Small-business owners face tough decisions as they wait for government loans to arrive - CNBC

Small-business owners face tough decisions as they wait for government loans to arrive - CNBC


Small-business owners face tough decisions as they wait for government loans to arrive - CNBC

Posted: 30 Mar 2020 11:11 AM PDT

Jeanie Wright was planning for a year of major growth in 2020 with her confection business, Alaskan Sweet Thing's. The company makes gourmet taffy, popcorn, fudge and more from glacier water, selling online and at its retail location.

A big part of her business comes from tourists traveling to Alaska, as the state has become a major cruise destination. Then the coronavirus hit, lobbing a major blow to the tourism that some 90% of her business relies on.

"The whole tourist industry in Alaska has just been decimated — there are no ships scheduled to cruise here until July. The season normally starts at the end of April. The border to Canada has been closed and air flights are severely impacted," Wright said. "I don't think most people want to get on a plane and come up here."

Wright, like many small-business owners on Main Streets around the country, is facing down impossible decisions — like whether to keep her four employees on board, one of whom is her older sister — as they apply for loans that might offer them a chance to stay afloat amid the disruption caused by the efforts to stem the spread of COVID-19. 

Outbreak-related travel restrictions hit hard for gourmet confectioner Alaskan Sweet Things, as the candy maker relies on tourism for some 90% of its business. Source: Jeanie Wright/Alaskan Sweet Things

Jeanie Wright | Alaskan Sweet Things

"We just had payroll yesterday," she told CNBC on Friday. "I've told my sister, as of today, she might want to start the process for unemployment. I just completed my Small Business Administration disaster loan application, but it is going to be three or four weeks before we get to see any money. It's very hard."

The National Federation of Independent Business said some three-quarters of small businesses have been hurt by the COVID-19 pandemic, experiencing everything from supply chain disruptions to slower sales and sick employees. Recent data from Goldman Sachs is even more dire — with 96% of small businesses saying they'd already been impacted as of mid-March. About 51% said their business would only be able to survive for between zero and three months.

The CARES Act signed into law Friday will throw small businesses like Wright's a much-needed lifeline in the form of billions of dollars in loans under the SBA 7(a) loan program. Up to $10 million in loans, based on payroll, will be offered up for things like mortgages, leases, paying staff and utilities. There's also SBA's disaster loan program, with smaller loans of up to $2 million, for businesses impacted in hard-hit areas. But the message from Main Street is clear — the capital is needed now.

"Small business owners are desperate to support their employees during this unprecedented crisis facing the country, and the capital access and tax credit provisions will allow them to do just that. Moreover, these provisions will keep more small businesses intact and help to ensure we have a small business economy once this crisis is behind us," Karen Kerrigan, CEO of advocacy group the Small Business & Entrepreneurship Council, said in a statement.

Jason Duff, founder of Small Nation, develops and revitalizes small towns, and has been working on the renewal of Bellefontaine, Ohio, for the past several years. Two weeks ago, the town was in the "best financial shape it's even been in," Duff said. Then Ohio Gov. Mike DeWine took proactive steps to send students home and close nonessential businesses in the face of the quickly spreading virus.

"As someone who develops properties, we saw 80% of our tenants be mandated to close," Duff said. "I think what was even scarier, and challenging, was the way that our small-business owners were having to lay off their friends and family. Employees really are family — it's figuring out what are we going to do to preserve cash? Can we stay open? Those kinds of decisions were not only traumatic, but challenging to work through."

Adam Rammel, a business owner in Bellefontaine, Ohio, has applied for small business disaster aid and is awaiting 7A funding to support Brewfontaine, his taproom and restaurant, and The Syndicate, an event space that was supposed to open in May.

Adam Rammel | Brewfontaine

Both Duff and his business associate Adam Rammel, owner of Brewfontaine, a taproom and restaurant in Bellefontaine, have applied for SBA disaster loans and plan to apply for 7(a) aid under the CARES Act.

Rammel has kept take out open at the restaurant, but the operation is down to a skeleton crew and running low on cash. After last week's payroll, the company has $20,000 in its checking account.

"I'm staring at a $7,500 sales tax number, you know, this past Monday, which I just decided not to pay," he said. "Right now, I'm only paying payroll, and food and beer vendors, until we get through this. We're doing everything we can, day in and day out, just to keep our head above water. This cash cannot come soon enough."

And while businesses await these essential loans and more details on the application process, David Barr, a franchisee and franchisor in myriad businesses ranging from Yum Brands' Taco Bell and KFC restaurants to TITLE Boxing gyms and Lash Lounge studios across the Southeast, said he's hopeful entrepreneurs will lean into borrowing to keep workers on their payrolls. Barr is former chair of the International Franchise Association, the industry's largest trade group.

"My hope is for those businesses that are open, that people will lean in on the employment side, that's what the [CARES Act] is intended to do. Doesn't mean necessarily that people are going to have to get back to 100% employment," Barr said. "But if all of us lean in, there is some patriotism to that."

City of Kalamazoo will consider creating $2M small business loan fund - mlive.com

Posted: 30 Mar 2020 03:19 PM PDT

KALAMAZOO, MI — The Kalamazoo City Commission will hold a special meeting to consider transferring $2 million in Foundation for Excellence funds to create a Kalamazoo Small Business Loan Fund to help businesses hurt by the coronavirus pandemic.

The meeting will be held virtually at 6 p.m. Tuesday, March 31, the city said in a news release.

The city commission is meeting virtually amid the growing threat of coronavirus, as positive cases of COVID-19 continue to spread across the state. In Kalamazoo County, 24 cases have been confirmed as of March 30.

The Kalamazoo City Commission will consider allocating the Foundation for Excellence (FFE) funding and entering into an agreement with the United Way of the Battle Creek and Kalamazoo Region (UWBCKR) to administer the the Kalamazoo Small Business Loan Fund for its duration, according to a news release sent on Monday, March 30.

The fund would be a partnership with the local United Way office and would offer "near-immediate support" for small businesses that have been hurt by the COVID-19 pandemic, the city said.

The meeting will be conducted using the Zoom platform to promote social distancing and protect participant health, according to the city.

If approved, the Kalamazoo Small Business Loan Fund (KSBLF) would provide urgent relief to small business via low-interest loans of between $5,000 and $50,000, with approval and disbursement expected in a matter of days. Loans could be used to cover operational expenses, payroll, and benefits, the city said in a news release.

"Significant and necessary steps have been taken to prevent the spread of COVID-19," Kalamazoo City Manager Jim Ritsema said in a prepared statement, "but these steps have created serious hardships for the small businesses that we all rely on. This program is intended to help these businesses stay open and keep people employed until state and federal support has an impact."

Business owners have been forced to adapt in the face of growing government restrictions designed to curb the spread of coronavirus, while worrying about health and economic issues that the pandemic has brought.

Related: All Michigan residents, most businesses ordered to stay home to slow spread of coronavirus

Restaurants have closed temporarily or changed to take out or delivery. Yoga studios and gyms are offering virtual classes. Many are operating on a fraction of their usual revenue. Other business are sitting idle and barred from opening under the governor's "Stay Home, Stay Safe" order.

The city of Kalamazoo's proposed program would be available to all businesses that meet the following criteria:

• Provide support to impacted employees

• Located in the city of Kalamazoo

• Have 50 employees or fewer

• Need working capital for payroll or operational expenses

• Can demonstrate an income loss related to COVID-19

The total term of each loan would be 36 months. No payments would be required for six months, followed by a fully amortizing 30-month term at an interest rate of 1%, according to the proposal.

Applications would be reviewed for approval by an advisory board consisting of economic development and community representatives. Review is expected to take place weekly with a goal to wire funds as early as two days after receiving an application. This program is emergency relief and is intended to be temporary, with loans being made until approved grant funds are exhausted or its closure by the partners, the city said.

"We know that people are working around the clock at the state and federal level to organize help, but we are thinking about our city, and see these rapidly available funds as critical to bridging businesses and our workforce until State and Federal help materializes," President of Kalamazoo Downtown Partnership Andrew Haan said in the statement.

The program was designed by the UWBCKR and City of Kalamazoo based on national best practice models and local assistance from the Upjohn Institute for Employment Research, Local Initiatives Support Corporation (LISC), Kalamazoo Downtown Partnership, and the Michigan Small Business Development Center, the city said.

The strong community partnerships that exist in Kalamazoo made it possible to move this program from inception to execution in less than two weeks, and it complements other relief programs that are also available to community members, including the UWBCKR Disaster Relief Fund and the Kalamazoo Community Foundation Urgent Relief Fund, the city said.

Related: Kalamazoo spends $250K on disaster relief during Michigan coronavirus outbreak

"This program aims to offer immediate life-lines to small businesses and their workers, especially those in the category of 'asset limited, income constrained, employed' (ALICE), and retain workforce capacity in this time before state and federal programs to show impact," Chris Sargent, President & CEO of the UWBCKR said in the news release.

If the proposal is approved, small business owners will be able to find complete information and apply entirely online at www.changethestory.org starting April 1, the city said.

The funding is coming from the Foundation for Excellence, created in 2017 when William Johnston and William Parfet, two wealthy businessmen, donated a total of $70.3 million to the city. The FFE was created to fund three areas: property tax reductions, adding money to the city budget, and paying for aspirational projects.

Instructions for virtual meeting

The meeting will be conducted electronically in order for commissioners, city staff, and the public to comply with the Governor's Executive Order No. 2020-21, "Temporary requirement to suspend activities that are not necessary to sustain or protect life," according to a statement from City Clerk Scott Borling.

The March 31 Special City Commission meeting will be conducted virtually via the Zoom platform to exercise social distancing and protect the health of the City Commission and the public.

Members of the public may join the meeting via telephone or computer and will be able to offer public comments as part of the meeting. The March 31 agenda also includes consideration of rules to govern future virtual meetings that may be necessary as a result of the COVID-19 pandemic.

The meeting can be accessed using the following methods:

Online using a web browser: https://zoom.us/j/554096136

  • Go to the web address
  • When prompted, enter the Meeting ID: 554 096 136
  • See the attached instructions for joining the meeting using a web browser

Telephone: 269-552-6425

  • Call the phone number.
  • When prompted, enter the Meeting ID: 554 096 136 followed by #
  • Press # again to be connected

Participants will be muted when they enter the meeting. Video, chat, and screen sharing features will be disabled.

Public input

The agenda and supporting documents for this meeting are available at https://kalamazoomi.civicclerk.com/web/home.aspx

Persons who wish to contact members of the City Commission to provide input or ask questions about items on the meeting agenda may do so during the meeting at designated times for public comments. To address the City Commission, meeting participants will need to "raise their hand" to indicate they want to speak.

To raise your hand while participating online, click the "Raise Hand" icon at the bottom of the Zoom Screen:

To raise your hand while participating via phone, press *9

After you raise your hand you will be informed when it is your turn to speak, and your microphone will be unmuted at that time. Your microphone will be muted again when you have finished your comments or when your speaking time has expired.

Persons with disabilities who need accommodations to effectively participate in Kalamazoo City Commission meetings should contact the clerk's Office at 269-337-8792 by 12:00 p.m. on the day of meeting to request assistance.

Read more:

Entrepreneurs adapt as coronavirus precautions threaten Kalamazoo-area businesses

Brewery owner will match donations for staff laid off during coronavirus closure

Michigan closed non-essential businesses to stop the spread of coronavirus. Now, local police are left trying to enforce it

Online small business workshops address quarantine concerns - Washington Daily News - thewashingtondailynews.com

Posted: 30 Mar 2020 11:42 AM PDT

Beaufort County Community College has upcoming free online business workshops to help owners determine how to best react to the pandemic, shutdowns and current market trends. All workshops will be online. Call 252-940-6375 to register or do it online.

"Small Business for Introverts" is a previously scheduled workshop led by Bob Mackowksi. All other workshops will relate specifically to the COVID-19 crisis and will be led by Tonya Snider, founder and CEO of tenBiz, Inc. tenBiz, Inc., offers business services that improve efficiency, increase profitability and create value over the long term. The company develops strategy and manages projects for businesses and organizations through interactive client engagement, consultative relationships and education.

This workshop series is co-sponsored by the Washington-Beaufort County Chamber of Commerce. Registered attendees will receive a Webex link to the session, by the email address provided by the attendee, 12-24 hours before each session.

Prepare Your Business to Borrow Money Now Before Negative Economic Shifts

Incidents like a Coronavirus outbreak can strain a small business's financial capacity to make payroll, maintain inventory and respond to sudden drops in demand. Businesses should prepare by exploring capital access options so that the money is there when it's needed. Early communication with lenders can present financing opportunities even if they don't need to be taken advantage of until later. Lines of Credit, SBA Disaster Assistance Loans, and small business loans can all be considerations. Find more information on what paperwork is required and how to begin getting your affairs in order today so that you will be prepared to access the funding you may need tomorrow.

This workshop will take place on March 31 from 9:30 to 11 a.m.

Keeping Customers and Employees Safe During Unsettling Times

A lot of companies haven't planned for a crisis on this scale, but many are finding out they need to. This session will show you how to draft a disaster preparedness policy outlining how people should work from home, how to handle travel, what to do about meetings and more. This includes things like what an alternative business model would look like and what that means to both staff and clients. It's important to define some "worst-case" scenarios in your plan so that it can act as an easy reference guide on what to do, how to communicate and how to keep business running. It's not too late to put all the elements of a crisis-management or disaster-preparedness plan in place for your business.

This workshop will take place from 2 to 3 p.m. on April 2.

Small Business for Introverts

This previously-scheduled workshop seems even more apt in a business environment of social distancing. As a small business owner, you're the face of your business. As a shy introvert, you don't want to be seen or heard. These two ideas don't mesh naturally. Learn how you can work through or around your reticence to become a successful businessperson. Local photographer and self-professed introvert Bob Mackowski will teach you about your options and how to build your business around them.

Mackowski owns Open Aperture Photography, a commercial and wedding photography business based in New Bern. He's received an Editors' Choice Award for the past six consecutive years as one of the most published photographers in the world. With a specialty in small business marketing and visuals, he has a passion for teaching and he speaks to small business owners throughout eastern North Carolina.

This workshop will take place from 4 to 5 p.m. on April 2.

Promoting Your Business and Products During a Crisis

It's easy to get caught up in panic and crisis mode and abandon marketing and sales in your business, but that is a huge mistake. Sales will automatically start to slow in most businesses just because of the global pandemic, so it's more important than ever to proactively promote your business and remain on everyone's radar. For starters, it's critical to communicate openly with your customers about the status of your operations, what protective measures you've implemented, and how they (as customers) will be protected when they visit your business. Promotions may also help incentivize customers who may be reluctant to patronize your business. The key is to continue to spend time marketing your business and finding ways to make your products and services relevant.

This workshop will run from 9:30 to 10:30 a.m. on April 4.

Ideas to Keep Cash Flowing During a Pandemic Shutdown

Developing a financial strategy is important so that you can survive the short-term cash crunch while not disadvantaging your long-term profitability. Think creatively by doing things like encouraging customers to purchase gift cards or future services from yours and other's small businesses to keep cash flowing in your local economy. Find ways to preserve on-hand cash that will be needed for the lean months in the near future and consider suspending expansion initiatives or larger investments until markets stabilize. Evaluate your inventory to determine if there are products that can be quickly turned over. In other words, business as usual will not work. Creativity and positivity will be essential elements to keep cash flowing into your business.

This workshop will run from 9:30 to 10:30 a.m. on April 7.

How to Manage Employees as Coronavirus Spreads 

Incidents have just as much impact on your workers as they do your clientele. It's critical to ensure they have the ability to fulfill their duties while protected. Setting expectations and clearly communicating requirements to them will be critical to success. Consider alternative methods for work such as allowing for remote work when possible and adopting flexible sick time policies. The key is to protect your employees while maintaining business operations flow as smoothly as possible.

The workshop will run from 9:30 to 10:30 a.m. on April 9.

Business Planning and Strategizing as a Coronavirus Antidote 

Think planning and control versus fear and panic. Without a solid plan, a crisis like the one we face now can lead to panic, and panic usually leads to bad decisions. As an entrepreneur, you already know your ability to be resilient, creative and hard-working. This is certainly not the first challenge you have faced. The best tool your business has to combat the effects of this global pandemic is YOU- your experience, your knowledge and your ability to strategize a way through this. This session help you think through critical decision points coming up and strategize a way through this time of uncertainty.

This workshop will run from 9:30 to 10:30 a.m. on April 14.

Best Practices for Communicating with Customers and Employees in Light of COVID-19 

Customers and employees will likely be exposed to conflicting information and feel anxious or confused. Be sure to communicate safety and general policies promptly, clearly, and in a balanced manner. Be proactive and help put "your people" at ease with consistent and positive language that answers their questions and assures them that they can rely on you. Furthermore, communicate information in a relatable way and help those affected by changes understand the reasoning behind the changes they may experience.

The workshop will run from 9:30 to 10:30 a.m. on April 16.

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