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Small Business Owners Worried About Economic Uncertainty

REGION – Small businesses are starting to feel the long-term anxieties of the COVID-19 pandemic.

Many are worried about the impacts of postponements, loan repayments and the lack of purchasing power of consumers to continue with their life’s work.

For Megan McIntyre, Brian Seghers and Gordy Haskett, long-term calculations don’t work because 90-day postponements by state and other municipalities and potential loans can crush small businesses once those non-essential stores are allowed to reopen. , but no one knows when that will happen.

McIntyre and Seghers have each had to shut down temporarily, while Haskett makes weekly bake sales for his bakery. All three rent their stores.

“It’s a little tough… I don’t suppose I open my doors and 100% of the business comes back,” McIntyre said. “I can predict it will be six months to try to catch up. “

Several weeks ago, McIntyre closed its four Carlsbad retail clothing stores in the village (Blue and shoes, Ragz Revolution, California’s coolest shoes and to bloom), and Under the willow in Temecula. She said it was unrealistic to rack up debt and expect customers to return as they did before the pandemic.

McIntyre asked the federal Payroll Protection Plan, although Haskett, owner of Gordy’s Bakery in Encinitas, said he couldn’t because he couldn’t meet the 75% payroll requirement for his employees on leave.

McInytre said 25% of PPP can be used for rent, but in California rents are much higher than elsewhere in the country. She also opened other lines of credit, but recognized that it will be difficult to get out of debt.

“It’s not even a month,” she said. “The 25% can cover two (stores) for a month and I’ll have to find the rest. It’s gonna be really hard. Just because they can’t kick me out today doesn’t mean they can’t kick me out after 90 days. Everyone is nervous.

Seghers, who owns 454 Tattoo and Body Piercing in Encinitas and another tattoo shop in Redlands, said he had been in contact with Encinitas City Councilor Kelly Hinze about potential relief from the town .

And although the city has yet to announce any plans, Seghers said he could avoid any postponements or loans for about six months as he cashes in cash after learning from the Great Recession of 2008.

Yet his concerns focus on the long-term impacts, especially for consumers with less purchasing power after the pandemic. About 2.3 million California residents applied for unemployment benefits from March 12 to April 7, according to the Orange County Register.

Seghers, McIntyre and Haskett said there was no guarantee how many of these jobs will come back.

“They can’t take the risk of spending more money,” Seghers said. “Those whose rent is deferred… again take out loans. They will have to pay off their rent, the loans with interest, and then pay their current rent in addition to having to pay for goods and services.

He said small businesses could reopen with two or three times the overhead, putting them in dire financial straits. Seghers said it could come down to the tenant-landlord relationship and a mutually beneficial rental arrangement.

Hasket has applied for the Small Business Administration’s Disaster Relief Fund, but he tries not to defer any payments while being charged 100% for April rent.

“You are just going into debt,” Haskett said. “If I start digging this hole, it will get deeper and deeper. You don’t make a lot of money with a small business.

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Tags : long term
Margarita W. Wilson

The author Margarita W. Wilson