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Just hours after the U.S. Small Business Administration began allowing North Carolina’s small-business owners to apply for emergency loans, Chuck Watson hit a brick wall.
Chuck and his wife, Janna, owners of The French Broad Kitchen & Wine Bar in downtown Hendersonville, were anxious to start the process of applying for an SBA loan to cover the mounting expenses they anticipate as they attempt to keep their 1-year-old establishment afloat.
“We have been trying to apply, but our state just appeared on their system today,” Chuck Watson told Carolina Public Press on Thursday.
“We prefer online, but there are glitches, and we spent several hours on the phone on hold, just to be disconnected,” he said.
On Friday, Watson’s endurance was tested again.
“Chuck has now been on hold for 4 1/2 hours, all because the online site says they can’t verify his identity,” Janna said.
She said their business will need money – soon – to help cover rent, utilities, labor and lost revenues.
The couple’s kitchen and wine bar fell under North Carolina’s emergency closing order of March 17. For the moment, the only business they can conduct is a takeout service.
“If we are able to stay afloat with a combination of loans and takeout business and if the duration of being shut down is on the shorter side of predictions, we believe it will be feasible,” Janna Watson explained.
But if the coronavirus crisis drags on, owing the SBA “would not be worthwhile,” she added.
The Watsons operate one of more than 800,000 small businesses across North Carolina that are clamoring for whatever financial assistance they can get – an SBA loan, bank loan, even the kindness of neighbors.
According to the SBA’s website, a business or private nonprofit organization may borrow up to $2 million under an Economic Injury Disaster Loan to help defray expenses as the coronavirus emergency plays out.
“These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact,” the agency states.
The interest rate on a disaster loan is 3.75% for small businesses and 2.75% for nonprofits. The maximum period for repayment is 30 years.
The SBA’s loan approval process involves three steps.
Decisions on applications should take two-three weeks, the agency says.
There were 890,000 small businesses in the state employing 1.6 million people in 2018, according to the SBA.
Businesses around the state
At Raleigh-based LM Restaurants, a food and spirits enterprise whose brands include Carolina Ale House, Hops Supply Co. and Oceanic, senior director of brands Katherine Goldfaden said the directive to shut down almost immediately hit LM and its more than 2,000 employees hard.
“This is unprecedented, and no amount of crisis planning that our company has done can compare,” she said.
Many of LM’s properties are located along the coast.
With hurricanes, “we have a forecast, we know when it’s going to hit, we know what our response is,” Goldfaden said. “Now, it’s a very different scenario for us, and the hardest part, I think, is not knowing how long.”
LM has established a website and employee Facebook groups so management can disseminate information on unemployment benefits and health care services.
In Charlotte, James Bazzelle, co-owner of Mert’s Heart and Soul, said he intends to fight hard so he can reopen his mom-and-pop business when the emergency is over.
Early last week he was hoping to sell the last batch of food that Mert’s cooked before shutting down and sending his 35 employees home.
“It may be painful, but we’ll get through it,” he said.
In some communities, that pain is felt more deeply.
On Thursday, Buncombe County mandated the closure of certain businesses, including gyms, movie theaters, and hair and nail salons, while limiting public gatherings to 10 people.
The declaration does not affect grocery stores, pharmacies, gas stations and several other public necessities.
Other communities around the state have taken or are considering similar steps, including curfews.
Caroline Gunther, owner of the pet boutique Wag! in Hendersonville, is using her forced downtime to plan for the future.
“I would love to do projects in my shop like painting, replacing floors and fixing or upgrading things in my building to be even better prepared for business after this emergency has subsided,” Gunther said.
“We have a number of salons, galleries and other retailers that are, for the time being, remaining open,” said Lew Holloway, Hendersonville’s downtown economic development director.
“My sense is that we are collectively looking for ways to move us all forward together.”
Editor’s note: This article, which features several Henderson County business owners, was developed in conjunction with The Hendersonville Lightning as part of Carolina Public Press’ Emergency News Team initiative.
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