PHOENIX —
Congress’ second round of coronavirus relief can’t come soon enough for Arizona’s hospitality business.
The peak tourist season - when the industry makes most of its money - hit rock bottom.
Now the long, hot, profitless summer is just around the corner
“It’s kind of up in the air right now,” Erin Westgate said from her Songbird Coffeehouse in downtown Phoenix.
Summer is coming and she still hasn’t nailed down a loan from the Paycheck Protection Program for her 8-year-old business to survive the next few weeks.
“Without having the busy season, getting through the slow season really scares me," she said.
The low-interest, easily forgiven loans allow small businesses to pay employees, rent, utilities and other bills.
The first $350 billion installment approved by Congress went fast. Now Republicans and Democrats are bickering over a second, $300 billion installment. Many economists say a third round of aid is likely.
Small businesses’ fear of the unknown carries some bitterness.
Hundred-million dollar restaurant chains Shake Shack and Potbelly Deli scarfed down federal bailouts that would support small businesses for years. Shake Shack was shamed into refunding the feds’ money.
Here in Arizona, data from the U.S. Small Business Administration, which runs PPP through local banks, appears to confirm suspicions that larger firms are first in line for the loans:
Arizona ranks fourth in the country for the average value of approved loans, but 32nd for the number of loans OK’d.
The average Arizona PPP loan through April 16 was $251,000, 20% higher than the U.S. average of $206,000.
“It does upset me because this was promised to be a small business lifeline,” said Sasha Raj, who’s awaiting a second chance at a PPP loan for her 12-year-old 24 Carrots vegan cafe and coffee shop in Tempe.
“I hope (the banks) have learned their lesson and they pay better attention to the smaller voices of companies like mine that are speaking back towards them.”
Thomas Barr, executive director of the small-business advocacy group Local First Arizona, says the numbers aren’t a surprise.
“It’s kind of mind-boggling that (we) and our community partners don’t know a lot of businesses that were actually funded the first round,” Barr said.
Local First Arizona is directing small business to an updated list of local lenders who will accept new applications for the PPP.
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