One year later: Millions of people have struggled to help small businesses stay afloat, but most still struggle
A Federal Small Business Loan Provided Immediate Relief To Etcetera Wine Bar; Owner Alexandra Gerteis was able to rehire all of her staff and even add new ones, just in time for the bar to reopen for the hot summer months.
But since then, Gerteis has struggled to secure additional funds, despite filling out every grant application she can get her hands on. And, a year after the start of the pandemic, foot traffic is still low and small expenses are piling up. She sees the scuffs on her tables and chairs, accumulated on daily trips outside, with a hunch. Who is going to pay for this?
“It’s the little things, but it matters,” she said. “You don’t want to be sitting in a chair about to collapse.”
Over the past year, governments at municipal, state and federal levels have launched a myriad of grant and loan programs to help small businesses. Although the money was gratefully accepted, some small business owners say they still struggling and fear that businesses will not keep pace with the reopening.
Of these funding programs, the federal Paycheck Protection Program (P3) loan, which Etcetera has received, is perhaps the most significant, offering loans up to two and a half times the monthly wage costs. from a company. Requests for a second round of PPP financing are now in progress.
HOMEY, a nonprofit organization that has gone from community justice to food donations, has received approximately $ 60,000 through the PPP program. Executive Director Roberto Alfaro said the loan came at a critical time when there was more confusion over how grants and repayments worked, allowing the nonprofit to maintain endowment levels in staff and find other ways to obtain funding.
“It was really, really helpful for us to maintain continuity,” Alfaro said, adding that HOMEY was not seeking a second PPP loan. “Without it, we would have had a lot of trouble doing payroll and keeping things going smoothly within the organization.”
The city has also committed nearly $ 24 million to provide financial assistance to small businesses through various grant and loan programs, supported by public and private partnerships. The money has so far been distributed to more than 1,300 small businesses in increments of $ 10,000 and less for the most part. And the demand is high: for funding opportunities, the city received around 8,500 applications and awarded around 1,000 scholarships.
“The reality is that no city has the resources to deal with a crisis of these proportions on its own, not San Francisco, New York, London or Tokyo,” wrote the spokesperson for the OEWD. , Diana Ponce De Leon, in an email. “We see the same difficult problem at the state and local levels across the country – federal relief efforts and stimulus spending will have the greatest reach.”
The latest federal stimulus bill offers Additional relief for small businesses, including $ 28 billion for hard-hit foodservice companies, dubbed the Restaurant Revitalization Fund. It also allocates an additional $ 7 billion to the PPP program.
Ponce De Leon added that city funds have focused on prioritizing those who have struggled to receive federal support. Some 57.6% of city grants went to women-owned businesses and 67.6% to minority-owned businesses.
Legal immigration status is not a factor when applying to city programs, as long as the applicant companies meet the criteria for the grant or loan, according to De Leon. The city’s SF Shines grant for reimbursement of safe operating costs, for example, does not ask the applicant for a social security number or immigration status. Undocumented small business owners are generally not eligible for federal programs like P3 loans.
The money certainly helps, say business owners, but in those amounts it’s the equivalent of fixing a leaky faucet in a burning building – a way to bypass homeowners or pay for small expenses, but not enough to make up for the major loss. of income during the past year.
“$ 2,000 is a lot of money for most people, but in a business like mine, it takes about three days,” said Lisa Sherratt, owner of Serendipity Cards & Gifts, who received the amount. through a city-funded women’s empowerment mini-grant. . “It probably went into my bank account and disappeared on the weekends, intended for payroll taxes, sales tax and merchandising.”
At Adobe Books, the $ 5,000 relief from the city’s resilience fund was directly leased, according to Heather Holt, one of the store’s volunteers. The store still owes just under $ 5,000 in rent, which it is clinging to as a liability for now.
“We have no way of refunding this at this time,” she said, adding that their owner had worked with Adobe on the payment and was not threatening the store with eviction.
Many business owners would appreciate the city’s help more, but don’t hold their breath. For his part, Holt is hoping the city will consider implementing a rent relief program for businesses that still stand but still owe rent money.
Serendipity’s Sherratt said small businesses will scramble to find a way to stay afloat, including Serendipity, which has the revenue to keep going even though business is still down 30% from normal.
But she doesn’t know if she will continue to run the business if conditions don’t improve. She had to take a second job and a 40% pay cut from her business.
“I had 11 wonderful years there, I enjoyed it, but I can’t go on like this,” she said.
And as the pandemic draws to a close, business owners have said that doesn’t necessarily mean businesses will return to pre-pandemic operating levels – just one more reason for the city to consider additional ways to finance them.
Georgia Rew, owner of The Pretty Pretty Collective and recipient of a Resilience Fund grant, said recovery will likely take years.
“Even when we can open to 100% of our capacity, we won’t be 100% of business without the customers,” she said. “And everyone’s going to want something – money, taxes, everything.”