’We’re losing money:’ Small Idaho businesses grasp at lifelines to survive coronavirus
The drop in business at Meraki Greek Street Food came the day Idaho’s first coronavirus diagnosis was announced. It was March 13. Friday the 13th.
“We had our normal Friday lunch crowd that day,” owner Aki Kalatzakis said by phone. “But once that case was announced, that Friday night dinner was pretty much dead, along with Saturday.”
With only takeout and delivery options since Boise Mayor Lauren McLean ordered a ban on in-restaurant dining six days later, Meraki’s sales of pork, chicken and lamb gyros and other Greek specialties have plummeted 50% to 60%. The 3-year-old BoDo restaurant is turning to a coronavirus stimulus loan to survive.
Kalatzakis and his wife, Farah, were approved on Wednesday for a $43,000 forgivable loan through the Payroll Protection Program administered by the Small Business Administration. It pays for eight weeks of a business’s payroll costs to allow workers to be kept on or rehired. Twenty-five percent can be used to pay rent and other business expenses.
The loans are a lifeline to 30 million small businesses identified by the SBA across the nation. Despite a rocky start, the government reports that more than 578,000 businesses have been approved for forgivable loans worth $149 billion so far.
Interest is so intense that Senate Majority Leader Mitch McConnell is pushing legislation to expand the loans beyond the $350 billion authorized in the $2.2 trillion coronavirus-relief bill signed by President Donald Trump on March 27.
Borrowers can apply for forgiveness from their loan providers. They will be required to provide documentation to verify the number of full-time-equivalent employees and pay rates, along with payments for mortgages, leases and utility costs.
Employers have until June 30 to restore full-time employment and salary levels for any changes made between Feb. 15 and April 26. Forgiveness will be reduced if the employer decreases wages by more than 25% for any workers who earned less than $100,000 on an annualized basis in 2019.
If the loans aren’t forgiven, borrowers are responsible to begin paying them back six months later and have two years to pay them off at 1% interest.
The loan, the Meraki owners said, was critical.
“Most days we’re losing money and some days breaking even,” Farah Kalatzakis said. “We kept hanging in there and hoping the loan funding would become available and help us offset some of our costs.”
The couple expects the money to be deposited into their bank account within 10 to 15 days of the approval.
The shop at 345 S. 8th St. employees 16 workers. About half were Boise State University students who returned to their home cities when the university campus shut down. The restaurant now has eight employees working on reduced hours.
The priority will be to get those workers back up to full-time hours and rehire those who left when they return to Boise this fall, Aki Kalatzakis said. When the restaurant reopens to diners, other employees may need to be hired. It will depend on business, he said.
Hair and skincare salon sees sales die after closing
Rachelle Alumbaugh, owner of Visual Effects Salon & Spa, which offers hair and skin-care services, already applied for the Paycheck Protection Program.
“It’s been over a week,” she said Friday by phone. “We haven’t heard anything. We never got an email or confirmation or anything.“
She was preparing to submit an application for an existing economic injury disaster loan program. Expanded because of the coronavirus pandemic, the program provides low-interest loans to cover most business expenses. A portion of that loan does not have to be paid back.
All 29 workers at Visual Effects, 4485 N. Dresden Place, south of West Chinden Boulevard and west of North Glenwood Street, are independent contractors. They set their own hours and fees and pay Alumbaugh rent. The shop closed after Little issued his March 25 order forcing nonessential businesses to shut their doors.
“So I haven’t collected any rent,” Alumbaugh said by phone.
She’s tried to sell gift cards for future services and hair-care products such as shampoo, but that hasn’t brought in anywhere close to what the salon earns when it’s operating, she said.
“We’re ready to get back to work,” Alumbaugh said.
Import shop moves inventory online
Mishell VandenBusch, owner of Eyes of the World Imports at 1576 W. Grove St. in Boise, has also applied for both the Paycheck Protection and disaster relief programs. She said she hoped to hear back on Friday about her application, but had not.
“We closed our store on March 16, rather abruptly, knowing the virus was increasing and we felt it was the right thing to do for our community,” VandenBusch said by phone. “So our sales stopped at that point.”
She created an e-commerce site on the company’s website. It took two week, she said, to get the store’s products — clothing, jewelry, meditation supplies, gemstones and home decor — loaded onto the website for sale.
The store, in business for 25 years, employs six other people. Receiving a loan would help the store stay in business and keep her workers employed. A couple of managers are working reduced hours to handle shipping online purchases. With the loan, she plans to rehire her other workers who have been laid off.
“The virus has definitely impacted everyone in some way and we’re all going to lose somewhere,” she said. “But I think once that opportunity hits for businesses to open again, the nonessential businesses are just going to have to do our best to take off where we left off, think good thoughts and be grateful for any business.”
Business assistance is available
The $2 trilllion federal stimulus bill approved last month by Congress includes $377 billion to help small businesses affected by the coronavirus pandemic.
Cash grants, low-interest loans and payments can be used to offset eight weeks of payroll costs for businesses to retain employees or bring back ones who were laid off. The relief also includes $600 a week for laid-off workers to supplement state unemployment payments and money for paid leave.
By Friday morning, loans valued at more than $149 billion had been approved for more than 578,000 businesses nationwide under the Paycheck Protection Program, Melanie Norton, regional spokeswoman for the Small Business Administration said by email. She did not have a breakdown for Idaho or amounts issued under the disaster relief program tied to the coronavirus.
“The SBA team is working with lenders, partners and government officials to do everything we can to help small businesses recover and get back on their feet,” Jeremy Field, a Boise native who serves as the Northwest regional administrator for the SBA, said in a statement.
Friday was the first day for self-employed business owners and independent contractors to apply for Paycheck Protection Program loans to cover payroll and other expenses.
More than 4,100 banks and credit unions nationwide are offering Paycheck Payment Program loans. Information on it and the disaster relief program are available online.
KTVB-TV first reported on Meraki being approved for a federal loan.
