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Many small business owners worry a second shutdown would be devastating

CNN's Alexandra Field reports from Houston as coronavirus cases in Texas continue to reach a new high each day.

Posted: Jun 29, 2020 3:43 PM
Updated: Jun 30, 2020 5:16 PM


The economic shutdowns and confusing scramble for federal loans and other aid were hard enough for small business owners.

But now they face even more hurdles in their bid to survive. The Paycheck Protection Program -- a major lifeline for many -- will stop issuing new loans after Tuesday. And the closure comes just as coronavirus cases are spiking in dozens of states, calling into question whether state and local authorities will hit the brakes on the economy again.

As it is, pulling in customers during multiple 'phases' of reopening has been challenging. Businesses have had to constantly update their marketing for which services they're providing -- Delivery? Curbside pickup? In-person shopping? Outdoor dining only? -- and the new health rules that go along with those.

'It's an extra PR nightmare,' said Ann Leadbetter, who owns Meriwether Cider in Boise, Idaho, with her husband and two adult daughters. Her business includes a tap room and a cider house from which they sell their own hard ciders.

But small business owners say the biggest ongoing hurdle is the financial uncertainty that clouds everything.

No idea when they'll be able to operate 'quasi-normally'

Leadbetter said she is grateful for the PPP loan she received because it helped her family stay in business. And she is grateful that the federal CARES Act relieved business owners of the obligation to make payments on their other Small Business Administration loans for six months. Her family had taken out two when they started their company. But they'll need to start paying again in September.

'We, like many businesses, thought by the time the PPP funds ran out and the loan payments were due again, we'd be out of the woods and able to operate quasi-normally. Now, as cases are spiking and predicted to spike even more in the fall, this is no longer the case. And I'm getting spooked about what will happen next. If we have to go into full lockdown again, all bets are off,' Leadbetter said.

'No one has a working plan'

Cliff Hodges, founder of California-based Adventure Out LLC, which provides lessons and retreats in surfing, rock climbing, mountain biking and other outdoor adventures, has been having a survivalist adventure of his own since March, when he had to temporarily shut operations down.

The majority of his revenue is generated between May and October, but the bookings for his high season come in March and April. As a result, Hodges said, 'Our regular bookings are down. And our corporate bookings are gone.'

Having reopened this month, the company is seeing a spike in demand because people want to get outside after so many months at home. So Hodges is actually trying to hire a few more staff -- to add to the majority of employees he was still paying once he received his PPP loan.

But coronavirus cases in California are also spiking, so it's unclear what's ahead -- whether potential customers will stay away or whether counties in which Adventure Out operates will again issue stay-at-home orders. 'No one has a working plan for this,' Hodges said.

Besides losing more money, Hodges worries he might get a bill from the state to replenish his company's unemployment insurance reserve account to help cover some of the unemployment benefits staffers received after being laid off. While the federal government under the CARES Act subsidized many of those extended benefits, it's up to individual states to determine whether employers will be on the hook for additional payments. Hodges hasn't been able to get clear guidance on how California will rule. And CNN Business has not yet heard back on the matter from the state's employment development agency.

In the meantime he hasn't been paying himself, noting that payroll, rent and utilities top his priority list. 'I don't see a near-term future where I get paid. I'll be shocked if I'm able to pay myself in 2020.'

'A series of impossible questions'

Chris Morgan and Gerald Addison were scheduled to open their new restaurant Bammy's in Washington, DC, by the end of March. That didn't happen. They made the call not to open a few days before the DC government banned in-person dining.

But they decided to bring on a smaller-than-expected staff to do takeout starting in mid-May. A few days later, they were allowed to start offering patio service. And, as of this week, indoor dining is now permitted. But they said they're not yet comfortable doing that for the safety of their staff and customers.

Indeed, restaurant and other business owners are facing 'a series of impossible questions' as coronavirus cases surge in so many places, Addison said. 'It's on everyone 's mind. It's hard to ask someone to come back off of unemployment and then a week later for things to shut down again.'

While they didn't qualify for a PPP loan because they weren't open for business earlier in the year, they have been taking the new employee retention credit, which offers them a quarterly tax credit equal to half the wages they are paying staff. Total credits combined can't exceed $10,000. 'It works out well if you're trying to test the waters and don't have a full staff yet,' Morgan said.

They're currently paying five employees, but not themselves or their spouses. And having been in the restaurant industry for years, they know how to run lean.

One of their big financial concerns going forward is rent. They took over a pre-existing lease with six years left. 'We're trying to figure out a way forward so [the landlord] understands we're doing our best to pay what we can,' Morgan said.

What's needed next?

To thrive, small businesses need customers willing to spend and the confidence to leave their homes.

With historically high unemployment rates and a persistent, poorly managed public health crisis, both may be a ways off.

Many lawmakers' appetite to do yet another massive stimulus package is waning. But they may pass a more 'targeted' one this summer.

There has been a push by small business advocates to automatically forgive PPP loans under $150,000. And some are even asking for business owners to be allowed to get a second PPP loan since the program still had more than $130 billion in remaining funds as of this weekend.

But many small business owners would rather avoid more loans, even if there's a chance they could be forgiven eventually.

To the extent there is more financial assistance, Hodges hopes it comes in the form of a grant. 'It's absurd and terrifying to take out a loan when you're running negative. It took me the first 10 years just to pay off my original loans. I'd rather just quit.'

Indiana Coronavirus Cases

Data is updated nightly.

Cases: 752108

Reported Deaths: 13816
CountyCasesDeaths
Marion1033831790
Lake558431013
Allen41736693
St. Joseph37007565
Hamilton36617417
Elkhart29425461
Tippecanoe22938228
Vanderburgh22565400
Porter19369327
Johnson18486389
Hendricks17696317
Clark13233195
Madison13176344
Vigo12631253
LaPorte12429221
Monroe12226176
Delaware10970198
Howard10349224
Kosciusko9643121
Hancock8578147
Bartholomew8174157
Warrick7864156
Floyd7815180
Grant7248179
Wayne7164201
Boone6979103
Morgan6768141
Dubois6224118
Marshall6214116
Cass6024110
Henry5903110
Dearborn589878
Noble581688
Jackson509476
Shelby502396
Lawrence4753122
Gibson445595
Clinton443555
Harrison441775
DeKalb440385
Montgomery439890
Whitley406744
Huntington403381
Steuben400859
Miami395769
Jasper389155
Knox377691
Putnam373461
Wabash362383
Ripley347370
Adams345555
Jefferson336186
White332753
Daviess3035100
Wells295481
Decatur289892
Greene286885
Fayette284864
Posey274335
LaGrange273272
Scott270356
Clay267148
Washington246336
Randolph245183
Jennings235349
Spencer234531
Starke228159
Fountain222048
Sullivan214843
Owen212358
Fulton204043
Jay201032
Carroll193820
Orange188255
Perry187237
Rush175926
Vermillion175344
Franklin170435
Tipton166646
Parke149616
Pike138334
Blackford136232
Pulaski120847
Newton114936
Brown104443
Benton102614
Crawford102516
Martin91815
Warren84115
Switzerland8158
Union72810
Ohio57911
Unassigned0424

Ohio Coronavirus Cases

Data is updated nightly.

Cases: 1109697

Reported Deaths: 20213
CountyCasesDeaths
Franklin1289521469
Cuyahoga1158802216
Hamilton814201251
Montgomery525861049
Summit484551006
Lucas43384824
Butler39098606
Stark33355930
Lorain25689506
Warren24612305
Mahoning22388602
Lake21219389
Clermont20138253
Delaware18892136
Licking16671225
Fairfield16589204
Trumbull16560483
Medina15618273
Greene15292248
Clark14244306
Wood13296200
Portage13254216
Allen11919239
Richland11611211
Miami10857225
Wayne9153225
Columbiana9039230
Muskingum8909135
Pickaway8664122
Tuscarawas8654251
Marion8649139
Erie8058165
Ashtabula7171179
Hancock6999133
Ross6948163
Geauga6850151
Scioto6540106
Belmont6159174
Union585049
Lawrence5741102
Jefferson5683159
Huron5554122
Sandusky5444126
Darke5420129
Seneca5350128
Washington5321109
Athens524460
Auglaize502487
Mercer487785
Shelby477095
Knox4573112
Madison444566
Ashland435997
Putnam4336104
Defiance432399
Fulton432274
Crawford4046110
Brown402761
Logan387678
Preble3859105
Clinton379266
Ottawa373581
Highland360266
Williams348578
Champaign344959
Guernsey325254
Jackson318454
Perry297350
Morrow291940
Fayette285750
Hardin275765
Henry273867
Holmes2703101
Coshocton269360
Van Wert247264
Adams243156
Pike242835
Gallia240850
Wyandot234756
Hocking220663
Carroll197548
Paulding176642
Meigs148540
Monroe136345
Noble136239
Harrison114138
Morgan110124
Vinton85717
Unassigned03
Fort Wayne
Cloudy
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Hi: 84° Lo: 62°
Feels Like: 79°
Angola
Cloudy
73° wxIcon
Hi: 82° Lo: 59°
Feels Like: 73°
Huntington
Cloudy
76° wxIcon
Hi: 82° Lo: 59°
Feels Like: 78°
Decatur
Cloudy
77° wxIcon
Hi: 83° Lo: 60°
Feels Like: 79°
Van Wert
Mostly Cloudy
80° wxIcon
Hi: 85° Lo: 60°
Feels Like: 81°
Daily rounds of showers and thunderstorms will increase the flood threat across northeast Indiana and northwest Ohio.
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