A federal loan for small businesses provided immediate relief to Etcetera Wine Bar; owner Alexandra Gerteis was able to hire all her staff back, and even add new employees, just in time for the bar to reopen for the warm summer months.
But since then, Gerteis has struggled to secure additional funds, despite filling out every grant application she can get her hands on. And, one year into the pandemic, foot traffic is still low and small expenses are piling up. She sees the scrapes on her tables and chairs, accumulated from daily trips outside, with a sense of foreboding. Who is going to pay for that?
“It’s the little stuff, but it counts,” she said. “You don’t want to be sitting on a chair about to collapse.”
Over the last year, governments at the city, state and federal levels have launched a myriad of grant and loan programs to help out small businesses. While the money has been gratefully accepted, some small business owners say they’re still struggling, and are worried that business won’t keep pace with reopening.
Of these funding programs, the federal Paycheck Protection Program (PPP) loan, which Etcetera received, is perhaps the largest, offering loans of up to two and a half times a business’ monthly payroll costs. Applications for a second round of PPP funding are now underway.
HOMEY, a nonprofit that pivoted from community justice to food donations, received about $60,000 through the PPP program. Executive Director Roberto Alfaro said the loan came at a critical time when there was more confusion about how grants and reimbursements would work, allowing the nonprofit to maintain staffing levels and track down other ways to get funding.
“It was really, really useful for us to keep continuity,” Alfaro said, adding that HOMEY is not applying for a second PPP loan. “Had it not been for that, we would have had a really hard time making payroll and making sure things continued smoothly at the organization.”
The city has also committed nearly $24 million to provide financial relief for small businesses through various grant and loan programs, supported by public and private partnerships. The money has so far been doled out to over 1,300 small businesses in increments of mostly $10,000 and under. And demand is high: For the grant funding opportunities, the city has received about 8,500 applications and given out about 1,000 awards.
“The reality is that no city has the resources to meet a crisis of these proportions alone, not San Francisco, not New York, not London or Tokyo,” wrote OEWD spokesperson Diana Ponce De Leon in an email. “We are seeing the same challenging issue at the state and local level across the nation — the federal government relief efforts and stimulus spending will have the furthest reach.”
The most recent federal stimulus bill offers additional relief for small businesses, including $28 billion for hard-hit food service businesses, dubbed the Restaurant Revitalization Fund. It also allocates an additional $7 billion for the PPP program.
Ponce De Leon added that city funds have focused on prioritizing those that have had a difficult time benefiting from federal support. Some 57.6 percent of city grants have gone to women-owned businesses and 67.6 percent to minority-owned businesses.
Legal immigration status is not a factor when applying to city programs, as long as applying businesses meet the criteria of the grant or loan, according to De Leon. The city’s SF Shines grant for reimbursement for costs to operate safely, for example, does not ask the applicant for a social security number or immigration status. Undocumented small business owners are generally not eligible for federal programs like the PPP loans.
The money is certainly useful, business owners say, but in those quantities, it’s the equivalent of fixing a leaky faucet in a burning building — a way to tide over landlords or pay for some small expenses, but not enough to make up the major loss of revenue over the past year.
“$2,000 is a lot of money for most people, but in a business like mine, that lasts about three days,” said Lisa Sherratt, owner of Serendipity Cards & Gifts, who received that amount through a city-funded Women’s Empowerment Mini-Grant. “It probably went in my bank account and was gone by the weekend, going toward payroll taxes, sales taxes and merchandising.”
At Adobe Books, the $5,000 in relief from the city’s Resiliency Fund went straight to rent, according to Heather Holt, one of the volunteers at the store. The store still owes just shy of $5,000 in rent, which for now, it will hang on to as a liability.
“We don’t have any way to pay that back right now,” she said, adding that their landlord has worked with Adobe on payment and is not threatening the store with eviction.
Many business owners would appreciate more help from the city but are not holding their breath for it. For her part, Holt hopes the city will consider implementing a rent forgiveness program for businesses that are still hanging on but still owe money for rent.
Sherratt of Serendipity said small businesses will hustle to find a way to stay afloat, including Serendipity, which has the revenue to continue, even though business is still down 30 percent from usual.
But she’s not sure if she will continue running the business if conditions don’t improve. She’s had to take on a second job and a 40-percent pay cut from her business.
“I’ve had a great 11 years at that location, I’ve enjoyed it, but I can’t continue like this,” she said.
And as the pandemic comes to a close, business owners said it does not necessarily mean that businesses will return to pre-pandemic levels of operation — further reason for the city to consider additional ways to fund them.
Georgia Rew, owner of The Pretty Pretty Collective and recipient of a Resiliency Fund grant, said that recovery will likely take years.
“Even when we can open at 100 percent capacity, we won’t be at 100 percent business without the clients,” she said. “And everyone is going to want something — money, taxes, everything.”