Skipping the Bailout Leaves Love to Pay the Bill for Shopkeepers

The customer had an odd request for Lori Carroll: Close your eyes and put your hand out, he told her.

With social distancing, they were the only ones in Jan’s bookshop in Beaverton, Oregon, where Carroll is sole proprietor. But she complied.

The customer put $100 in her hand, she said. Please keep the store open, he told her.

Triple-digit gifts from customers won’t cover expenses during the pandemic, but for many entrepreneurs, neither will a government bailout.Almost two thirds of small employers haven’t gotten any aid from the Small Business Administration’s $669 billion Payroll Protection Program, known as PPP. Some say they don’t need the money. Others believe they’d be violating their personal convictions by taking a handout.

Or, like Carroll, they say the chaotic application process would be a waste of time. The independent streak that makes them entrepreneurial also makes them proud to go it alone.

“On May 1, I paid my bills and I had $1 in the bank,” said Carroll, 37. “But I was happy because I paid my bills.”

As America cautiously reopens after two months of staying at home to stem the spread of the coronavirus, estimates vary of how many small businesses will end up so damaged by the shutdown they’ll permanently close.It could be as many as one in four. Beyond the numbers, mom-and-pop shops are the soul of many communities, in-kind donors to local charity fundraisers, sponsors of kids’ soccer teams and the first employers of high-school students. Many of them are beloved by their neighbors, who in small ways are trying to help fill the gap in revenue caused by stay-at-home directives.

Human Impact

“A lot of people are worried about what their towns and communities are going to look like,” said Theda Skocpol, a Harvard University government and sociology professor. “There’s a human impact as well as an economic impact.”

Small businesses not tapping the federal government for emergency funding will have to rely on other sources, such as local development organizations, said Patrice Frey, chief executive officer ofNational Main Street Center, a small-business advocacy group.

“Hyperlocal programs to connect small businesses to resources they need will be incredibly important,” she said. “It’s in the best interests of state and local governments to sustain these businesses. It means sustaining tax rolls.”

Lauren Hellekson experienced it first-hand. After studying yoga in India, she returned to her childhood home — Ravenna, Ohio, 40 miles southeast of Cleveland — to openMoksha Yoga & Meditation.

“We were ramping up for this to be a really, really good year,” said Hellekson, 34. Then the pandemic came. “We canceled everything.”

She said she sketched out what her PPP loan amount would be based on her net earnings as a sole proprietor. Figuring in all her recent studio-renovation expenses, she came up with $87.

“It gave me a nice laugh,” Hellekson said.

She said a sympathetic landlord and Ravenna’s Main Street America chapter, which put together a fund to buy gift cards from downtown businesses, have kept her buoyant spiritually if not financially.

“It’s been incredibly humbling,” Hellekson said. “So many people have been terrific. I joke that I no longer own my business. The town owns my business now.”

Food Pantries

Gift cards are also helping Amanda Weig’s Chrome Restaurant and Catering in Algona, Iowa, which stayed open for carry-out during the shutdown. Weig, 35, said one customer spent $3,500 to distribute cards to food pantries and police stations.

Weig said she didn’t need a PPP loan because she was doing fine.

“The government funds can go to other small businesses that are in greater need,” she said.

About 38% of small businesses in a newU.S. Census Bureau survey have received loans from the PPP, meaning a majority of the respondents aren’t relying on the government’s centerpiece relief program to stay afloat during the unprecedented health crisis.

Tom Sullivan, vice president of small-business policy for the chamber of commerce, said to expect a rough time for many entrepreneurs.

“The businesses that survive will be local heroes,” he said.


Gadi Gilan said he doesn’t want a bailout for his three suburban coffee shops. He wants customers.

On a recent cloudy morning, he had two. Both of them were regulars at Gilan’s other cafes, closed due to the coronavirus. Each of them had driven past at least a half-dozen other coffee sellers to get to Gilan’s American Bulldog Roasters in Ramsey, New Jersey, 30 miles northwest of New York City. Both said they wouldn’t have bothered going out of their way if it weren’t for Gilan.

“There’s a real atmosphere here, a vibe,” said Tom Flynn, who came from Ridgewood, seven miles away. “There’s life here.”

There may be life, but maybe not enough. Gilan, 65, said revenue is less than 10% of what it was before a statewide shutdown on March 21.

Gilan, who has six employees, said he applied for a PPP loan on the recommendation of his credit-card and didn’t get one.

“But if I did, I’d be inclined not to take it,” he said. “Everything the government does comes with strings attached. I don’t need them telling me what to do.”

— With assistance by Saijel Kishan

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