As things stand, attracting customers during the multiple “phases” of reopening has been a challenge. Companies have had to constantly update their marketing for the services they provide: delivery? Pick up on the sidewalk? Shopping in person? Just al fresco dining? – and the new health rules that accompany those.
“It’s an extra public relations nightmare,” said Ann Leadbetter, owner of the Meriwether Cider in Boise, Idaho, with her husband and two adult daughters. Her business includes a taps room and a cider house from where they sell their own hard ciders.
But small business owners say The biggest ongoing obstacle is financial uncertainty that clouds everything.
I have no idea when they will be able to operate “almost normally”
Leadbetter said she is grateful for the PPP loan she received because she helped her family stay in business. And she is grateful that the federal CARES Act exempted business owners from the obligation to make payments on their other Small Business Administration loans for six months. Her family had released two when they started their company. But they will have to start paying again in September.
“We, like many companies, think that by the time PPP funds are depleted and loan payments are due again, we would be out of the woods and able to operate almost normally. Now, as cases skyrocket and are projected to increase. even more in the fall, this is no longer the case. And I’m scared of what will happen next. If we have to completely close again, all bets are off, “Leadbetter said.
‘No one has a work plan’
Cliff Hodges, founder of California-based Adventure Out LLC, which offers surfing, climbing, mountain biking, and other outdoor adventure lessons and retreats, has had a survival adventure of his own since March, when he had to temporarily shut down operations. .
Most of its income is generated between May and October, but reservations for its high season come in March and April. As a result, Hodges said, “Our regular reserves have fallen. And our corporate reserves are gone.”
After reopening this month, the company is seeing an increase in demand because people want to go out after so many months at home. So Hodges is actually trying to hire a little more staff, to add on to most of the employees he was still paying once he received his PPP loan.
In addition to losing more money, Hodges is concerned that he may receive a bill from the state to replenish his company’s unemployment insurance reserve account to help cover some of the unemployment benefits staff received after being fired. While the federal government under the CARES Act subsidized many of those extended benefits, it is up to each state to determine whether employers will be on the hook for additional payments. Hodges has been unable to obtain clear guidance on how he will govern California. And CNN Business has yet to hear from the state employment development agency.
In the meantime, he hasn’t been paying himself, noting that payroll, rent, and utilities top his priority list. “I don’t see a short-term future where I get paid. I would be surprised if I could get paid in 2020.”
‘A series of impossible questions’
Chris Morgan and Gerald Addison were planning to open their new Bammy’s restaurant in Washington, DC, in late March. That did not happen. They called for them not to open a few days before the DC government banned meals in person.
But they decided to hire a smaller-than-expected staff to carry out starting in mid-May. A few days later, they were allowed to start offering patio service. And, starting this week, eating indoors is now allowed. But they said they still don’t feel comfortable doing that for the safety of their staff and customers.
In fact, restaurant and other business owners 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 to come back from unemployment and then, a week later, things to close again.”
While they did not qualify for a PPP loan because they were not open for business earlier this year, they have been taking the new employee retention credit, which offers them a quarterly tax credit equal to half the wages they are paying staff . 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 team yet,” Morgan said.
They are currently paying five employees, but not them or their spouses. And after being in the restaurant industry for years, they know how to lean.
One of her major financial concerns in the future is rent. They assumed a pre-existing lease with six remaining years. “We are trying to find a way forward, so [the landlord] He understands that we are doing everything we can to pay what we can, “Morgan said.
What is needed next?
To thrive, small businesses need customers 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 can be a long way off.
Small business advocates have pushed for automatic forgiveness of PPP loans of less than $ 150,000. And some are even asking that business owners be allowed to get a second PPP loan since the program still had more than $ 130 billion in remaining funds as of this weekend.
But many small business owners prefer to avoid more loans, even if there is a chance that they may eventually be forgiven.
As more financial assistance becomes available, Hodges hopes it will come in the form of a grant. “It’s absurd and scary to ask for a loan when the result is negative. It took me the first 10 years to pay off my original loans. I’d rather just give up.”
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