Small businesses come up short
There are over 221,000 PPP stories in Illinois. Some small businesses got millions. One got $73.
There are more than 221,000 PPP stories in Illinois. Some small businesses got millions. One got $73.
The Paycheck Protection Program was designed to be a bridge from pandemic panic to business as usual for the stores and offices lining America’s Main Streets. • Despite the Small Business Administration approving 5.2 million loansworth $525 billion toweather the economic disruption wrought by COVID-19, many businesses have come up short. • The PPP offered businesses and nonprofits with fewer than 500 employees forgivable loans of upto $10 million, if at least60% of themoneywent towardpayroll. Larger companies received the lion’s share of the money, while millions of smaller beneficiaries got far less — all the way down to $1, according to data released Tuesday by the SBA. • In Illinois, the SBAapproved more than 221,000 loans totaling nearly $23 billion for the state’s businesses and nonprofits. Here are some of their stories.
‘What can I do with $73?’
Near the bottom of the PPP list for Illinois is Queen Forever Hair Salon in south suburban Tinley Park. The small Black-owned beauty shopwas hoping to get a $24,000 forgivable loan to support five employees through months of closure and disruption.
Instead, the salon was approved for $73.
“They said that’s all I was qualified for,” said owner Lillian Carter Hendrix. “I said how is that so — what can I do with $73?”
Hendrix, who has operated her shop for 11 years in a suite of independent salons, has struggled during the pandemic, as regular clients dropped off while the rent did not stop.
She applied for a PPP loan online through Lendistry, a minority-owned, California-based company that specializes in small business loans. The lender initially indicated she would receive
$24,000, Hendrix said. When the approval came through in June, itwas $73.
Hendrix called Lendistry, escalating her concerns to amanager who told her the loan amount was correct. The company did not return a request for comment Thursday.
Navigating the application on her own was daunting, Hendrix said. She had more success securing a $1,000 grant through Sunshine Enterprises, a Chicago-based nonprofit that helps Black business owners in underserved neighborhoods across the city and the suburbs.
“It wasn’t a whole lot, but it was enough to help me with my rent,” Hendrix said. “Itwas more than $73.”
‘The American Dream has been ripped fromus’
HopsmithTavern is pulling out all the holiday stops, including a 30-foot-tall Christmas tree out front and a “flying
Santa” hung on wires to soar above Division and State streets.
Those first-ever touches have brought smiles and laughs, both in short supply in a devastating year for restaurants and theirworkers, owner Erik Baylis said.
“If that was my last $5,000, I’d still spend it,” Baylis said. “This is the first time that Christmas has needed to be saved. We need something positive right now.”
Baylis’ five other Big Onion Hospitality bars and restaurants throughout Chicago, including The Irish Oak near Wrigley Field and two Fatpour Tap Works locations, are closed with noclear reopening date because of COVID-19 restrictions.
He permanently closed Brunch, a River North restaurant, and hopes to avoid that fate for the others.
The $148,100 PPP loan Big Onion received helped preserve 10 jobs for severalweeks, Baylis said.
“It was a small Band-Aid that we’re very grateful for,” Baylis said. “It was impressive how quickly they got it out, without a system in place for it. But that moneywas gone fast.”
Big Onion has laid off more than 500 employees. Just 39 remain to run Hopsmith as an outdoor-only operation, Baylis said.
The company’s revenue is down 85%
from a virus-free 2019, and Hopsmith has invested about $50,000 for outdoor furniture and heat lamps, among other things, to serve customers on a stretch of Division Street closed to traffic.
“The issue nowis, no one is coming out,” Baylis said. “We’ve all put money into outdoor dining, money to follow the city and state guidelines. We keep spending money, but they then they’re telling our customers, ‘Don’t go out.’ “
Baylis, a former bartender who has no investors, said he’s burned through most of the company’s savings. Despite cutting costs, fixed expenses such as leases, mortgages, utilities, insurance and taxes remain.
“Yougoto sleep at2a.m. andyouwakeup at 5 a.m. to pursue the American Dream, and nowyou have to lay off 500 employees,” Baylis said. “The American Dreamhas been ripped fromus.”
‘We are hanging on by the skin of our teeth’
NeonShopFishtail, whichmakes custom neon signs for bars and restaurants as well as for television and movie productions in the city, has seen a 70% drop in business compared with last year, owner Thomas Brickler said.
The firm obtained a PPP loan of $23,866, but has burned through those funds to keep two full-time employees and to pay expenses like rent and equipment for sign repairs.
Brickler typically has orders lined up months in advance, but with restaurants and bars ordered closed to indoor service for a second time this year, clients aren’t calling the 35-year-old shop in Chicago’s Bucktown neighborhood.
“We are hanging on by the skin of our teeth,” he said.
Brickler said he has lost hope Congress will provide additional coronavirus relief to small businesses before the end of the year.
“I really don’t have hope. I mean, some form of relief would be good, but everyone (in Congress) is in it for their own agenda,” he said.
‘My biggest concern is what happens next year’
Christen Carter, owner of Busy Beaver Button, is focused on 2021, and she’s worried.
Her shop, in Chicago’s Logan Square neighborhood, makes buttons, stickers and magnets, and received a PPP loan of $146,756 to help keep its 20 full- and part-time employeesworking.
Election season provided a muchneeded boost in sales, but Carter said she expects to lose money in the first quarter.
Busy Beaver Button typically sells large quantities of buttons to event organizers,
but the pandemic shut down the convention business and there’s no telling when large events might resume. Illinois won’t reach its final phase of reopening until a vaccine or treatment for COVID-19 is widely available.
”My biggest concern is what happens next year, becausewe are still in the middle of all of this,” Carter said.
‘A lot of Black folks didn’t knowabout it’
The Silver Room, a 23-year-old Hyde Park boutique, landed a $19,000PPPloan in April that helped keep seven employees on staff and bridged the gap until the store could reopen in June.
Owner Eric Williams learned about the program from a customer who worked at SeawayBank, a South Side financial institution that focuses on underserved communities.
“She actually reached out to me directly and said you should jump on this, because a lot of Black folks didn’t knowabout it, didn’t know about the application process,” said Williams, who founded the Silver Room in 1997. “She was super helpful walking me through the process.”
Williams used the downtime as an opportunity to remodel the 1,800-squarefoot space and beef up its online presence. Since reopening the store, which offers an eclectic array of accessories and serves as a de facto cultural center, sales are up 15% to 20% year-over-year, he said.
Williams said the store remodeling offered a “glimmer of hope” in the neighborhood as civil unrest and COVID-19 restrictions disrupted the city and more people stayed home and shopped locally.
“When we opened people were very conscious that they had to support not just any small business, but specifically a Black-owned small business,” Williams
said. “They come in and want to make sure we stay in business. So they’ve been shopping with intention.”
‘There could be a really huge tax bill’
Omni Ecosystems, an 11-year- old Bronzeville company, creates sustainable green landscaping for commercial developments, including the 20,000-square-foot green roof at theMcDonald’s headquarters in FultonMarket.
Omni received a $338,675 PPP loan in April to support its 26 employees. The company, located in a remodeled dairy, has used the funds to weather a challenging year, completing ongoing construction projects while the design team was mostly idled by a dearth of new development.
“The PPP delivered essential resources to us at a time of crisis, when we really needed it,” said Molly Meyer, CEO and founder.
Meyer said the PPP process has had hurdles, from application delays with Fifth Third Bank to navigating the forgiveness process, which she has yet to tackle. But the funds lasted just long enough for new projects to begin filtering in, she said.
The workload has flip-flopped, with design for new projects picking up as construction wanes, a reflection of some optimism among developers that 2021 may be better than 2020.
Meyer said the biggest issue facing her company may be next year’s tax bill. The IRS said last month businesses cannot deduct expenses paid for with PPP funds.
“There could be a really huge tax bill next year associated with this,” Meyer said. “It’s really critical that Congress step in and resolve this liability or next spring, there’s going to be a massive financial problem for small businesseswhoreceivedPPPmoney.”
‘Wewere lucky to have gotten it’
Since 2004, the Chicago Jazz Philharmonic — an acclaimed 55-piece jazz orchestra — has spread its music and goodwill from Millennium Park toHavana, Cuba. The nonprofit organization, cofounded by trumpeter/composer Orbert Davis and music producer Mark Ingram, also is a teaching institute that works with Chicago Public Schools and hosts an annual Jazz Academy summer camp.
This year there were no live performances, and the summer camp and music lessonsmoved online.
Lauren Deutsch, who was named interimexecutive director inJune, said a$56,805 PPP loan helped keep the organization’s five-person staff intact, and its musical mission on track.
“I think we were lucky to have gotten it sooner rather than later,” Deutsch said. “It has made a moderately big difference for us.”
Assembled to make a splash at the 2004 Chicago Jazz Festival, the Philharmonic rose to international prominenceinDecember 2014, when Davis and Ingram were coaching music students in Havana on the day the U.S. announced it would normalize diplomatic relations with Cuba.
With the Jazz Philharmonic unable to perform, education has become job one during the pandemic. Going virtual has expanded the mission, withCubanstudents participating in the two-week summer camp this year.
Deutsch said the organization’s budget was reduced from $800,000 to $550,000 this year. The PPP loan covered about 10% of its expenses.
“We have been able to survive over this last period of time because of the support of Chicago’s philanthropic community,” Deutsch said.