Local businesses grow weary waiting for federal assistance during pandemicContineo Group is a small engineering firm that designs for commercial projects outside of the building like infrastructure, parking lots and stormwater control. The owners are Ron Crump, Bryan Russell and Erick Garcia-Salas. They have applied for and were approved for the Paycheck Protection Program. Image provided to Decaturish
This story has been updated.
By Zoe Seiler, contributor
Decatur, GA – For small business owners, their business is the first thing they think of in the morning and the last thing they think of at night. They have poured all of their energy and passion into their business, yet many have not received financial assistance to stay open during the coronavirus pandemic.
Small businesses are being significantly affected by the COVID-19 pandemic. Many have decreased hours, reduced staff and are generating less income.
Deanna Ranlett, owner of MudFire Studio, said some parts of the pottery studio business are down by 90%. She had to issue separation notices to all the contracted instructors.
Salons were required to be closed under Georgia’s stay at home order, although they can start to reopen this week. During this time, salons such as Wildheart Salon in Oakhurst haven’t been able to cut hair which means financial cuts elsewhere.
“It’s hugely impacted us because we’re service based and when we’re closed, we don’t provide services,” Wildheart Salon owner Tiffany Pateritsas said. “So as far as revenue goes that’s a really, really big hit especially because that’s the majority of our revenue.”
The Atlanta Sport and Social Club is currently closed, and owner Kevin Cregan said all full time and part-time employees have been furloughed during, including himself. He said there’s not much for the business to do right now and their cash flow is getting thin.
Cregan said the business has incurred additional expenses because he has to prepay for all of their field rental and is not getting a refund on those expenses.
Small businesses in the area have applied for loans the government created and through the stimulus bill (known as the Coronavirus Aid, Relief and Economic Security Act or the CARES Act). The Paycheck Protection Program and Economic Injury Disaster Loan are intended to help small businesses survive while they are closed or generating less revenue because of the pandemic.
But in many cases, business owners have struggled to access that assistance.
What is the Paycheck Protection Program and Economic Injury Disaster Loan program?
There are two programs being administered by the Small Business Association that businesses can apply for to get some relief during the coronavirus pandemic.
One program is the Paycheck Protection Program. This loan meant to provide a direct incentive for small businesses to keep their workers on the payroll, according to the SBA website.
“SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities,” the SBA website says.
Wes Hargrave, accountant and owner of Hargrave and Associates, said that up to 25% of the loan can be used to pay for things such as rent, utilities and mortgage interest.
A congressional aide to Senator David Perdue added that 75% of the forgivable portion of the loan must be used toward payroll expenses.
“You’ve got two separate items in that. You’ve got a grant of up to $10,000 and you have a loan, the economic injury disaster loan,” Hargrave said. “The economic injury disaster loan is a 30-year loan, 3.75% interest rate. It has a normal underwriting process like every loan does.”
Hargrave added that the grant, or advance, is part of applying for the loan.
“This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue,” he said.
The SBA website says, “Funds will be made available following a successful application. This loan advance will not have to be repaid.”
Hargrave noted that the loan programs are constantly changing and evolving as they go.
For example, he said that the SBA changed the wording for the advance so now it’s $1,000 per employee but up to $10,000 total.
An article from Vox says that a business with less than 10 employees would not be able to receive the full $10,000.
Both federal programs are out of money
Both programs quickly ran out of money since the Paycheck Protection Program launched on April 3. Congress initially dedicated $350 billion to the PPP, according to the New York Times.
“Following its launch, the SBA processed more than 14 years’ worth of loans in 14 days, which will protect a vast number of American jobs,” U.S. Small Business Administrator Jovita Carranza and U.S. Treasury Secretary Steven Mnuchin said in a joint statement.
The PPP provided payroll assistance to more than 1.6 million small businesses, according to the statement.
Gov. Brian Kemp said in a statement that the PPP provided $9.5 billion to businesses in Georgia.
Brian Goebel, managing director for social enterprise at Emory University’s Goizueta Business School, said there is an unprecedented need for emergency support right now. The funding rolled out with the expectation that between the beginning of April and June 30 was the period to apply, he added.
“When it comes to the federally implemented programs, unfortunately, if there’s no money formally appropriated by Congress, they can’t have any new applications processed,” Goebel said.
However, the Senate passed a $484 billion relief package on April 21, which includes more funding for the small business loan programs as well as funding for hospitals and coronavirus testing, according to the New York Times.
The relief package provides $320 billion for the Paycheck Protection Program and sets aside $60 for small lending institutions. Additionally, about $60 billion will go to the Economic Injury Disaster Loan, of which $10 billion will go towards grants, CNBC reported.
The measure now has to pass the House of Representatives before going to the president for his signature, the New York Times said.
How are small businesses being impacted right now?
Goebel helps run the Start:ME program which is a free intensive 14-session training program for small businesses that provides the tools and connections needed to build and grow successful businesses, according to the Start:ME website.
Start:ME did a business impact survey at the end of March and received 49 responses. Seventy-six percent of the respondents said they have been significantly impacted, of which 43% have decreased business hours significantly and 33% have closed fully.
Sixty-one percent of the businesses surveyed anticipate needing to apply for emergency loans or grants to support their business.
“I think the long and short of it is that at the end of March the impacts were fairly significant and to be honest I think those have only grown in severity because none of them have been able to really reopen,” Goebel said. “If anything most people have been more deeply impacted.”
Sam Stewart owns Decatur Screenprint and his business has been down since the schools and other local businesses are closed. He is able to print some orders since a few industries like landscaping, plumbing and electricians are still operating.
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“I think maybe 60 to 70% of my business is school-related,” he said. “So, a good chunk of it went away just when they closed schools down.”
Beth and Derek Smith own Axis Fine Art Installation, a business that helps install, transport, crate and provide climate-controlled storage for art. They work with corporations as well as help hang art in homes.
“Our ability to work has just been decimated by the pandemic,” Beth said. “We are still open because we can still do some jobs.”
“I just ran some numbers a little while ago and just last April of 2019 to this April, when you run the numbers there’s a difference of 136% in where we are. So, it’s a huge difference in where we are,” she added.
Heddy Kuhl owns Java Vino, a coffee shop in the Poncey-Highland area. There is a roasting facility in Decatur near the new Talley School.
Kuhl said the business has been affected heavily and the coffee shop has completely changed how it operates. The coffee shop has limited its hours and is only taking to-go orders.
“It’s lowered our footprint,” Kuhl said. “Our sales at the shop are probably down by about 30%. The shop really hasn’t been hit as hard. Our moneymaker is the wholesale and I would say sales are down as much as 75 to 80%.
The process has taken a long time and most businesses haven’t heard back
Before the programs ran out of money, many local small businesses in the Decatur area applied for the loans and have been waiting for an answer.
Deaturish spoke to 10 small business owners, of which only three were approved for funding and two have received funding already.
Most of the small businesses applied for the PPP loan in early April when the application became available and have not heard any new information.
Joann Schwartz, the owner of Kirkwood Bark and Lounge Doggy Daycare, said the process has been long and the communication from her bank is lacking. She doesn’t know where she is in the process or when she might receive funding. She applied for both loans at the beginning of the month.
“So, that’s hard to deal with because you’re just up in the air. You don’t really know what’s going on,” Schwartz said.
The doggy daycare has reduced hours to five days a week instead of seven days. Schwartz said she isn’t boarding right now because no one is traveling.
“It’s been impacted terribly,” she said.
Some people still bring their dogs to Schwartz and she has some clients who work for the CDC or medical field but the whole number is probably down by 70% she said.
Schwartz said that if she were to receive one of the loans, she would be able to pay her rent and utilities and wouldn’t have to dip into her savings.
“It would help me tremendously being able to cover my bills and not bankrupt myself,” Schwartz said.
Pateritsas, owner of Wildheart Salon, said she applied for the EIDL on April 3, and hasn’t received information about that yet.
She recently heard feedback on her PPP application saying that the application has been received.
“I wake up in the morning and I check the email immediately to see if we’ve gotten any news pretty much every day,” Pateritsas said. “It’s really just a waiting process.”
Pateritsas added that when she and her husband Cartez Washington, who is also an owner of the salon, watched the news on TV about the government putting relief in place for small businesses, they thought the government would be able to help.
At the time, Pateritsas felt relieved. But that has worn off.
“Now we’re going on a couple weeks and we’re starting to worry like is this actually going to happen,” she said. “Are we actually going to get relief or are we not? Are we going to be potentially left in the dust? Which would really suck, to be honest.”
Ranlett, owner of MudFire Studio, said the process of getting federal help has been nightmarish for her.
“The process has been really frustrating,” she said. “The lack of real information has been really frustrating.”
There has been a loss of hope from when the CARES Act was passed until now.
“I remember the day that it passed, I was like it’s going to be OK,” Ranlett said. “I still don’t know if it’s going to be OK.”
She has applied for the EIDL loan within the first several hours of the application being open and hasn’t heard an update.
She added that there was confusion about the rules of the loan.
She applied for the PPP through Wells Fargo but ended up applying with a smaller bank. She has not received an update on that application.
Wells Fargo eventually opened the application and it took Ranlett three and a half hours to apply because the system kept crashing. When she got through on the last try, it took her five minutes to fill out the application.
“It’s like when people were applying for the [Affordable Care Act] and just couldn’t even get through on the website,” Ranlett said. “It’s like a total lack of understanding. They keep issuing statements saying they’re surprised at the number of people applying. How can you be surprised if we’re all forced to be closed? It’s not a surprise.”
Ranlett said the loans would help her pay rent and be able to provide programming such as putting together pottery kits so people can work on that at home.
“The most immediate benefit though I think would just be breathing a little easier to be able to continue to put programming forward and inventory forward instead of holding onto the money for rent,” she said.
Ron Crump is one of three owners of Contineo Group, a small engineering firm. The business had 18 employees and Crump said they immediately had to let a few go, cut hours and were having to look at retracting salaries.
Contineo Group has been approved and received funding for the PPP through IberiaBank but had problems with Wells Fargo.
“Wells Fargo has been a nightmare for us, but we’ve been lucky and had great response from Iberia,” Crump said.
He said that for IberiaBank the whole process was a couple of weeks long. They reached out to Wells Fargo the day the loans were announced.
“After the announcement went out on Friday that there were no more funds left; we finally heard back on Saturday from WellsFargo, basically saying too bad, so sorry,” Crump said.
Amanda Hammett, owner of Core Elevation, is a speaker. She spends a lot of time talking about millennials and Gen Z’s and how companies can recruit them, retain them and keep them engaged, she said.
“I’m a speaker so a large portion of my income is through speaking fees so that’s not happening right now at all,” she said. “There are other parts of my business that are still going well.”
She has lost a couple of clients as a result of the pandemic.
Hammett applied for the EIDL loan and the PPP loan. She was checking with Wells Fargo constantly at the beginning of the month and said it was close to a week before they put anything on their website.
“A few days later, I got an email from Wells Fargo saying ‘great, you’re in the queue,” she said. “We’ll get to you but you should know you should probably go elsewhere and look for a loan.”
She was able to submit an application through another institution on April 15, but the news came out of the funds running out.
“When all of this is over, I will be leaving Wells Fargo for sure,” Hammett said. “I’m not a needy client. I do everything online. I don’t go in unless I have to, but I feel like I got screwed in this whole thing honestly,”
Cregan, owner of Atlanta Sport and Social Club, was approved and has received the EIDL and is expecting to receive the PPP loan on Friday.
“That’ll help us bring our staff back,” Cregan said. “We’ll probably bring back 75% of our staff and gear up for, at this point, it would probably be for June or July programs or leagues and also start marketing to our customers.”
Heddy Kuhl, owner of Java Vino, encourages people to support local businesses and is trying to do the same.
“We’re trying to be strategic about cutting costs but also being sensitive to the fact that we work with a lot of small business owners so we have not cut out things like lawn service because I know that that’s somebody’s income. As long as we’re able to pay what supports somebody else, we’re gonna keep doing that,” she said.
She said the community outreach has been heartwarming
“In this time I think the biggest obligation we have as community members is to support our community, Kuhl said. “Instead of buying in bulk from companies that are importing from other areas, think about what your local community has to offer and shift your spending there. I think it’s more important now than ever.”
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