30, with 22 full-time salaried employees. All 22 salaried employees slashed their pay during the mandatory stay-at-home directive in anticipation of dwindling revenue and evaporating cash flow. The pay cuts allow the company to continue operating in the face of an anticipated 25 percent or greater dip in revenue.
The federal PPP loan will help Robison Engineering stay solvent for the next three years, Robison says.
“Seventy five percent of all our business is payroll,” Robison says. “Things will change, but the future will be OK. Robison Engineering will have the same staff at the end of this pandemic that we went into it with, and I am very proud of that.
“We weren’t in a state of desperation,” he adds. “Unlike a lot of employers, we weren’t forced to stop (working). But it’s going to be a tough year.”
While Robison Engineering is a profitable firm, Robison notes, it took seven long years to establish the financial stability it enjoys today. It never had a large war chest of cash reserves because it’s highly invested in its employees.
“When we send out $.75 of every dollar we bring in to payroll, we are vulnerable,” Robison says. “We never saved a lot because our company is for the benefit of its employees. The amount of the loan will absolutely make us financially secure for about three years of our anticipated free excess cash flow.”
According to loan terms, 75 percent of the PPP loan must be used for payroll within the first eight weeks. Robison says that salaried employees will get close-to-normal wages once the funds land.
“We are compelled — happily — to give 80 percent of our staff a raise for at least eight weeks,” he says. “The coolest thing is that we now can do life stuff, like maybe refinance, which they wouldn’t necessarily qualify for under starvation wages, or pay off debt, which funds banks so they have cash on hand and can give loans to other people.”
Securing PPP loans hasn’t been easy for regional banking executives.
PPP loans became available in early April after the March 27 authorization of the $2.2 trillion federal CARES Act, and by mid month the pool of $350 billion was exhausted, leaving many small businesses without a vital lifeline.
However, a second round of funding is slated to add an additional $310 billion to the program.
Nationwide, City National Bank helped more than 11,000 clients — Robison included — secure PPP loans for more than $4 billion, says Paul Stowell, Nevada regional executive for the bank.Other Northern Nevada enterprises that City National helped navigate the loan process to conclusion include Ametherm, an electronics manufacturer in Carson City, and the nonprofit Nevada Museum of Art in Reno, among others.
Bruce Ford, Nevada regional banking manager for City National Bank, says the bank decided at the onset of the COVID-19 crisis to provide white-glove service for its customers rather than having them try to complete the onerous application process on their own.
“We believe in Nevada and support Nevada businesses, and we wanted to make sure this went as well as it could under the circumstances,” Ford says. “The program evolved frequently, and we had to evolve and change with it.”
Stan Wilmoth, president and chief executive officer of Heritage Bank, says there simply aren’t enough hours in the day to help those seeking PPP loans.
Heritage Bank helped many of its customers secure loans by providing a document checklist and combing over applications to ensure they were complete and correct prior to submission, especially with all the changes that took place during the application process.
Being a smaller community bank allowed Heritage staff to work more closely with its commercial customers to get applications completed, Wilmoth says.
“We know our customers well, so we were able to reach out early and start the process and get them in the queue,” he says. “This allowed us to prove we are who we say we are — we are partners with our customers, and they are first in our minds.”
Robison says the staff at City National also worked tirelessly to help his firm and others navigate the loan process.
City National’s Reno branch manager, Stacy Asteriadis, contacted Robison Engineering about the PPP at the start of April. Since, Robison says, bank staff have worked almost non-stop to help guide his firm through the application process.
“I have never seen anything like it and probably will never see anything like it again,” he says. “I hope our bankers are not put in this position again where they have to digest legal documents on their own during overtime hours so that all of us who rely on them can fill out forms correctly.
“The staff at City National Bank was extraordinary,” he adds. “We migrated to them four years ago, and we didn’t know much about them except our impression of professionalism, which was borne out beyond our wildest dreams. They (helped us) fill out the forms gratefully, pleasantly, correctly and the loan was approved.
“It wasn’t easy — that fund ran out, and there were banks that tried and failed to get their customers through this program. City National met the challenge.”
Heather Ashbridge, who started with Nevada State Development Corporation in 2008, previously served in several roles with the organization, including assistant vice president and loan officer. She is based in NSDC’s Reno office.