How the Paycheck Protection Program Helped Nashville’s Music Industry
From bartenders to session musicians, the impact of COVID-19 on Nashville’s best-known industry has been immense.
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- Andrew Kintz is Executive Vice President, Private Client Services and Music Industry Group, for First Horizon Bank.
Healthcare is a key driver of Nashville’s economy, but it is the music and entertainment industries that are the heart and soul of our city. This is why the COVID-19 pandemic has had such a devastating effect on the financial (and physical) health of our city – and why the Small Business Administration’s Paycheck Protection or PPP program is so essential in helping music and entertainment business owners to survive this crisis. .
Before COVID-19 hit Nashville, our music and entertainment businesses were flourishing. Artists, musicians and songwriters – in musical genres such as bluegrass, country, gospel, R&B, rap, rock – were busy writing and recording the next hit song. Our world famous honky tonks were packed with locals and visitors from out of town.
When stay-at-home regulations were put in place to reduce the spread of COVID-19, much of that activity came to a screeching halt – and the fallout was immediate. Thousands of hard workers have lost their jobs or been put on leave. Lower Broadway has become eerily quiet and the music in most businesses has literally stopped.
The heart and soul of Music City
The importance of the music and entertainment industry to the City of Music cannot be underestimated. A 2013 study by the Nashville Chamber of Commerce found that the music industry has helped create and maintain 56,000 jobs in the Nashville area. The industry paid out $ 3.2 billion in annual wages and salaries. It directly contributed $ 5.5 billion to the local economy and generated an additional $ 4.2 billion in indirect spending for a total of $ 9.7 billion in economic benefits for the metropolitan economy of Nashville.
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If the same study were done today, the numbers would be much higher. Since the days of the House’s research, recorded music sales in the United States reached $ 11.1 billion in 2019. Amazon, Apple and Spotify have established a significant presence in Nashville. Music industry startups in our city continue to grow and add new, high paying jobs to their payrolls.
PPP to the rescue
COVID-19 puts many small businesses and the livelihoods of their employees at risk. Fortunately, the PPP initiative has provided much-needed capital to help these companies and their employees stay afloat. PPP, which is part of the Coronavirus Aid, Relief, and Economic Security Act enacted on March 27, authorized $ 349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Small businesses use the funds for payroll and benefits, mortgage interest, rent, and utilities. Congress also approved an additional $ 310 billion for the program under the Paycheck Protection Program and Health Care Improvement Act, bringing total P3 funding to $ 650 billion.
First Horizon National Corp. immediately understood the importance of supporting as many small businesses as possible through PPP. To meet the demand for loans, our team, led by Carol Yochem, President of the Middle Tennessee region, quickly trained hundreds of bankers to handle various roles in the multi-stage PPP lending process.
As of May 8, First Horizon Bank’s Music Industry and Private Client Services groups had processed more than 300 PPP loans worth around $ 40 million. Many of those dollars went to small businesses – from sole proprietorships to companies with 100 employees – in the music and entertainment industries. The businesses included artist management companies, concert halls, festival companies, coach operators, stage and lighting vendors, booking agencies and music publishers.
In total, First Horizon Bank has helped more than 14,500 small businesses secure $ 1.9 billion in P3s, which have helped maintain nearly 313,000 jobs. About 20% of guaranteed loans went to designated businesses owned by women, minorities and low to moderate income sectors.
The beauty of the music industry is that every dollar spent benefits many Nashville employees. From songwriters to bartenders on Lower Broadway, from session musicians to ticket takers at the Ryman Auditorium, everyone in this ecosystem makes a living from songs created in Music City. And that’s something all Nashvillians should want to protect.
Andrew Kintz is Executive Vice President, Private Client Services and Music Industry Group, for First Horizon Bank.