“We just did not have the resources to weather a lengthy shutdown like this.”– Mia Bossie, co-owner of 99 Bottles, a Santa Cruz restaurant and pub that closed permanently in March
Bossie and her husband founded 99 Bottles eight years ago, and it came to be a Downtown Santa Cruz staple. She said deciding to close was one of the hardest things she’s ever had to do.
Amid COVID-19, small businesses across the country have had to make tough choices about staying open, furloughing employees and even closing permanently.
The Small Business Administration (SBA), a federal government agency, rolled out the Paycheck Protection Program (PPP) as part of the Coronavirus Aid, Relief, and Economic Security Act to incentivize employers to keep paying their employees during the pandemic. Small business owners who borrow through this program won’t have to repay the loans as long as all employees are kept on payroll for at least eight weeks and the money is used for payroll and overhead expenses.
However, the process hasn’t been smooth for many applicants.
Scott Zankman, co-owner of Santa Cruz jewelry store Variance Objects, said he applied for a loan through the PPP but so far the process has grinded to a halt.
“I think the bank is confused about what they’re supposed to do on their end, and what the guidelines are. I responded very quickly to get this set up and I just keep getting emails from them saying, ‘you’re on our waiting list, maybe apply somewhere else, don’t just wait for us because we only have so much money,’” Zankman said. “They’re our bank and we’re in good standing with them so I’m surprised that they haven’t been able to respond to us yet.”
On April 16 the SBA announced it is unable to accept new applications for the PPP due to a shortage of funds.
Zankman and his wife Nicole are still providing some amount of work and pay to three of their four employees, but they anticipate a drop in revenue that could pose further financial difficulties down the line.
Many employees of small businesses have seen their hours reduced or cut altogether.
UC Santa Cruz third-year Alicia Lopez was working two jobs, one on campus as a house manager for arts events and another at Kaiser Permanente Arena. Then she lost them both and had to move home to southern California.
“So far, being back here, I’ve been living off of what I’ve made since the last time I worked, which was quite a while ago,” Lopez said. “[…] I had to buy my books for school. That took a significant chunk out of my bank account right away. So that was rough. Things like that just come up really fast and tend to be really expensive. It’s not looking good without help.”
Lopez said she was told by her on-campus job that she would likely receive some pay despite being unable to work, but it wouldn’t be much. She decided to apply for unemployment benefits after being encouraged to do so by her employer at Kaiser Permanente Arena, but so far she hasn’t received anything.
UCSC alumna Emily Reynolds had a similar experience applying for unemployment benefits after being laid off from her job at Verve Coffee Roasters.
“I immediately applied for unemployment and I’m still waiting for confirmation to get that in. I’ve done all that I can to get unemployment but I’m waiting on them to act further for me,” Reynolds said. “It’s been three weeks since I applied and I’m still waiting on assistance.”
Despite having to lay off workers, Verve has tried to help its employees, Reynolds said. For the final pay period she worked in March, she received a bonus of one third the amount of her average paycheck on top of her regular wages.
“My understanding is that was as much as they can give us. And then when they finally laid us off, they were able to pay us out for paid time off and paid sick leave,” Reynolds said. “[…] When it was originally starting to close, I did hear that the higher ups in the company, like the CEO, CFO and the founders, were willing to forego their paycheck to keep us, or to give us that third.”
Even for those like Reynolds who were able to receive some form of compensation from their employers, the next few months, if not longer, still look grim.
Until unemployment benefits come in, employees like Reynolds and UCSC student Alicia Lopez find themselves treading water.
“A lot of people talk about the small businesses that are still open, but when they ask me, ‘Hey, can you do something for small businesses?’ […] I’m like, ‘Well, I don’t have an income so I can’t spend money on this,’” Reynolds said. “No one’s talking about those people.”