‘We’re here for you’: Nonprofit approves nearly $400,000 in small business loans
- That’s when Jeanine’s Restaurant and Bakery found its place in Santa Barbara.
But when COVID-19 hit, the local staple, like so many other small businesses in town, felt its hard-earned stability waver. Establishments that have never known Santa Barbara as anything but home were suddenly left with a choice – to weather the storm or to shut down.
Stories like that of Jeanine’s have been told time and time again since the pandemic swept the United States. The harsh reality is known from the federal level down to citizens struggling to pay rent. Yet when Women’s Economic Ventures saw COVID-19’s personal impact creep closer, the nonprofit knew it couldn’t let businesses like Jeanine’s become another disheartening headline.
“Small businesses are our community,” said Kathy Odell, WEV CEO. “They’re our friends and neighbors. There’s a very real impact on them. When you read about big companies struggling it’s sad, but it isn’t like watching your neighbor not be able to pay their mortgage.”
Reacting to the crisis as fast as it could, WEV created the Quick Response Loan program on March 18, a means of emergency financial support for Santa Barbara and Ventura County businesses experiencing hardship due to the coronavirus. Now, over a month later, the nonprofit has approved 50 loans for a total of $392,500. Of those, 40 businesses have received $332,500, including Jeanine’s.
Though WEV cannot approve every request that comes in, the nonprofit is well aware of the community’s need. Since the virus began to impact the Central Coast, WEV has experienced a significant influx of calls from business owners seeking advice and emergency funding. The nonprofit soon found itself in a unique position to help, as the crisis was merely an extension of what it handles on a regular basis.
For nearly three decades, WEV has been a patron of micro-businesses, defined as those with fewer than five employees and less than $1 million in annual revenues, by providing training, coaching, and loans to more than 300 local establishments owners each year.
The role WEV plays in the small business community is integral to their survival, as many of them do not have the cash flow, reserves or insurance coverage to withstand a short-term interruption in sales, let alone the indefinite impact of a national health crisis. So when the call to step up rang in, WEV knew it had no other choice but to help its longstanding community partners.
“Some of these people we have known for ten years or more,” said Ms. Odell. “To see them close half down and have no way to save their employees…it’s tragic. Our quality of life is based on these small businesses. We needed to see if as a community, we could help them get through this.”
WEV’s support extends past the typical mom-and-pop retail shops or small-town restaurants that come to mind the sphere of small business. They include establishments like Dioji, a doggie daycare in Goleta or Carlyle Salon in Santa Barbara. For these businesses, WEV’s loans have made all the difference.
“I am grateful for the quick turnaround time on the (COVID-19) relief loan that WEV is offering,” said Lisa Gaede, owner of Carlyle Salon. “I knew when we had to close that it would take a while to receive funding because so many small businesses are suffering. WEV had their relief loan in place quickly and it was a super smooth process.”
Ms. Gaede’s request is one of many. As of April 17, WEV had received loan applications for $1,134,850, and the applications keep rolling in. For now, WEV will continue to fund as many requests as it possibly can until its own reserves are exhausted.
Now, that doesn’t mean draining every bit of capital the nonprofit holds, but it’s willing to push as far as it can to support Santa Barbara’s small business community. Fortunately, WEV has received some help in realizing that goal.
When the loan program was in its beginning stages mid-March, the Women’s Legacy Fund of the Ventura Community Foundation and the Santa Barbara Together Fund, an offshoot of the Santa Barbara Foundation, each granted WEV $125,000. These donations, on top of what WEV had already stored as an established supporter of small business in town, gave its quick loan program some breathing room.
Still, with an upward limit of $10,000, WEV’s loans aren’t meant to prop up businesses through the length of the pandemic. Instead, they are intended to provide a buffer as more substantial means of support come in.
Those opportunities include the Small Business Administration’s Paycheck Protection Program and Economic Injury Disaster Loan program, both of which are intended to provide emergency assistance to small businesses.
Slammed with demand since their creation three weeks ago, both programs stopped accepting new applications due to a lapse in appropriations funding. Also built on a first-come, first-serve basis, many small businesses saw the loans drift away before they got a chance to apply.
To remedy this inequity in funding distribution, the Senate passed a $484 billion deal on Tuesday to replenish the overrun loan programs. The legislation will increase funding for PPP by $310 billion, as well as boost the EIDL program by $60 billion, along with additional aid for hospitals and coronavirus testing.
Yet, even with these improvements in mind, Ms. Odell is skeptical funding will arrive anytime soon. In her eyes, small businesses’ current crisis is one she’s seen before.
In 2017-18, the Thomas Fire and subsequent Montecito debris flow sent small businesses into a spiral. At the time, WEV stepped in to support those struggling until the SBA loans kicked in, like today. The only difference is the nonprofit knows how that situation panned out.
Of those on WEV’s radar that applied for SBA loans at the time, only 40% were approved for funding, and the period it took to receive those loans extended far past expectations. The widespread denial and delay were in part due to small businesses’ inability to seek out and manage emergency funding, Ms. Odell noted.
“One of the things that we learned in the fires and mudslides was that many small business owners weren’t certain how to manage cash flow through a slow period and how to look at recasting projections,” she said.
This time around, the nonprofit took that knowledge gap to heart. Building on the emergency response mechanism it had established two years ago, WEV quickly evaluated how they could offer technical as well as financial support to mitigate COVID-19’s impact.
Through the pandemic, WEV has offered free webinars, guidance on specific SBA applications, unemployment assistance, and advise on insurance free of charge. By acting as a hub of information, the nonprofit hopes to give small businesses their best chance at seeing the other side of pandemic, regardless of the status of potential loans and unresolved applications.
“We help business owners look at what cash business owners have on hand, what sources of revenue remain, if there are any new sources of revenue,” said Ms. Odell. “It’s obvious now, but the first week we recommended one of our catering partners go into preparing for home delivery. She did that within a week and now, she’s helping prepare meals for hospital workers.”
Adding landlord negotiation and market exploration to its list services, WEV has swiftly become a name local businesses know they can trust – even when all the nonprofit can do is be a friend.
“I think the small business community knows who we are and how we operate,” said Marni Brook, WEV Director of Lending. “We come from a place of empathy, support and compassion. (Businesses) are looking for someone to say, ‘We know how hard this is and how the uncertainty of all of this is weighing on you. We’re here for you.’
“I’ve had people say to me, ‘We’re so thankful that you responded,’ because they submitted an application to the SBA and haven’t heard anything back. They know what they’re working with. They know that they could trust us and know that we are doing everything we can to support them.”
Applications for WEV’s COVID-19 Quick Response Loan Program remain open and are available at wevonline.org. Those interested in funding WEV’s efforts are encouraged to contact us.