What lies beyond the pandemic? MassForward is MassLive’s series examining the journey of Massachusetts’ small businesses through and beyond the coronavirus pandemic.
Restaurants across Massachusetts are struggling for survival following Gov. Baker’s shutdown of non-essential businesses until at least May 4 due to the coronavirus pandemic.
Many have decided to simply close their doors during the pandemic. Some, however, have managed to stay open by altering menus and offering takeout options. To stay afloat with a decrease in overall sales that for many establishments is over 90%, these small businesses are in desperate need of an influx of cash.
Teri Skinner, owner of popular downtown Springfield sandwich shop NOSH, recently learned that her application for a $20,000 loan through the Paycheck Protection Program was approved.
The PPP program is included in the $2.2 trillion stimulus package signed into law by President Donald J. Trump. It provides loans for businesses impacted by the coronavirus pandemic if they promise to continue to pay their employees.
“I found out Friday that I was approved for it which is good,” said Skinner. “I know that a lot of people [that] applied for it [said] that there’s no money left.”
Business has picked up for NOSH over the course of the pandemic. Skinner had to lay off all her staff at the beginning of the crisis but now she has been able hire back two employees to help with orders.
Nearly 47,000 small businesses in Massachusetts were approved for a combined $10.36 billion in PPP loans before the program ran out of funding on Thursday, according to newly published data.
The Bay State punched above its weight when it comes to PPP activity. It ranked ninth in terms of both the number and value of the loans approved by the U.S. Small Business Administration, even though it ranks 15th among states in total population.
“Things are going awesome,” said Skinner on Friday. “We got [approved the Prime the Pump funding of] $5,000 so that just kind of gave me that little safety net that helped us transition into doing an entirely different model of our restaurant. We started doing family meals, at-home delivery. We started this Nosh pantry.”
The “Prime the Pump” program offered grants up to $15,000 to provide immediate financial relief for restaurants.
“The first round of checks went out on Friday,” said Springfield Mayor Domenic J. Sarno said in a press briefing at city hall on Monday. “The second round is being done right now.”
The second round of the “Prime the Pump” program, which relies on federal Community Development Block Grant money, is over twice the amount of the first, which sent $222,000 to 30 restaurants in the city.
The city said Friday it was overwhelmed in that first round with 80 applications totaling over $1 million in requests, four times the amount that was available.
Skinner also applied for the PPP loan through TD Bank, which started accepting digital loan applications on April 6.
“TD Bank continued to accept and process Paycheck Protection Program loan applications until U.S. Small Business Administration funding for the program was exhausted on April 16,” said a spokesperson for TD Bank. “In total, we approved nearly 26,000 PPP applications for a total of approximately $6 billion.”
Some banks had run out of funding at phenomenal speeds. JPMorgan Chase ran out of the Small Business Administration’s emergency coronavirus relief fund within minutes of the program’s application availability, according to NBC News.
“We didn’t even get through the first five minutes of applications,” a JPMorgan Chase senior banking executive said.
Nadim Kashouh, owner of Nadim’s Mediterranean Bar and Grill, has also been accepted for PPP but has another issue, getting his 32 employees back to work.
“For the first week [of the pandemic] we went down to three people but then we saw there’s an uptick in business on take-out. So we brought back five more people,” said Kashouh. “I’m going to be honest with you, I think is going to be very challenging and very difficult to have people come back to work when they are sitting home collecting unemployment.”
The CARES Act, signed into law on March 27 in response to the coronavirus pandemic, allows citizens who are out of a job to receive an extra $600 a week for up to six months. State unemployment benefits already provide approximately 50% of an eligible person’s average weekly wage up to a maximum of $823.
“Now they make more money sitting home than having to come to work and that’s going to continue for four months. So that’s going to be the challenging part for us,” Kashouh said.
Theodores’ and Smith’s Billiards owner Keith Makarowski received confirmation that his business had been accepted for the Prime the Pump grant from the city. But his application for PPP funds, while approved, has not yielded any cash as funds were depleted.
“Our bank had made it through the approval process,” said Makarowski. “But there was no money to hand out.”
Makarowski is now on a waiting list like thousands of other applicants, waiting to hear what the federal government will do.
The city of Springfield announced on March 25, the first of two stimulus packages for small businesses struggling amid the coronavirus outbreak.
Part of the resilience for small businesses has come through innovation and changing the way a store attracts new clientele.
Skinner has had to adapt during the pandemic by not only taking her business online but offering the people what they want.
“We sell toilet paper now,” she said laughing and then added. “I think at first it was kind of just funny because, you know, the shelves just completely depleted at the stores. And then after we were like, well maybe people would like to just be able to pick up a couple of rolls here.”
Like with NOSH, Kashouh is looking to advertise his business via social media and the website. He is also looking at what the city and his business will be like after the pandemic wains.
“When we open are we going to be able to go to full speed ahead? Are we going to open the whole restaurant? Do we have to go down to half the capacity?” said Kashouh. “I’m working on expanding my patio and adding more seats outside. Hopefully, that will kind of make up for the loss of seating inside.”
Skinner from NOSH and Makarowski of Theodore’s have also been considering what they could do to promote social distancing after the stay at home order is lifted. They’re making plans but both state that only time will tell with all the uncertainty at the moment.
For the time being, they’re focused on just getting through the pandemic.