1 00:00:01,440 --> 00:00:05,240 Speaker 1: It's the American dream. Entrepreneurs across the country starting their 2 00:00:05,280 --> 00:00:08,840 Speaker 1: own business. It's the biggest job creation vehicles the nation 3 00:00:08,880 --> 00:00:12,440 Speaker 1: has ever seen. Small businesses are credited for two thirds 4 00:00:12,480 --> 00:00:15,720 Speaker 1: of all US jobs over the past decade. These companies 5 00:00:15,800 --> 00:00:17,960 Speaker 1: came into the year with a head full of steam. 6 00:00:18,239 --> 00:00:22,560 Speaker 1: Then the coronavirus hit and the momentum just stopped. A 7 00:00:22,640 --> 00:00:26,000 Speaker 1: full forty of small businesses do not think they're going 8 00:00:26,040 --> 00:00:28,640 Speaker 1: to survive. They're just a lot of smaller businesses that 9 00:00:28,760 --> 00:00:30,600 Speaker 1: will struggle to make it through this winter. It's all 10 00:00:30,640 --> 00:00:33,519 Speaker 1: local small businesses, that's who is bearing the brunt of this. 11 00:00:33,720 --> 00:00:36,240 Speaker 1: We just don't know how long we might be able 12 00:00:36,280 --> 00:00:39,000 Speaker 1: to stay afloat. Everybody's going to be out of work, 13 00:00:39,040 --> 00:00:40,800 Speaker 1: and I'm just going to be deeper in debt. It's 14 00:00:40,840 --> 00:00:44,879 Speaker 1: been very, very bad for a family for you know, 15 00:00:44,920 --> 00:00:48,080 Speaker 1: the government programs were designed to bail out the big boys, 16 00:00:48,159 --> 00:00:51,680 Speaker 1: but they left Main Street on. Since the start of 17 00:00:51,720 --> 00:00:54,400 Speaker 1: the pandemic, we spoke to more than a hundred business 18 00:00:54,400 --> 00:00:58,640 Speaker 1: owners across the country. Many shut their doors, some survived, 19 00:00:59,040 --> 00:01:02,720 Speaker 1: some adapted, and some suffered personal tragedies while trying to 20 00:01:02,800 --> 00:01:08,880 Speaker 1: keep their business afloat. This is their story. Thanks for 21 00:01:08,959 --> 00:01:12,360 Speaker 1: joining us on this Bloomberg Radio special report examining the 22 00:01:12,400 --> 00:01:17,400 Speaker 1: pandemics outsized impact on small business Si bassk and I'm 23 00:01:17,480 --> 00:01:20,880 Speaker 1: John Tucker. It's been nine months since lockdowns hit much 24 00:01:20,880 --> 00:01:23,880 Speaker 1: of the country and doors have reopened at a number 25 00:01:23,920 --> 00:01:27,919 Speaker 1: of storefronts, but still two out of every five small 26 00:01:27,959 --> 00:01:31,640 Speaker 1: businesses tell Goldman Sachs they're not sure if they all survive, 27 00:01:31,880 --> 00:01:35,479 Speaker 1: and ten million people remain unemployed. We spoke to business 28 00:01:35,520 --> 00:01:38,760 Speaker 1: owners across the country about their troubles, and there have 29 00:01:38,840 --> 00:01:42,040 Speaker 1: been many, but perhaps the worst of those struggles is 30 00:01:42,120 --> 00:01:46,120 Speaker 1: the personal tragedies that were endured. David Carberry runs a 31 00:01:46,120 --> 00:01:50,320 Speaker 1: digital marketing firm headquartered in Baltimore. When the pandemic hit, 32 00:01:50,520 --> 00:01:54,120 Speaker 1: his sales were nearly cut in half, and then his 33 00:01:54,240 --> 00:01:57,160 Speaker 1: father caught COVID while going to the hospital for a 34 00:01:57,280 --> 00:02:00,880 Speaker 1: simple procedure. It was in April. My dad had just 35 00:02:01,040 --> 00:02:04,240 Speaker 1: had surgery in March and we had to put him 36 00:02:04,240 --> 00:02:07,320 Speaker 1: into a unit just for physical therapy. Um he had 37 00:02:07,320 --> 00:02:10,639 Speaker 1: god about a replacement and with them we weren't allowed 38 00:02:10,639 --> 00:02:13,280 Speaker 1: to see him, and the facility caught COVID and he 39 00:02:13,320 --> 00:02:16,560 Speaker 1: did They They took him to the hospital and he 40 00:02:16,600 --> 00:02:19,480 Speaker 1: was on Evan for a couple of weeks. Unfortunately lost 41 00:02:19,560 --> 00:02:21,959 Speaker 1: him like in the beginning of May, so it was 42 00:02:21,960 --> 00:02:26,320 Speaker 1: pretty traumatic for us. Then there's literally Pacheco's whose translation 43 00:02:26,400 --> 00:02:29,960 Speaker 1: business also suffered from the onset of the pandemic shortly 44 00:02:30,000 --> 00:02:33,000 Speaker 1: after her father fell ill and she couldn't be there. 45 00:02:33,600 --> 00:02:38,360 Speaker 1: On April sixteen, My dad was really really sick. Um 46 00:02:38,520 --> 00:02:41,960 Speaker 1: he can hardly briefe we Um called the ambulance. He 47 00:02:42,000 --> 00:02:43,960 Speaker 1: didn't make it. He didn't make it. He already had 48 00:02:44,000 --> 00:02:47,360 Speaker 1: passed on the couch. Um. So I witnessed all of 49 00:02:47,400 --> 00:02:49,960 Speaker 1: this on the video. Normally I would have been there 50 00:02:50,000 --> 00:02:52,800 Speaker 1: in person, right and you know, were stuck in quarantine, 51 00:02:52,840 --> 00:02:55,519 Speaker 1: and all I was able to do was just watch 52 00:02:55,680 --> 00:02:59,600 Speaker 1: from from the video. So it was really hard. And 53 00:02:59,720 --> 00:03:02,800 Speaker 1: so many cities across the country, there are hundreds of 54 00:03:02,880 --> 00:03:06,880 Speaker 1: stories just like David's and Lilies. In their cases, personal 55 00:03:06,880 --> 00:03:11,079 Speaker 1: tragedy coincided with business trouble, but more often we've seen 56 00:03:11,080 --> 00:03:14,600 Speaker 1: the business trouble turn into a different kind of tragedy, 57 00:03:14,720 --> 00:03:18,480 Speaker 1: employers having to shut the doors, laying off friends and family. 58 00:03:18,840 --> 00:03:21,840 Speaker 1: For John's Grill in San Francisco, this year was the 59 00:03:21,880 --> 00:03:26,000 Speaker 1: worst in the restaurant's one twelve year history, open since 60 00:03:26,120 --> 00:03:29,520 Speaker 1: nineteen o eight, owner John Constant is the latest in 61 00:03:29,600 --> 00:03:32,720 Speaker 1: our long line of constants to run the business. We 62 00:03:32,760 --> 00:03:36,080 Speaker 1: spoke to him back in March. This is my first 63 00:03:36,120 --> 00:03:41,280 Speaker 1: experience with something that's catastrophic. It's been very very sad 64 00:03:41,320 --> 00:03:45,520 Speaker 1: for our family, for our staff specifically, so I had 65 00:03:45,560 --> 00:03:49,880 Speaker 1: to get the staff together and have that very very 66 00:03:49,880 --> 00:03:52,720 Speaker 1: tough conversation with them because most of most of our 67 00:03:52,800 --> 00:03:56,480 Speaker 1: staff has worked with us for five years, ten years, 68 00:03:56,600 --> 00:04:00,240 Speaker 1: fifteen years, thirty years, so we have a long ten 69 00:04:00,320 --> 00:04:04,000 Speaker 1: years staff. It was the saddest day of my professional career. 70 00:04:04,040 --> 00:04:07,320 Speaker 1: I think we're all pretty much a family in there. 71 00:04:07,760 --> 00:04:10,400 Speaker 1: Most of these guys have seen me grow up as 72 00:04:10,400 --> 00:04:13,200 Speaker 1: a kid, you know, and so it was it was 73 00:04:13,240 --> 00:04:17,800 Speaker 1: a really tough tough time. We've got our staff on 74 00:04:17,880 --> 00:04:21,360 Speaker 1: medical insurance until the end of April, and we will 75 00:04:21,440 --> 00:04:24,159 Speaker 1: probably be one of the first restaurants open our doors 76 00:04:24,160 --> 00:04:29,080 Speaker 1: for patrons once COVID nineteen is over. John's Grill did 77 00:04:29,120 --> 00:04:32,839 Speaker 1: reopen and added seating outdoors, but just this month it 78 00:04:32,920 --> 00:04:37,120 Speaker 1: was forced to close again. And underrepresented communities have shown 79 00:04:37,120 --> 00:04:39,800 Speaker 1: to be some of the hardest hit in this pandemic, 80 00:04:40,279 --> 00:04:43,320 Speaker 1: so our businesses that are black owned and women owned. 81 00:04:43,520 --> 00:04:46,640 Speaker 1: The Bank Street Bookstore in Manhattan was founded and run 82 00:04:46,640 --> 00:04:49,839 Speaker 1: by women, and after forty years, one of the last 83 00:04:49,839 --> 00:04:53,720 Speaker 1: sellers of children's books in New York City is closing. 84 00:04:54,120 --> 00:04:56,960 Speaker 1: I mean, we've been a corner stone of the neighborhood 85 00:04:57,320 --> 00:04:59,680 Speaker 1: since we've been here for a most fifty years. We 86 00:04:59,800 --> 00:05:03,360 Speaker 1: have folks coming in who remember coming when they were 87 00:05:03,400 --> 00:05:06,400 Speaker 1: a kid and now are bringing their children, or people 88 00:05:06,400 --> 00:05:09,719 Speaker 1: who live in the neighborhood who just had kids and 89 00:05:09,960 --> 00:05:13,360 Speaker 1: are really sad that they won't be able to have 90 00:05:13,480 --> 00:05:18,280 Speaker 1: their children grow up here. At the start of the pandemic, 91 00:05:18,320 --> 00:05:21,279 Speaker 1: there was a big government push to rescue small business 92 00:05:21,320 --> 00:05:25,080 Speaker 1: from financial ruin. Billions of dollars were made available through 93 00:05:25,120 --> 00:05:28,920 Speaker 1: the Paycheck Protection Program, but firms that borrowed largely ran 94 00:05:28,960 --> 00:05:32,000 Speaker 1: out of money by October. Margaret and Nadu works at 95 00:05:32,040 --> 00:05:36,159 Speaker 1: Goldman Sachs. Her job is investing in underserved communities. She 96 00:05:36,320 --> 00:05:39,240 Speaker 1: says more than forty percent of business owners had to 97 00:05:39,320 --> 00:05:43,400 Speaker 1: layoff staff or cut jobs by November, and many said 98 00:05:43,400 --> 00:05:45,520 Speaker 1: they wouldn't make it through the year. And it goes 99 00:05:45,560 --> 00:05:48,680 Speaker 1: beyond the business owners. There's also fifty two percent of 100 00:05:48,680 --> 00:05:51,839 Speaker 1: these small businesses that have foregone pay themselves, right, And 101 00:05:51,880 --> 00:05:54,839 Speaker 1: it's not it's not like we can isolate small businesses 102 00:05:54,880 --> 00:05:57,919 Speaker 1: like there's some aspect of the economy that's off to 103 00:05:57,960 --> 00:06:00,560 Speaker 1: the side. When you have small business owners who aren't 104 00:06:00,600 --> 00:06:03,839 Speaker 1: paying themselves, that struggled with your mortgage, that's a struggle 105 00:06:03,880 --> 00:06:05,800 Speaker 1: with your rent, that's a struggle with how you pay 106 00:06:05,839 --> 00:06:08,599 Speaker 1: for your health care, and so that impact on the economy. 107 00:06:08,720 --> 00:06:11,039 Speaker 1: It's not a it's not a future issue. That's where 108 00:06:11,080 --> 00:06:13,839 Speaker 1: we are now. And the real concern here is if 109 00:06:13,880 --> 00:06:19,200 Speaker 1: that impact becomes permanent. Scott Minored at Googenheim Investments thinks 110 00:06:19,400 --> 00:06:22,120 Speaker 1: it will be the p p P, which was a 111 00:06:22,200 --> 00:06:26,200 Speaker 1: great program as an emergency stock gap. You know, of 112 00:06:26,240 --> 00:06:29,800 Speaker 1: course it's gone, so you know we're going to start 113 00:06:29,839 --> 00:06:33,880 Speaker 1: seeing layoffs here. And structurally, more than half of the 114 00:06:34,320 --> 00:06:38,480 Speaker 1: Americans are employed by small to medium sized business um. 115 00:06:38,520 --> 00:06:41,280 Speaker 1: A lot of those businesses are never coming back. Some 116 00:06:41,360 --> 00:06:44,080 Speaker 1: won't make it out of the pandemic, but many will 117 00:06:44,440 --> 00:06:46,760 Speaker 1: thanks to quick aid from the government. Back in March, 118 00:06:47,240 --> 00:06:50,880 Speaker 1: the Paycheck Protection Program gave more than five billion companies 119 00:06:50,920 --> 00:06:54,480 Speaker 1: a lifeline in the form of half a trillion dollars. 120 00:06:54,920 --> 00:06:58,719 Speaker 1: In that cash helped Aaron Anchor's granola company in northern 121 00:06:58,760 --> 00:07:01,840 Speaker 1: Maine get back on its feet after the early days 122 00:07:01,880 --> 00:07:04,200 Speaker 1: of the pandemic. You know, you had to work with 123 00:07:04,240 --> 00:07:06,159 Speaker 1: your local bank on that or your bank, you know, 124 00:07:06,320 --> 00:07:09,320 Speaker 1: whatever bank used, and our local bank was phenomenal, so 125 00:07:09,360 --> 00:07:10,960 Speaker 1: we just decided to go with what we knew. We 126 00:07:11,040 --> 00:07:14,560 Speaker 1: furloughed about sixteen people and as of now, we've brought 127 00:07:14,560 --> 00:07:17,200 Speaker 1: almost all of them back. Anybody that we could we've 128 00:07:17,240 --> 00:07:19,840 Speaker 1: brought back. So it was very exciting and the PPP 129 00:07:20,000 --> 00:07:23,400 Speaker 1: was very helpful that At the same time, small business 130 00:07:23,400 --> 00:07:27,800 Speaker 1: owners say, p p P was also plagued by several hurdles. 131 00:07:27,840 --> 00:07:30,760 Speaker 1: Some smaller firms found it difficult to even get a loan. 132 00:07:31,440 --> 00:07:34,320 Speaker 1: We spoke with Brad Close, the president of the National 133 00:07:34,360 --> 00:07:37,840 Speaker 1: Federation of Independent Business. You know, we saw a very, 134 00:07:38,000 --> 00:07:41,520 Speaker 1: very poor rollout back in April um. The big banks 135 00:07:41,600 --> 00:07:45,760 Speaker 1: mostly sent those loans to longtime customers, much larger businesses 136 00:07:45,760 --> 00:07:48,920 Speaker 1: than a typical small business. You know, our average members 137 00:07:48,960 --> 00:07:51,920 Speaker 1: five to ten employees. That's very common for small businesses. 138 00:07:52,000 --> 00:07:54,720 Speaker 1: We are talking true small businesses, the one you find 139 00:07:54,720 --> 00:07:57,800 Speaker 1: in communities all across America. They struggled to get the 140 00:07:57,840 --> 00:08:01,360 Speaker 1: banks to pay attention to them. That frustration was rampant. 141 00:08:01,360 --> 00:08:04,080 Speaker 1: In the early days of the program. Jim Smith applied 142 00:08:04,080 --> 00:08:06,600 Speaker 1: for a p p P loan to help his advertising 143 00:08:06,640 --> 00:08:10,280 Speaker 1: company in Irvington, New York. We did apply, and I 144 00:08:10,320 --> 00:08:14,840 Speaker 1: think it's been well documented how frustrating and difficult that 145 00:08:15,000 --> 00:08:17,400 Speaker 1: experience has been. You know, the bank that we were 146 00:08:17,480 --> 00:08:21,880 Speaker 1: using was really prioritizing their private clients and basically telling 147 00:08:21,920 --> 00:08:25,680 Speaker 1: their relationship managers not to help to facilitate the loan 148 00:08:25,800 --> 00:08:29,880 Speaker 1: process for their smaller clients that don't have a minimum 149 00:08:29,880 --> 00:08:34,240 Speaker 1: of ten million dollars in active business. So we'll see 150 00:08:34,240 --> 00:08:36,920 Speaker 1: what happens. I know, everyone I know is really anxious 151 00:08:36,920 --> 00:08:39,360 Speaker 1: about what's going to happen now with the next round. 152 00:08:39,800 --> 00:08:44,000 Speaker 1: But let's just say that nobody really has any confidence 153 00:08:44,600 --> 00:08:47,040 Speaker 1: when it comes to p p P loans. More than 154 00:08:47,120 --> 00:08:49,920 Speaker 1: twenty five per cent of the money went to just 155 00:08:50,200 --> 00:08:54,320 Speaker 1: one percent of the borrowers. Those are mostly large firms 156 00:08:54,559 --> 00:08:57,800 Speaker 1: seeking loans north of a million dollars. Lots of people 157 00:08:57,880 --> 00:09:00,720 Speaker 1: we spoke to had a tough time accessing the program. 158 00:09:00,880 --> 00:09:04,839 Speaker 1: Small business owners like Frank Knapp described a wide range 159 00:09:04,840 --> 00:09:08,160 Speaker 1: of hurdles. Franco owns a firm in South Carolina and 160 00:09:08,240 --> 00:09:10,800 Speaker 1: also heads up the Chamber of Commerce in the City 161 00:09:10,840 --> 00:09:13,520 Speaker 1: of Columbia. So there's no doubt about it that that 162 00:09:13,640 --> 00:09:17,240 Speaker 1: P p P loans were important. But you know, only 163 00:09:17,400 --> 00:09:22,079 Speaker 1: six all the small businesses in this country received a 164 00:09:22,160 --> 00:09:26,720 Speaker 1: p p P loan out of the thirty million small businesses. Uh, 165 00:09:27,120 --> 00:09:29,719 Speaker 1: it's a poultry amount. The people who were left out, 166 00:09:29,760 --> 00:09:33,200 Speaker 1: the small business owners who were left out were sole proprietors, uh, 167 00:09:33,280 --> 00:09:36,439 Speaker 1: they were micro businesses and a lot of those public 168 00:09:36,480 --> 00:09:40,240 Speaker 1: the majority were people of color and women. They just 169 00:09:40,240 --> 00:09:43,800 Speaker 1: didn't have the banking relationships to get a loan approved, 170 00:09:44,040 --> 00:09:47,240 Speaker 1: or they didn't have the resources to go ahead and 171 00:09:47,280 --> 00:09:50,200 Speaker 1: fill out the application appropriately, or maybe didn't even have 172 00:09:50,360 --> 00:09:52,679 Speaker 1: the forms from the I R S to do it. 173 00:09:52,960 --> 00:09:57,079 Speaker 1: So we've got major issues here. It's true that black 174 00:09:57,120 --> 00:10:01,199 Speaker 1: owned firms have been disproportionately hit, and so have Latino 175 00:10:01,280 --> 00:10:06,120 Speaker 1: owned firms. Westmore, CEO of the Robin Hood Foundation, has 176 00:10:06,120 --> 00:10:10,040 Speaker 1: been working with corporations and donors to support those businesses. 177 00:10:10,440 --> 00:10:13,440 Speaker 1: It is a massive problem, and frankly, it was something 178 00:10:13,440 --> 00:10:15,960 Speaker 1: that we have been calling out for a while. Uh. 179 00:10:16,000 --> 00:10:19,120 Speaker 1: And we even saw it when when the proposed Cares Act, 180 00:10:19,120 --> 00:10:22,319 Speaker 1: the initial Cares Act was being pulled together because people 181 00:10:22,320 --> 00:10:24,920 Speaker 1: will say, well, there was a cash assistance element to 182 00:10:24,920 --> 00:10:28,480 Speaker 1: the Cares Act. That's true. However, the cash assistant elements 183 00:10:28,520 --> 00:10:31,120 Speaker 1: of the Cares Act left out millions of people, and 184 00:10:31,160 --> 00:10:34,480 Speaker 1: it left them out intention So, for example, if you 185 00:10:34,520 --> 00:10:37,440 Speaker 1: were undocumented, there was no cash assistance element to the 186 00:10:37,440 --> 00:10:39,080 Speaker 1: Cares Act for you. If you were part of a 187 00:10:39,120 --> 00:10:41,920 Speaker 1: mixed status household, there was no cash assistance for you. 188 00:10:41,960 --> 00:10:44,120 Speaker 1: If you were a student, even if you were working, 189 00:10:44,120 --> 00:10:47,680 Speaker 1: there was no cash assistance element. If you were working 190 00:10:48,000 --> 00:10:50,360 Speaker 1: but not making enough money to hit the income tax 191 00:10:50,360 --> 00:10:54,000 Speaker 1: filing threshold, there was no cash assistance left for you, 192 00:10:54,480 --> 00:10:57,840 Speaker 1: and even those that did receive assistance ran into issues. 193 00:10:58,160 --> 00:11:01,959 Speaker 1: Bloomberg reporters Sally Bakewell spoke to dozens of business owners 194 00:11:02,000 --> 00:11:05,880 Speaker 1: describing red tape that was both timely and costly. The 195 00:11:05,920 --> 00:11:10,000 Speaker 1: business landscape in America is littered with stories like these. 196 00:11:10,360 --> 00:11:13,199 Speaker 1: I spoke to the owner of a Vinyl records store 197 00:11:13,360 --> 00:11:16,520 Speaker 1: in Columbia, South Carolina, and he had got a twenty 198 00:11:16,559 --> 00:11:19,400 Speaker 1: seven thousand p p P loan, but he still had 199 00:11:19,440 --> 00:11:23,400 Speaker 1: to dock his own salary to keep going. Um Or 200 00:11:23,520 --> 00:11:26,560 Speaker 1: there was the owner of a all female boxing gym 201 00:11:26,720 --> 00:11:30,400 Speaker 1: in North Attleborough, Massachusetts. She had her PP application handed 202 00:11:30,440 --> 00:11:32,840 Speaker 1: straight back to her on the same day that she 203 00:11:32,920 --> 00:11:35,120 Speaker 1: applied by the bank because they thought there was too 204 00:11:35,200 --> 00:11:37,920 Speaker 1: much red tape UM and so she had to use 205 00:11:37,920 --> 00:11:41,720 Speaker 1: her stimulus check to keep her business going. Um I 206 00:11:41,800 --> 00:11:44,719 Speaker 1: then spoke to a business owner in Colorado and she 207 00:11:44,840 --> 00:11:49,120 Speaker 1: was setting up a sustainable goods business UM and because 208 00:11:49,160 --> 00:11:52,920 Speaker 1: of COVID, she lost her one contract because it was 209 00:11:52,920 --> 00:11:55,000 Speaker 1: with a school who wanted to buy some of her 210 00:11:55,000 --> 00:12:00,320 Speaker 1: sustainable trades for their cafeterias cafeterias, so she led for 211 00:12:00,400 --> 00:12:03,520 Speaker 1: P p P and she applied for another type of 212 00:12:03,559 --> 00:12:09,480 Speaker 1: emergency assistance loan. She had both of her applications rejected UM. 213 00:12:09,520 --> 00:12:11,760 Speaker 1: She told me that one of them at one point 214 00:12:11,760 --> 00:12:14,760 Speaker 1: they told her they had lost her application UM and 215 00:12:14,840 --> 00:12:17,920 Speaker 1: that she needed to submit her financial details again and 216 00:12:17,960 --> 00:12:20,160 Speaker 1: then when she went through all of that, there was 217 00:12:20,200 --> 00:12:23,760 Speaker 1: no money left anyway. She was told there are stories 218 00:12:23,800 --> 00:12:26,200 Speaker 1: like that everywhere. You know. They did, they did the 219 00:12:26,240 --> 00:12:27,880 Speaker 1: right thing, They did what they could, they couldn't get 220 00:12:27,880 --> 00:12:29,840 Speaker 1: the money, or they got the money, they still couldn't 221 00:12:29,840 --> 00:12:32,880 Speaker 1: catch a break. Bank Street Bookstore in New York City 222 00:12:33,000 --> 00:12:36,000 Speaker 1: was one of the many small businesses unable to access 223 00:12:36,080 --> 00:12:39,840 Speaker 1: government aid. Caitlin Morrissey owns the fifty year old bookstore, 224 00:12:39,920 --> 00:12:42,800 Speaker 1: which started out in the lobby of Bank Street College. 225 00:12:43,080 --> 00:12:46,440 Speaker 1: Since we are attached to an educational institution, some of 226 00:12:46,559 --> 00:12:49,120 Speaker 1: the relief that would have been available if we were 227 00:12:49,120 --> 00:12:54,400 Speaker 1: a stand alone small business, unfortunately, it just wasn't available 228 00:12:54,600 --> 00:12:59,440 Speaker 1: to us. So while we've operated fairly independently, we are 229 00:12:59,640 --> 00:13:03,720 Speaker 1: under umbrella, so it affected what kinds of aid we 230 00:13:03,720 --> 00:13:07,960 Speaker 1: were applicable to that The troubles spanned the country and industries. 231 00:13:08,200 --> 00:13:12,320 Speaker 1: Alex Cuton ran a travel agency in Indiana and described 232 00:13:12,440 --> 00:13:17,200 Speaker 1: similar roadblocks accompanied by a few answers. As a small 233 00:13:17,280 --> 00:13:20,319 Speaker 1: business owner. You know, we're the last to get paid club. 234 00:13:20,520 --> 00:13:23,199 Speaker 1: You know, we pay our rent, we pay our employees, 235 00:13:23,320 --> 00:13:25,960 Speaker 1: we pay you know, everything that we owe and then 236 00:13:26,000 --> 00:13:28,960 Speaker 1: if there's anything left at the end of the year, 237 00:13:29,120 --> 00:13:31,720 Speaker 1: we get paid. And this year I don't look to 238 00:13:31,760 --> 00:13:36,280 Speaker 1: be making any money. Now, have you applied for aid? Yes, 239 00:13:36,480 --> 00:13:40,080 Speaker 1: during the time that the Cares Act ten thousand dollars. 240 00:13:40,080 --> 00:13:43,080 Speaker 1: You know that we were led to believe that we 241 00:13:43,120 --> 00:13:47,320 Speaker 1: would receive we applied for that immediately. Did I get it? No? 242 00:13:47,960 --> 00:13:51,280 Speaker 1: And then the p P. P Whenever that program was 243 00:13:51,320 --> 00:13:55,240 Speaker 1: announced and it came out, I applied immediately for that 244 00:13:55,520 --> 00:13:58,960 Speaker 1: and did I get it? No restrictions tied to COVID 245 00:13:59,080 --> 00:14:03,160 Speaker 1: nineteen have a small businesses across the country. Those that 246 00:14:03,240 --> 00:14:06,840 Speaker 1: managed to stay afloat survived by tapping into government aid 247 00:14:07,240 --> 00:14:10,880 Speaker 1: or by pivoting finding creative ways to survive or even 248 00:14:10,920 --> 00:14:14,160 Speaker 1: thrive in the face of the pandemic. John Pepper is 249 00:14:14,200 --> 00:14:16,960 Speaker 1: one of those small business owners. He runs a chain 250 00:14:17,040 --> 00:14:20,760 Speaker 1: of eight modern Mexican restaurants in the Boston area, which 251 00:14:20,760 --> 00:14:24,640 Speaker 1: he transformed to adapt to the outbreak. The Financial district 252 00:14:24,720 --> 00:14:27,520 Speaker 1: of Boston became a ghost town almost immediately. We closed 253 00:14:27,520 --> 00:14:31,280 Speaker 1: those four restaurants on the eighteenth of March. A week later, 254 00:14:31,320 --> 00:14:34,040 Speaker 1: I put out a video essentially two days before I 255 00:14:34,080 --> 00:14:36,240 Speaker 1: thought we had to close. The rest of everything staying. 256 00:14:36,280 --> 00:14:38,880 Speaker 1: Instead of letting everybody know we had closed, I felt 257 00:14:38,920 --> 00:14:41,400 Speaker 1: maybe I should let people know most likely we're going 258 00:14:41,440 --> 00:14:44,240 Speaker 1: to close, because I didn't see any avenue to stay open. 259 00:14:44,480 --> 00:14:48,320 Speaker 1: Turned out that that video caused a outcry of support. 260 00:14:48,360 --> 00:14:52,080 Speaker 1: We raised over sixty dollars. We basically pimoted into a 261 00:14:52,120 --> 00:14:55,360 Speaker 1: nonprofit model. For the last four weeks, we created this 262 00:14:55,440 --> 00:14:58,000 Speaker 1: feed the front line, which now very ubiquitous term. But 263 00:14:58,080 --> 00:15:01,360 Speaker 1: we ended up just keep the restaurants open to feed 264 00:15:01,480 --> 00:15:04,920 Speaker 1: hospital workers throughout Boston and throughout New England. That's how 265 00:15:04,920 --> 00:15:08,720 Speaker 1: we kept it going. Kim Strassner's business in Baltimore also 266 00:15:08,840 --> 00:15:13,040 Speaker 1: disappeared overnight. She made personalized cutting boards that were popular 267 00:15:13,120 --> 00:15:17,800 Speaker 1: as party favors. No parties meant no business. So what 268 00:15:17,880 --> 00:15:21,360 Speaker 1: we did is we pivoted. We've joined up with two 269 00:15:21,400 --> 00:15:26,160 Speaker 1: other local Baltimore companies and master seamstress Jill Andrews and 270 00:15:26,320 --> 00:15:31,280 Speaker 1: Dan Jansen with Imperium Shaving, and we are making cotton masks, 271 00:15:31,400 --> 00:15:35,480 Speaker 1: so we're using our laser engraver to cut the fabric. 272 00:15:36,360 --> 00:15:41,560 Speaker 1: Jilly Andrews, she designed the pattern and that business is 273 00:15:41,600 --> 00:15:44,080 Speaker 1: doing really well as you can expect. What is the 274 00:15:44,120 --> 00:15:47,360 Speaker 1: difference in revenue from the traditional business to what you've 275 00:15:47,360 --> 00:15:50,720 Speaker 1: pivoted to now, is that enough to sustain the business? 276 00:15:51,200 --> 00:15:54,080 Speaker 1: You know, my husband locked his job, so we're you know, 277 00:15:54,240 --> 00:15:57,680 Speaker 1: definitely as a household are income you know is down, 278 00:15:57,960 --> 00:16:01,000 Speaker 1: and you know we're trying to pay our employees at 279 00:16:01,000 --> 00:16:03,480 Speaker 1: fair price and sell the masks for a fair price. 280 00:16:03,680 --> 00:16:05,560 Speaker 1: We're not gonna get rich off of this. You know, 281 00:16:05,960 --> 00:16:08,920 Speaker 1: it's just we saw it need. It's not something you know, 282 00:16:09,000 --> 00:16:11,480 Speaker 1: we're going to get rich off of. Kimi Strassner and 283 00:16:11,600 --> 00:16:15,400 Speaker 1: John Pepper adapted to survive, but other entrepreneurs we spoke 284 00:16:15,440 --> 00:16:19,160 Speaker 1: to made more dramatic changes that sometimes saw a business 285 00:16:19,200 --> 00:16:23,000 Speaker 1: more than double. Alex Carroll ran a tailgate events business 286 00:16:23,080 --> 00:16:26,520 Speaker 1: which ground to a halt when the NBA canceled its season, 287 00:16:27,080 --> 00:16:30,440 Speaker 1: so he got creative. It was a sad moment. I mean, 288 00:16:30,680 --> 00:16:33,280 Speaker 1: I won't lie. We spent a day kind of just 289 00:16:33,480 --> 00:16:37,240 Speaker 1: laying around feeling sorry for ourselves, and then we quickly realized, hey, 290 00:16:37,280 --> 00:16:40,680 Speaker 1: what can we do to get our employees back because 291 00:16:40,680 --> 00:16:43,200 Speaker 1: we had to furlough all of them. And so that's 292 00:16:43,240 --> 00:16:45,880 Speaker 1: when we started to think, when events do come back, 293 00:16:46,280 --> 00:16:48,120 Speaker 1: what are they going to need. We knew they were 294 00:16:48,120 --> 00:16:50,920 Speaker 1: going to need hand sanitizer stations, and that's when we 295 00:16:50,920 --> 00:16:53,480 Speaker 1: started brainstorming and trying to come up with, you know, 296 00:16:53,560 --> 00:16:59,120 Speaker 1: fully customized hand sanitizer stations. It's been incredible to see 297 00:16:59,240 --> 00:17:03,160 Speaker 1: all the do for small businesses all over the country 298 00:17:03,240 --> 00:17:05,840 Speaker 1: that will go on the website by you know, an 299 00:17:05,880 --> 00:17:09,800 Speaker 1: automatic hand sanitizer dispenser package. They'll buy different types of 300 00:17:09,800 --> 00:17:12,680 Speaker 1: sanitizer that we offer, they'll lie different types of stands 301 00:17:13,080 --> 00:17:16,000 Speaker 1: and they'll all customize it with their logo and with 302 00:17:16,080 --> 00:17:19,680 Speaker 1: that pivot business for Alex more than double business ideas 303 00:17:19,720 --> 00:17:22,879 Speaker 1: tied directly to the pandemics seemed like an obvious shift, 304 00:17:23,480 --> 00:17:27,880 Speaker 1: but some other less conventional ventures also saw big boosts 305 00:17:28,000 --> 00:17:31,920 Speaker 1: during the outbreak. Paul Salek, for example, owns a flying 306 00:17:31,920 --> 00:17:35,440 Speaker 1: school in Las Vegas. Amazingly enough, we've been busier than 307 00:17:35,480 --> 00:17:39,359 Speaker 1: we've ever been. Um. I think people that can afford 308 00:17:39,640 --> 00:17:43,320 Speaker 1: private aircraft travel have now given themselves permission to get 309 00:17:43,359 --> 00:17:45,639 Speaker 1: the license that they always wanted to get so that 310 00:17:45,720 --> 00:17:49,240 Speaker 1: they can take their family and their associates on personal 311 00:17:49,280 --> 00:17:52,680 Speaker 1: travel around business travel as opposed to go into the airlines. 312 00:17:52,880 --> 00:17:56,720 Speaker 1: So we've we've actually seen quite the uptick in aircraft 313 00:17:56,800 --> 00:17:59,240 Speaker 1: sales and people learning how to fly. It sounds like 314 00:17:59,240 --> 00:18:02,119 Speaker 1: people want to avoid commercial travel altogether and just do 315 00:18:02,200 --> 00:18:05,440 Speaker 1: it themselves, and it's they think it's safe in that way. Yeah, 316 00:18:05,520 --> 00:18:07,240 Speaker 1: instead of going through T s A and jumping in 317 00:18:07,240 --> 00:18:09,800 Speaker 1: an airplane with the hundred fifty people you don't know, 318 00:18:10,200 --> 00:18:12,960 Speaker 1: you get in an airplane with just those loved ones 319 00:18:13,040 --> 00:18:16,280 Speaker 1: or those associates, and you can go, you know, pointing 320 00:18:16,280 --> 00:18:18,000 Speaker 1: at a point B direct to your meeting and be 321 00:18:18,080 --> 00:18:21,159 Speaker 1: home the same day. And it's always been available, but 322 00:18:21,240 --> 00:18:23,760 Speaker 1: the cost of doing so has always been higher than 323 00:18:23,800 --> 00:18:27,120 Speaker 1: the airline. But now people you know, for their own 324 00:18:27,200 --> 00:18:30,040 Speaker 1: personal safety and those of their loved ones, um, I 325 00:18:30,040 --> 00:18:33,400 Speaker 1: think they're giving themselves the okay to go ahead with it. Well, 326 00:18:33,480 --> 00:18:36,800 Speaker 1: some pivots maybe permitted. Others are business owners just doing 327 00:18:36,840 --> 00:18:39,520 Speaker 1: what they can to get through the crisis. Clayton B. 328 00:18:39,600 --> 00:18:43,440 Speaker 1: Sean runs Kntina Lobos and Pellham, New York. His restaurant, 329 00:18:43,560 --> 00:18:46,080 Speaker 1: like many others, had a pivot to a delivery model. 330 00:18:46,480 --> 00:18:49,440 Speaker 1: It kept his business of flaw, but it's not sustainable. 331 00:18:49,680 --> 00:18:53,480 Speaker 1: It's basically just to stop the bleeding of cash. The 332 00:18:53,520 --> 00:18:57,200 Speaker 1: perfect storm was that state taxes were do last Friday, 333 00:18:57,400 --> 00:18:59,359 Speaker 1: and we had to make the decision of you know, 334 00:18:59,800 --> 00:19:01,520 Speaker 1: do we hold on to that cash and take the 335 00:19:01,600 --> 00:19:04,760 Speaker 1: fines um later on so that we could stay open, 336 00:19:05,119 --> 00:19:07,200 Speaker 1: or do we give them all that cash and only 337 00:19:07,240 --> 00:19:10,520 Speaker 1: have a week's left instead of two weeks left of 338 00:19:10,560 --> 00:19:12,520 Speaker 1: what we did? And we decided to take the fine 339 00:19:12,560 --> 00:19:14,200 Speaker 1: and hold on to that to try to stay alive 340 00:19:14,240 --> 00:19:17,680 Speaker 1: and pay that sales tax later. Luckily the states come 341 00:19:17,680 --> 00:19:20,080 Speaker 1: down and as of now you're not gonna get fined 342 00:19:20,200 --> 00:19:23,440 Speaker 1: for not paying sales tax. I bought us basically another 343 00:19:23,480 --> 00:19:26,240 Speaker 1: week we can have. The hurdles are high for firms 344 00:19:26,240 --> 00:19:29,840 Speaker 1: that old background back taxes at loans from the government 345 00:19:29,880 --> 00:19:33,320 Speaker 1: that we're meant to keep them afloat. Government moratoriums on 346 00:19:33,400 --> 00:19:37,760 Speaker 1: evictions and foreclosures are expiring in many states. The list 347 00:19:37,800 --> 00:19:41,159 Speaker 1: of worries is long, and many storefronts now face fresh 348 00:19:41,240 --> 00:19:45,760 Speaker 1: lockdowns until vaccines are widely distributed. John Pepper in Boston 349 00:19:45,920 --> 00:19:49,520 Speaker 1: made the best of a bad situation, using his modern 350 00:19:49,600 --> 00:19:53,879 Speaker 1: Mexican restaurants to feed frontline workers. He took hundreds of 351 00:19:53,920 --> 00:19:56,560 Speaker 1: thousands of dollars and p p P loans, but the 352 00:19:56,640 --> 00:20:00,440 Speaker 1: road ahead for his business is still uncertain. You kept 353 00:20:00,480 --> 00:20:03,240 Speaker 1: people employed, we help them figure out how to apply 354 00:20:03,320 --> 00:20:05,760 Speaker 1: for unemployment, and we ensured as soon as we knew 355 00:20:05,760 --> 00:20:08,399 Speaker 1: we had the p PP nobody will be left behind. 356 00:20:08,800 --> 00:20:11,120 Speaker 1: You are grateful that you did get a loan through 357 00:20:11,160 --> 00:20:15,080 Speaker 1: the Small Business Administration, but it comes with some stipulations 358 00:20:15,119 --> 00:20:18,760 Speaker 1: that really make you think about the future of the business. Yeah, 359 00:20:18,800 --> 00:20:22,400 Speaker 1: that's for sure. How much of this sixty in our case, 360 00:20:22,440 --> 00:20:24,560 Speaker 1: which is a lot of money that just sounds like 361 00:20:24,600 --> 00:20:27,080 Speaker 1: a windfall at first at a glance, But how much 362 00:20:27,080 --> 00:20:29,440 Speaker 1: of that will turn into a loan? And will we 363 00:20:30,000 --> 00:20:33,440 Speaker 1: be able to generate the cash flow necessary to pay 364 00:20:33,440 --> 00:20:36,040 Speaker 1: it back in a short eighteen month period once we 365 00:20:36,080 --> 00:20:39,040 Speaker 1: have to start paying it And that by definition, if 366 00:20:39,040 --> 00:20:41,520 Speaker 1: you do the math is going to be almost impossible 367 00:20:41,560 --> 00:20:45,560 Speaker 1: for most restaurant companies if they don't go for full forgiveness, 368 00:20:46,200 --> 00:20:48,320 Speaker 1: the amount left over as a loan will be a 369 00:20:48,480 --> 00:20:52,200 Speaker 1: very challenging number to meet from a cash flow standpoint 370 00:20:52,280 --> 00:20:55,360 Speaker 1: over the following a team months. The long term damage 371 00:20:55,400 --> 00:20:59,520 Speaker 1: to small business has led to frustration aimed at Capitol Hill, 372 00:21:00,080 --> 00:21:04,000 Speaker 1: as lawmakers took many months to negotiate additional aid. More 373 00:21:04,080 --> 00:21:08,879 Speaker 1: than nineteen million Americans filed for unemployment. Meantime, the stock 374 00:21:08,920 --> 00:21:12,479 Speaker 1: market rallied to records and the largest banks posted record 375 00:21:12,600 --> 00:21:16,800 Speaker 1: results at some key businesses. Frank Knapp, a small business 376 00:21:16,800 --> 00:21:21,320 Speaker 1: owner in South Carolina, is frustrated with the response from Washington. 377 00:21:21,640 --> 00:21:25,000 Speaker 1: They all know, they all know that small businesses needed 378 00:21:25,080 --> 00:21:28,119 Speaker 1: to be helped so that they can survive, because like 379 00:21:28,200 --> 00:21:31,760 Speaker 1: after the Great Recession, it was small businesses who created 380 00:21:31,880 --> 00:21:34,880 Speaker 1: the majority of jobs to get the economy back on track, 381 00:21:35,000 --> 00:21:38,000 Speaker 1: not big business. But yet all we're concerned about is 382 00:21:38,160 --> 00:21:41,679 Speaker 1: Wall Street. Uh, we all be concerned about Main Street, 383 00:21:42,280 --> 00:21:46,720 Speaker 1: and ironically enough, Wall Street agrees Scott and minor manages 384 00:21:46,760 --> 00:21:50,440 Speaker 1: more than two hundred billion dollars for Guggenheim investments. What 385 00:21:50,560 --> 00:21:54,000 Speaker 1: the policymakers are doing here is leaving themselves open to 386 00:21:55,160 --> 00:21:57,639 Speaker 1: another round of criticism, just like they got at the 387 00:21:57,720 --> 00:22:01,320 Speaker 1: end of the financial crisis, which is the government programs 388 00:22:01,359 --> 00:22:03,720 Speaker 1: were designed to bail out the big boys, but they 389 00:22:03,800 --> 00:22:08,720 Speaker 1: left Main Street behind. We have permanently done damage to 390 00:22:09,000 --> 00:22:13,439 Speaker 1: the job market which some other industry or future growth 391 00:22:13,520 --> 00:22:15,359 Speaker 1: is going to have to correct for, and that's going 392 00:22:15,400 --> 00:22:18,520 Speaker 1: to take a long time. Key figures in Washington also 393 00:22:18,560 --> 00:22:22,240 Speaker 1: agree with Federal Reserve Chairman j Pale acknowledging the issue, 394 00:22:22,640 --> 00:22:25,560 Speaker 1: and he sees more trouble ahead. They're just a lot 395 00:22:25,560 --> 00:22:29,000 Speaker 1: of smaller businesses in their communities that will struggle to 396 00:22:29,040 --> 00:22:32,119 Speaker 1: make it through this winter. COVID is moving up um 397 00:22:32,240 --> 00:22:34,840 Speaker 1: and the cold weather people are staying in and it's 398 00:22:34,880 --> 00:22:39,280 Speaker 1: gonna be tough. There are also frustrations aimed at large corporations, 399 00:22:39,720 --> 00:22:43,560 Speaker 1: especially tech companies like Amazon and Google, which have benefited 400 00:22:43,560 --> 00:22:47,240 Speaker 1: from the shift to online commerce. A report from Visa 401 00:22:47,400 --> 00:22:50,880 Speaker 1: found that more than seventy percent of shoppers use most 402 00:22:50,880 --> 00:22:54,320 Speaker 1: of their cash at places like Amazon and Walmart, whose 403 00:22:54,320 --> 00:22:59,000 Speaker 1: founders are billionaires and who stocks have surged this year. Meantime, 404 00:22:59,080 --> 00:23:03,639 Speaker 1: many small bisnesses don't have the infrastructure to effectively sell online. 405 00:23:04,160 --> 00:23:09,160 Speaker 1: Jeremy Staffelman, the CEO of Yelp, is seeing this frustration firsthand. 406 00:23:09,280 --> 00:23:12,880 Speaker 1: He also sees a wide divide and access to cheap debt. 407 00:23:13,119 --> 00:23:16,639 Speaker 1: Businesses need supports, especially small businesses need support. And I 408 00:23:16,680 --> 00:23:20,280 Speaker 1: think the initial stimulus package was a positive, and you know, 409 00:23:20,320 --> 00:23:23,479 Speaker 1: we've been all waiting and hoping for another one. And 410 00:23:23,520 --> 00:23:25,919 Speaker 1: I think, you know, we shouldn't just have socialism for 411 00:23:25,960 --> 00:23:29,000 Speaker 1: big companies where they can borrow endlessly with cheap debt 412 00:23:29,000 --> 00:23:31,959 Speaker 1: from the powered by the Fed. We we should extend 413 00:23:31,960 --> 00:23:34,440 Speaker 1: a helping hand to all these great small business owners 414 00:23:34,480 --> 00:23:37,159 Speaker 1: that are just trying to get by. Survey data from 415 00:23:37,160 --> 00:23:40,480 Speaker 1: the Federal Reserve shows that lending standards to small and 416 00:23:40,560 --> 00:23:45,199 Speaker 1: medium sized businesses are challenged. Bloomberg Sally Bakewell spoke with 417 00:23:45,280 --> 00:23:48,800 Speaker 1: bankers across the industry to find out why it all 418 00:23:48,840 --> 00:23:53,160 Speaker 1: comes down to one simple reason. Risk no one wants 419 00:23:53,200 --> 00:23:56,720 Speaker 1: to lend to a business, but really you have no 420 00:23:57,600 --> 00:24:01,159 Speaker 1: guarantee that it will exist in twelve months, So that 421 00:24:01,320 --> 00:24:04,440 Speaker 1: concern was taking all of this risk, and I think 422 00:24:04,480 --> 00:24:07,480 Speaker 1: that is why we saw at the beginning of programs 423 00:24:07,520 --> 00:24:10,159 Speaker 1: like the Paycheck Protection Program that a lot of it 424 00:24:10,240 --> 00:24:15,720 Speaker 1: went to the bigger, more sturdy, more well established clients, 425 00:24:16,400 --> 00:24:19,280 Speaker 1: which meant that of course, again the smaller ones were 426 00:24:19,280 --> 00:24:24,840 Speaker 1: shut out. Troubles for small business owners have ripple effects 427 00:24:24,920 --> 00:24:28,320 Speaker 1: that hit all parts of the economy. If small firms 428 00:24:28,359 --> 00:24:32,639 Speaker 1: don't survive, economists say workers could stay at employed longer, 429 00:24:32,960 --> 00:24:36,040 Speaker 1: and right now small business is struggling to keep staff 430 00:24:36,080 --> 00:24:39,719 Speaker 1: on board. On November, survey from Goldman Sachs found at 431 00:24:39,840 --> 00:24:42,800 Speaker 1: least two and five were laying off staff or cutting 432 00:24:42,840 --> 00:24:46,920 Speaker 1: employee pay. Romano Martin used her life savings to build 433 00:24:46,960 --> 00:24:50,080 Speaker 1: and renovate a thirty four lane bowling alley in Brooklyn. 434 00:24:50,480 --> 00:24:54,160 Speaker 1: She's open now, but operating at limited capacity to keep 435 00:24:54,200 --> 00:24:58,080 Speaker 1: customers safe. And it's because we just don't know how 436 00:24:58,119 --> 00:25:01,040 Speaker 1: long we might be able to stay a out. We 437 00:25:01,119 --> 00:25:03,919 Speaker 1: have a lot of obligations and a lot of catching 438 00:25:04,000 --> 00:25:07,240 Speaker 1: up to do. Have you applied for or received any 439 00:25:07,440 --> 00:25:09,919 Speaker 1: government aid and what's that process. We have the p 440 00:25:10,080 --> 00:25:14,440 Speaker 1: p P which allows us to hire our employees back, 441 00:25:14,800 --> 00:25:18,080 Speaker 1: but of course with the type of rent that we're paying, um, 442 00:25:18,119 --> 00:25:20,399 Speaker 1: it does not cover at all. I mean, we we 443 00:25:20,440 --> 00:25:23,480 Speaker 1: have our life savings in this place, and we've improved 444 00:25:23,520 --> 00:25:26,280 Speaker 1: it so much, and you know, with the video wall 445 00:25:26,320 --> 00:25:29,240 Speaker 1: and the lighting, and it's just sad to see if 446 00:25:29,320 --> 00:25:32,159 Speaker 1: we possibly have to give it up and close our 447 00:25:32,200 --> 00:25:38,400 Speaker 1: doors for good. That Goldman sat survey we mentioned earlier 448 00:25:38,600 --> 00:25:42,520 Speaker 1: also found more than half small business owners have stopped 449 00:25:42,680 --> 00:25:46,399 Speaker 1: paying themselves and more than a third are dipping into 450 00:25:46,440 --> 00:25:49,320 Speaker 1: personal savings to stay afloat. That was the case for 451 00:25:49,359 --> 00:25:52,080 Speaker 1: Amy Wilson when we spoke to her. She owns an 452 00:25:52,080 --> 00:25:55,960 Speaker 1: event space in Atlanta, Georgia. Revenue was plunging this summer 453 00:25:56,119 --> 00:25:59,760 Speaker 1: during what normally would be her busiest months. We pay 454 00:26:00,000 --> 00:26:03,600 Speaker 1: an average of ten thousand dollars of months for our 455 00:26:04,000 --> 00:26:09,480 Speaker 1: expensive is including insurance and rent and water and internet. 456 00:26:09,840 --> 00:26:12,520 Speaker 1: So we pay almost ten thousand dollars a month no 457 00:26:12,560 --> 00:26:16,200 Speaker 1: matter what, and our biggest months or this summer because 458 00:26:16,240 --> 00:26:19,239 Speaker 1: we have summer camps. And the lovely thing about us 459 00:26:19,400 --> 00:26:22,959 Speaker 1: is we hire school teachers and art teachers, so it 460 00:26:23,040 --> 00:26:27,560 Speaker 1: gives teachers and educators a great side huspital to work. 461 00:26:27,600 --> 00:26:30,960 Speaker 1: A couple of weeks and everybody's going to be out 462 00:26:30,960 --> 00:26:33,720 Speaker 1: of work, and I'm just going to be deeper in debt. Sadly, 463 00:26:36,040 --> 00:26:39,720 Speaker 1: rent forgiveness for business owners has become an untenable issue 464 00:26:40,240 --> 00:26:44,480 Speaker 1: as they're locked into leases while suffering significant sales declines. 465 00:26:44,840 --> 00:26:48,000 Speaker 1: Frank Fellucci of Sweet Catch Cooke in New York saw 466 00:26:48,119 --> 00:26:52,680 Speaker 1: sales plunge about you know, we were able to get 467 00:26:52,760 --> 00:26:56,600 Speaker 1: some of the PPP money that has run out, and 468 00:26:56,640 --> 00:26:59,960 Speaker 1: then I took out some of the small business emergency loans. 469 00:27:00,119 --> 00:27:02,120 Speaker 1: You know, eventually that's going to run out as well. 470 00:27:02,880 --> 00:27:06,480 Speaker 1: Until things get back to normal, whatever that new normal 471 00:27:06,560 --> 00:27:09,080 Speaker 1: is going to be. Businesses are going to be hard 472 00:27:09,119 --> 00:27:12,720 Speaker 1: pressed to continue and it's a it's a struggle. I mean, 473 00:27:13,440 --> 00:27:17,000 Speaker 1: I'm gonna have to negotiated with four of my five landlords, 474 00:27:17,000 --> 00:27:19,360 Speaker 1: which looks a good deal at the time, but now 475 00:27:19,400 --> 00:27:22,720 Speaker 1: they're probably they're not workable. Is there a firm date 476 00:27:22,840 --> 00:27:26,679 Speaker 1: by which you have to make some tough decisions? You know, 477 00:27:26,720 --> 00:27:30,480 Speaker 1: I think landlords are willing to work with me. I 478 00:27:30,520 --> 00:27:33,159 Speaker 1: can last longer, but if they're going to insist on 479 00:27:33,240 --> 00:27:37,200 Speaker 1: a set round based on previous you know, pre COVID numbers, 480 00:27:37,280 --> 00:27:41,520 Speaker 1: then I'm out of business. As businesses suffer, so do 481 00:27:41,600 --> 00:27:45,320 Speaker 1: the local economies of the cities and towns where they operate. 482 00:27:45,960 --> 00:27:49,479 Speaker 1: Brad Close, as president of the National Federation of Independent Business, 483 00:27:49,880 --> 00:27:51,920 Speaker 1: When you look at the small business economy in America, 484 00:27:52,000 --> 00:27:54,560 Speaker 1: it's the third largest economy taken by itself, in the 485 00:27:54,600 --> 00:27:57,479 Speaker 1: whole world. We've created half the GDP for the country, 486 00:27:57,480 --> 00:28:00,520 Speaker 1: in almost half the new private sector job. That's a 487 00:28:00,600 --> 00:28:03,760 Speaker 1: very large swath of the total US economy and has 488 00:28:03,800 --> 00:28:08,119 Speaker 1: the ability to impact large and small firms in every industry. 489 00:28:08,359 --> 00:28:10,960 Speaker 1: Margaret and that Do runs the Urban Investment Group in 490 00:28:11,040 --> 00:28:15,240 Speaker 1: Goldman Sachs. A full forty of small businesses do not 491 00:28:15,359 --> 00:28:17,960 Speaker 1: think they're going to survive, and that is that's the 492 00:28:18,040 --> 00:28:21,879 Speaker 1: highest number we've seen since April. So businesses have you know, 493 00:28:22,040 --> 00:28:25,040 Speaker 1: they've expressed all of the creativity that they can, they've 494 00:28:25,040 --> 00:28:28,639 Speaker 1: moved online, they've tried different strategies about revenue, but at 495 00:28:28,640 --> 00:28:32,400 Speaker 1: the end of the day, without additional support, many won't survive. 496 00:28:33,600 --> 00:28:38,480 Speaker 1: And these small businesses are interconnected. Take James Low, he 497 00:28:38,560 --> 00:28:42,320 Speaker 1: runs the Baltimore School of Music with fifteen employees. Group 498 00:28:42,400 --> 00:28:46,000 Speaker 1: classes were canceled because of COVID nineteen and people were 499 00:28:46,080 --> 00:28:49,920 Speaker 1: less interested in virtual lessons. His firm was classified as 500 00:28:49,920 --> 00:28:53,200 Speaker 1: an essential service because schools in the area didn't provide 501 00:28:53,320 --> 00:28:57,520 Speaker 1: music lessons, yet his service was expendable when the pandemic 502 00:28:57,600 --> 00:29:00,080 Speaker 1: hit in Baltimore. Can be kind of tricky because a 503 00:29:00,080 --> 00:29:02,480 Speaker 1: lot of our public schools do not have music programs, 504 00:29:02,880 --> 00:29:05,959 Speaker 1: so we do provide some essential services. We've also had 505 00:29:06,000 --> 00:29:08,200 Speaker 1: a lot of our students who have been faking their 506 00:29:08,200 --> 00:29:11,320 Speaker 1: own economic challenges that have had to pull back on 507 00:29:11,600 --> 00:29:14,760 Speaker 1: any extra spending in their life. So we've had people 508 00:29:14,800 --> 00:29:17,280 Speaker 1: that have been furloughed or have lost their jobs that 509 00:29:17,320 --> 00:29:19,600 Speaker 1: have had to cancel their music lessons because of that 510 00:29:19,680 --> 00:29:22,080 Speaker 1: as well. And we did apply for p p P 511 00:29:22,720 --> 00:29:24,880 Speaker 1: and we were able to get that, so we've got 512 00:29:24,960 --> 00:29:27,360 Speaker 1: a bit of a cushion. The problem for us is 513 00:29:27,440 --> 00:29:28,760 Speaker 1: we don't know how long this is going to go 514 00:29:28,840 --> 00:29:32,160 Speaker 1: for There are white concerns that the pain amongst small 515 00:29:32,200 --> 00:29:35,800 Speaker 1: businesses could create permanent damage to the economy even once 516 00:29:35,880 --> 00:29:39,800 Speaker 1: the pandemic passes. Brad Close at the n f I basis. 517 00:29:39,960 --> 00:29:44,640 Speaker 1: It could also scar communities that see downtown neighborhoods forever changed. 518 00:29:44,920 --> 00:29:46,960 Speaker 1: It is something that's very important. It's in all of 519 00:29:47,000 --> 00:29:49,840 Speaker 1: our communities. When you look at the businesses out there 520 00:29:49,840 --> 00:29:52,760 Speaker 1: that are supporting local communities, sponsoring the Little League, the 521 00:29:52,800 --> 00:29:55,640 Speaker 1: high school marching band, doing the charity drives, it's all 522 00:29:55,680 --> 00:29:58,040 Speaker 1: local small businesses and that who is that's who is 523 00:29:58,200 --> 00:30:01,120 Speaker 1: bearing the kind of the brunt of this. These economic 524 00:30:01,160 --> 00:30:03,760 Speaker 1: shutdowns in the COVID pandemic right now at the business level, 525 00:30:03,800 --> 00:30:06,800 Speaker 1: so they definitely need help. We want to see more open, 526 00:30:06,800 --> 00:30:08,560 Speaker 1: but we want to see them stay open first and 527 00:30:08,600 --> 00:30:15,600 Speaker 1: foremost small businesses need more money to survive, and until 528 00:30:15,760 --> 00:30:20,040 Speaker 1: vaccines are distributed widely, we risk losing more of the 529 00:30:20,080 --> 00:30:23,880 Speaker 1: mom and pop firms that form the backbone of the economy. 530 00:30:24,440 --> 00:30:29,320 Speaker 1: But until then, business owners are staying resilient, pivoting, adapting 531 00:30:29,720 --> 00:30:34,200 Speaker 1: and reimagining using every level they have to stay aflow. 532 00:30:37,160 --> 00:30:40,400 Speaker 1: This is a Bloomberg Radio special report looking at the 533 00:30:40,400 --> 00:30:44,800 Speaker 1: pandemics outsized impact on small business. If you joined us late, 534 00:30:45,120 --> 00:30:48,400 Speaker 1: catch the full show online as a podcast available on 535 00:30:48,440 --> 00:30:53,560 Speaker 1: the Bloomberg Surveillance and Bloomberg Business Week feeds, on Spotify, Stitcher, Apple, 536 00:30:54,000 --> 00:30:58,200 Speaker 1: or wherever else you get your podcasts. I'm Bask, I'm 537 00:30:58,280 --> 00:31:00,600 Speaker 1: John Tucker, and this is Beienberg.