by Hannah Lee ’21
The current Coronavirus pandemic has brought worldwide suffering, causing many lost lives and putting a pause on everyday normal life. One of the more hidden tragedies behind this global struggle are those of small businesses. With no income and landlords still expecting payments, the virus has threatened many small businesses into possible permanent closure (even after the economy reopens).
The government attempted to help out small businesses with loans given out by the Small Business Administration (SBA); however, the end result of these loans were not nearly as successful as intended. For starters, when the programs were originally supposed to launch in early April many big banks admitted they did not have the resources or funds to supply these loans whereas smaller community banks were able to do so. This led to the majority of the first round of funds being exhausted in midwestern states like North Dakota, Kansas, and Oklahoma. As a result, many of the places which got the most amount of money did not have as many small businesses and were also not hit as hard by the pandemic.
The first round also gave out the majority of the larger loans, leaving smaller loans with less money for the second round. Many self-employed small business owners were unable to acquire the first round as they did not know which forms to fill out and had complications with using the loan websites. Large companies with close relationships with major banks were clearly prioritized throughout the process when they should not have been participating in the program in the first place. This disadvantage is extremely apparent through the fact that large chain restaurants were somehow able to qualify for the loans, taking funds for actual small businesses. Although some large chains like Shake Shack and Potbelly did end up giving the funds back after receiving major backlash, the fact that they were even able to appropriate those funds reveals the program’s evident flaws.
This struggle has hit home for me personally as my parents own a small retail business together. Going from gaining income from multiple stores to no income at all has not only affected our family financially but has also been mentally draining and terrifying. Much of my childhood was spent in these stores, hiding in clothing racks and trying on clothes that were far too big for me. I watched my parents’ business grow and mature in awe over the hard work and ambition they displayed everyday. My mother had built her business on her own from nothing, creating connections with her sellers and forming a small family with the employees and managers she has kept for many years. My father spent weeks turning empty rented out spaces into the charming boutiques. He learned to fix anything and everything, from large shelf structures made from scratch, to the tiniest and dantiest pieces of jewelry. The thought of having to lose it all is simply heartbreaking.
“It’s a never ending nightmare. My husband and I have been losing sleep over it, the uncertainty of it all, ” my mom says.
Although my parents were able to qualify for a small loan from the PPP program, it’s barely enough to keep the business afloat. With the worry of landlords still expecting full rent to be paid eventually and the economy heading towards a concerning recession, my mom doesn’t know how she will be able to build up enough revenue to pay off fees and return to normal even after the lockdown is lifted.
I understand payments such as for rent still need to be met to keep the economy running. I understand that everyone is facing their own personal problems and hardships during this time. That is exactly why landlords should be willing to be more understanding with expenses. The government should be doing more to ensure loan programs should be fully dedicated to those who need them most and should update guidelines on how they should be spent to cater more to these small businesses’ needs. The government should also potentially make more deals with landlords to require them to be more cooperative and lenient with their tenants. Local businesses, like my parents, are the backbone of many communities and deserve a chance to survive this pandemic.