As it stands, attracting customers during several “phases” of reopening has been a challenge. Businesses have had to constantly update their marketing for what services they provide – Shipping? Roadside pickup? Shopping in person? Outdoor dining only? – and the new health rules that go with it.
“It’s another PR nightmare,” said Ann Leadbetter, who owns Meriwether Cider in Boise, Idaho, with her husband and two grown daughters. His business includes a tap room and a cider house from which they sell their own hard ciders.
But small business owners say the biggest obstacle today is the financial uncertainty that clouds everything.
I don’t know when they will be able to function “ almost normally ”
Leadbetter said she was grateful for the P3 loan she received because it helped her family stay in business. And she’s grateful that the federal CARES Act has relieved business owners from having to make payments on their other Small Business Administration loans for six months. His family had taken out two when they started their business. But they will have to start paying again in September.
“Like many businesses, we thought that by the time PPP funds were depleted and loan repayments were due again, we would be out of breath and able to function almost normally. even more in the fall, this is no longer the case. And I’m scared of what’s going to happen next. If we are to go back into full foreclosure, all bets are off, ”Leadbetter said.
“Nobody has a work plan”
Cliff Hodges, founder of California-based Adventure Out LLC, which offers courses and retreats in surfing, rock climbing, mountain biking and other outdoor adventures, has been leading his own survival adventure since March, when he had to temporarily interrupt his activities. .
The majority of its revenue is generated between May and October, but bookings for its peak season arrive in March and April. As a result, Hodges said, “Our regular bookings are down. And our corporate bookings are gone.”
After reopening this month, the company is experiencing a spike in demand as people want to go out after so many months at home. So Hodges is trying to hire a few more staff – to add to the majority of the employees he was paying once he got his P3 loan.
In addition to losing more money, Hodges fears receiving a bill from the state to replenish his company’s UI reserve account to cover some of the unemployment benefits received by employees after they were laid off. . While the federal government under the CARES Act has subsidized many of these extended benefits, it is up to individual states to determine whether employers will be required to pay additional payments. Hodges was unable to get clear guidance on how California will rule. And CNN Business has yet to hear back on the matter from the state’s employment development agency.
In the meantime, he hasn’t paid himself, noting that payroll, rent and utilities are high on his priority list. “I don’t see a short term future where I will get paid. I will be shocked if I am able to pay myself in 2020.”
‘A series of impossible questions’
Chris Morgan and Gerald Addison were scheduled to open their new Bammy’s restaurant in Washington, DC, by the end of March. This does not happen. They called for not opening days before the Washington government bans in-person meals.
But they decided to use a smaller staff than expected to make take out from mid-May. A few days later, they were allowed to start offering patio service. And, as of this week, indoor meals are now allowed. But they said they were not yet comfortable doing this for the safety of their staff and customers.
Indeed, restaurant owners and other businesses face “a series of impossible questions” as coronavirus cases increase in many places, Addison said. “It’s on everyone’s mind. It’s hard to ask someone out of unemployment and a week later things stop again.
Although they didn’t qualify for a P3 loan because they weren’t open for business earlier in the year, they took out the new employee retention credit, which gives them a quarterly tax credit. equal to half of the salary they pay to staff. The total combined credits cannot exceed $ 10,000. “It works well if you’re trying to test the waters and you don’t have a full staff yet,” Morgan said.
They currently pay five employees, but not themselves or their spouses. And having been in the restaurant business for years, they know how to handle lean.
One of their biggest financial concerns in the future is rent. They took over a pre-existing lease with six years remaining. “We are trying to find a way forward for [the landlord] understands that we are doing our best to pay for what we can, ”Morgan said.
What do we need next?
To thrive, small businesses need customers who are willing to spend and the confidence to leave their homes.
With historically high unemployment rates and a persistent and poorly managed public health crisis, both may be a way forward.
Small business advocates have been pressured to automatically cancel PPP loans under $ 150,000. And some are even asking that business owners be allowed to get a second P3 loan, as the program still had over $ 130 billion in funds left over the weekend.
But many small business owners prefer to avoid more loans, even if there is a chance that they will eventually be forgiven.
To the extent that the financial aid is greater, Hodges hopes it will come in the form of a grant. “It’s absurd and terrifying to take out a loan when you’re negative. It took me the first 10 years just to pay off my initial loans. I’d rather just quit.”