Entrepreneurs: Doomsday for small business
“I am a small-business owner with roughly 75 employees,” said Cathy Merrill in The Washington Post, and the government’s announcement that gatherings should be put off until May 15 is “a death sentence” for my company and the roughly 30 million small businesses in this country. “I believe in science, trust experts, and have spent the past week self-quarantining,” but a two-month hiatus means “profit is gone for the year.” Now, facing certain losses, businesses will be making grim choices: borrow money to pay rent or declare bankruptcy to “start again with a much lower lease if the economy revs back up.” No business “has been spared the economic sledgehammer,” said Jeanne Sahadi in CNN.com. You can see some of the damage on the street, with shuttered restaurants and salons. But there are other businesses dying less visibly. One catering company owner with offices in New York and Miami says she has already laid off 55 of her 85 staffers. She notes that event planners and caterers won’t be getting in line for a high-profile bailout. “We’re a $14 billion industry,” she says, “made up primarily of small businesses.”
There’s a fix for businesses like that, said Andrew Ross Sorkin in The New York Times: “Offer every American business, large and small, and every self-employed worker a no-interest ‘bridge loan’ guaranteed for the duration of the crisis, to be paid back in five years.” The only condition? Companies have to “continue to employ at least 90 percent of their workforce at the same wage they did before the crisis”—and reinstate the workers already laid off in the last two weeks. Right now, though, small businesses are “loath to take a loan” of any kind, said Catherine Thorbecke in ABCNews.com. New York City is already offering zero-interest emergency loans of $75,000. But business owners say that when they’re already drowning, “you’re just going to have to owe somebody.” Meanwhile, grants come with long applications and many restrictions. A New York microbusiness grant, for instance, is available only to “businesses with fewer than five employees.” That doesn’t help the health-food store that employs seven.
If you own a small business, you may be able to find ways to adapt, said Megan Cerullo in CBSNews.com. A physical therapy company in Manhattan, for instance, is quickly ramping up a HIPAA-compliant teleconferencing platform to treat patients remotely. Seattle has become “the test case for how coronavirus will affect neighborhood shops and restaurants,” said Brendan Greeley in the Financial Times, and many of those are getting creative. As foot traffic has disappeared, one local pastry chain has switched to baking bread for delivery. The owner of one high-end restaurant “converted a portico into a drive-thru” and set up “drive-in dining in his parking lot, using contactless payments.” ■