Despite imminent federal aid, small businesses are desperate
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Congress passed the $2 trillion COVID-19 aid bill Friday afternoon, which means that there is some help coming from the federal government for small businesses.
But for the last couple of weeks, those small businesses have been scrambling to make payroll, sort out which staff they can keep on — and which they can’t — and figure out some way to keep money coming in.
While Washington has been working out this deal, a lot of small businesses have been hanging on by a thread. Like Kate Fryer’s beads, wire and accessories shop A Bead Just So.
Fryer usually makes her money from classes or birthday parties. Those just aren’t happening now.
“I’m trying to get my inventory loaded up on my website, which I’ve never done before. It’s a brand new, really intense process,” she said.
Here in Washington D.C., some restaurants are frantically shifting from bar and dining room service to carry-out and deliveries. Mark Kirwan, who owns two restaurants in the area, has been doing deliveries, but not alone. His mascot, Jack — a playful, Italian mastiff puppy who’s bigger than most full-grown dogs — has been going along.
“At times like this, when you’re in the doldrums, I just look at him and his face and it just brings a bit of warmth into you,” Kirwan said. Warmth he’s needed after laying off his staff. He figures he can only hang on for another month or so.
“There’s some days we’re doing $300 [or] $400 in sales compared to $15,000 to $20,000,” Kirwan said.
Other small businesses are pulling in even less. Shobha Tummala, who owns a chain of hair removal salons in Maryland, D.C., and New York, said she’s making a little off online sales and gift cards, but it doesn’t really make a dent with rent almost due.
“We would have to sell $100,000 worth of gift cards for it to make a real significant difference,” Tummala said. “That’s not going to happen.”
Tummala laid off her almost 100 employees last week in a series of video conference calls.
“I wanted to see everybody. I wanted everybody to see me,” she said. “They rely on me to take care of them and so it can get emotional.”
The new aid package could help people like Tummala cover rent and expenses. But without customers, even that will only go so far to keep companies in business.
COVID-19 Economy FAQs
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
Are people still waiting for unemployment payments?
Yes. There is no way to know exactly how many people have been waiting for months and are still not getting unemployment, because states do not have a good system in place for tracking that kind of data, according to Andrew Stettner of The Century Foundation. But by his own calculations, only about 60% of people who have applied for benefits are currently receiving them. That means there are millions still waiting. Read more here on what they are doing about it.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out Tuesday from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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