Jeanie Wright planned a year of great growth for her candy store Alaskan Sweet Thing’s in 2020. The company makes gourmet toffee, popcorn, fudge, and more from glacier water and sells them online and at its retail location.
Much of their business comes from tourists traveling to Alaska as the state has become a major cruise destination. Then the corona virus struck, causing a severe blow to tourism, which relies on around 90% of its business.
“The entire tourism industry in Alaska has just been decimated. No ships are due to sail until July. The season usually starts in late April. The Canadian border has been closed and flights have been severely affected,” ; Wright said. “I don’t think most people get on a plane and want to come here.”
Like many small business owners on the country’s main roads, Wright faces impossible decisions – such as whether to keep her four employees, one of whom is her older sister – when applying for loans that could give them a chance in the midst of Disorder caused by efforts to curb the spread of COVID-19 to stay afloat.
Outbreak-related travel restrictions have hit the gourmet confectioner Alaskan Sweet Things hard, as the confectionery manufacturer relies on tourism for around 90% of its business. Source: Jeanie Wright / Alaskan Sweet Things
“We just had a pay slip yesterday,” she told CNBC on Friday. “As of today, I told my sister that she might want to start the unemployment process. I just completed my small business administration catastrophe loan application, but it will take three or four weeks to see money. It is very difficult. “
The National Federation of Independent Business said about three-quarters of small businesses were affected by the COVID 19 pandemic, from supply chain disruptions to slower sales and sick employees. Goldman Sachs’ latest data is even worse: 96% of small businesses say they are affected by mid-March. About 51% said their company can only survive between zero and three months.
The CARES law, which came into force on Friday, will provide small businesses like Wright with a much needed lifeline in the form of multi-billion dollar loans under the SBA 7 (a) loan program. Loans up to $ 10 million based on payroll are offered for mortgages, leases, paying personnel, and utilities. There is also SBA’s catastrophe credit program, with smaller loans of up to $ 2 million, for companies affected in hard-hit areas. But the message from Main Street is clear – the capital is needed now.
“Small business owners are desperately trying to support their employees in this unprecedented crisis in the country, and the capital access and tax credit provisions will allow them to do just that. In addition, these provisions will keep more small businesses intact and help us do so to do.” An economy for small businesses once this crisis is over, “said Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council advocacy group, in a statement.
Jason Duff, founder of Small Nation, develops and revitalizes small towns and has been working on the renovation of Bellefontaine, Ohio for several years. Two weeks ago, the city was in “the best financial shape it has ever been in,” said Duff. Then Ohio Governor Mike DeWine took proactive steps to send students home and close unnecessary deals given the rapidly spreading virus.
“As someone developing real estate, we saw that 80% of our tenants had to be closed,” said Duff. “I think what was even more scary and challenging was the way our small business owners had to fire their friends and family. The staff are really family members – it’s about figuring out what we’re going to do to save money? Can we?” we stay open? These kinds of decisions were not only traumatic, but also difficult to process. “
Adam Rammel, a business owner in Bellefontaine, Ohio, has applied for disaster relief for small businesses and is awaiting funding from 7A to support Brewfontaine, his taproom and restaurant, and The Syndicate, an event space that was due to open in May.
Both Duff and his business partner Adam Rammel, owner of Brewfontaine, a taproom and restaurant in Bellefontaine, have applied for SBA catastrophe loans and are planning to apply for 7 (a) aid under the CARES Act.
Rammel has kept the restaurant open, but the operation is due to a skeleton crew running out of money. After last week’s payroll, the company has $ 20,000 in its checking account.
“I’m staring at a $ 7,500 sales tax number last Monday that I just didn’t want to pay,” he said. “At the moment, I’m just paying the payroll and groceries and beer sellers until we’re done. We do everything we can to stay afloat every day. This money can’t come soon.” enough.”
And while companies are waiting for these important loans and more details on the application process, David Barr, a franchisee and franchisor in countless companies, said that from Taco Bell and KFC restaurants from Yum Brands to TITLE boxing halls and lash lounge studios in the southeast Rich, hopeful entrepreneurs will borrow to keep workers on their payrolls. Barr is the former chair of the International Franchise Association, the largest retail group in the industry.
“I hope for the companies that are open that people will rely on the employment side, that’s what they do [CARES Act] should do. That doesn’t necessarily mean that people have to be 100% busy again, “said Barr.” But if we all lean on it, it’s a little patriotic. “