Survey: La. small businesses need more help to survive COVID-19
15th March 2021 · 0 Comments
By Fritz Esker
Contributing Writer
A recent Goldman Sachs 10,000 Small Business Voices (10KSBV) survey indicated that PPP (Payment Protection Program) loans helped the majority of small businesses stay open, but that more help will be needed to help them survive the economic fallout of the COVID-19 pandemic.
“The strength of small businesses will help us measure the success of the economic recovery,” said Jessica Johnson-Cope, president and principal of Johnson Security Bureau, Inc. and chair of the 10KSBV National Leadership Council in a press release. “Congress took an important step towards relief in December but must tackle the unfinished business of supporting the entrepreneurs who drive our economy.”
Eighty-eight percent of survey respondents on the national level and 95 percent of survey respondents in the South said the second PPP loan is “absolutely vital” or “very important” to helping their business survive. Sixty-seven percent of overall respondents expect to exhaust their funding by April or May, including 65 percent of southern business owners.
The survey indicated Black business owners face a tougher recovery than the overall business population.
Seventy-three percent of Black small business owners applied for a second PPP loan, which is 10 percent lower than the overall application rate. Forty-two percent of Black-owned businesses that have applied for a second PPP loan have received one, compared to 54 percent of the overall population. Only 16 percent of Black business owners were very confident they would be able to access a line of credit or a loan for their business from a financial institution, compared to 30 percent of the overall population.
“I don’t think any of us who work with small businesses, particularly Black businesses, was surprised by the outcome,” said Hermione Malone, the executive director of business development organization Good Work Network, during the “I am New Orleans” panel discussion about Black economic equity on February 24.
The Biden administration recently announced it would try to increase equity for small businesses in the PPP program by only issuing loans to businesses with 20 or fewer people for two weeks starting on February 24.
“It’s the rollout we should’ve had the first time around,” Malone said.
Local Businesses Have Varying Experiences
While the loan process has not been perfect, it has still helped a number of locally-owned businesses in the New Orleans area.
Christy Wood, co-owner of Lemieux Galleries on Julia Street, and Sonya DiCarlo, co-owner of Clesi’s Restaurant and Catering on Bienville Street, both said they were able to quickly receive PPP loans and that the loans helped their businesses retain staff and stay open despite the pandemic’s financial challenges. Lemieux applied for the first round of loans, and Clesi’s applied for both the first and second round of loans.
“It was absolutely necessary,” DiCarlo said.
As a restaurant and catering business, Clesi’s was still able to serve some customers and earn money, even in the early days of the pandemic. But some businesses, like Lemieux Galleries, were forced to remain closed for over two months with at best very limited online sales only.
“It was enough to get us through a tough period with very little income because we were closed and it allowed us to keep our heads above water,” Wood said.
Wood said her bank (IberiaBank) was very helpful in getting her through the initial process. DiCarlo said the Louisiana Restaurant Association and New Orleans & Co. were very helpful in sharing important information and resources with her.
Vera Warren Williams, owner of the Community Book Center on Bayou Road, applied for an Economic Injury Disaster Loan (EIDL) in July. A problem arose when Williams learned her email address was incorrect in the EIDL system. So she was not getting important updates on the next steps she needed to take. Calling for assistance via the phone was not easy.
“They were probably overwhelmed,” Williams said. “The people I was talking to didn’t have the power to fix the problem and the people I had to speak to, their lines were always tied up.”
Williams did receive her loan in February of this year. While the process was not always easy, she is grateful to have the assistance.
“Better late than never,” Williams said. But for some locally-owned businesses, even a PPP loan has not been enough to save them.
Wendeslaus Schultz, owner of the recently closed Chalmette Movies, said the theater received a $37,000 PPP loan in June. They reopened, but closed about two months later. Schultz said it was from a combination of capacity restrictions for movie theaters plus Hollywood’s near-total refusal to release new movies exclusively to theaters since March 2020.
In February, Chalmette Movies was no longer able to even afford to continue renting out their space on Judge Perez Dr. until they could reopen again. Schultz said he hopes to try again, but the future is too uncertain to make any definite statement about a return.
This article originally published in the March 1, 2021 print edition of The Louisiana Weekly newspaper.
