Story by Zoe Schlaak
Photo by Ella Jayasekera
Associate Photo Editor
The coronavirus pandemic has required small, non-essential businesses to close up shop due to social distancing restrictions. With South Pasadena being a prime hub for small businesses, the shutdown has taken a financial toll on the city’s economy. In an effort to keep small businesses afloat, the federal government has allocated $350 million to the PayCheck Protection Program (PPP) along with other relief grants from the Small Business Administration (SBA).
The PPP is a forgivable loan program for nonprofits, small businesses, and self-employed independent contractors intended to allocate loans to businesses to help them stay functioning and pay bills. In order to be forgivable, these provided funds need to be allocated to approved expenses while also keeping substantial levels of employment. These businesses, which are funded by the SBA, need to have fewer than 500 employees.
Economic Injury Disaster Loan (EIDL) was designed by the SBA to “provide economic relief to businesses that are currently experiencing a temporary loss of revenue” because of the coronavirus. Businesses can apply for this loan online and, in addition to the approved loan amount, they can also receive an immediate advance of up to $10,000. This advance, depending on qualifying factors, may not need to be repaid by the business.
Many businesses in South Pasadena have had to rely on the government to keep them going, because of many facing losses in income and customer demand.
Dinosaur Farm, the long-established toy Store on Mission Street, has almost reached its eighth week with no income. David Plenn, the owner of the local toy store, received a small loan from the Federal Government as well as the PPP loan but finds his store still needing lots of more help.
Most retail stores are struggling to keep a consistent income in place in order to make up for lost income suffered during the complete shut down of stores. New safety regulations, created through Phase 2 of Newsom’s plan, have minimized the available occupancy in businesses.
“I expect to be down 50-60% this year and that’s being optimistic,” Plenn stated.
Plenn is also planning to transition more of his store onto Dinosaur Farm’s website. He expects all inventory to be online by fall, in order to prepare for the holidays.
Local favorites, such as Alhambra’s Souplantation, have been unable to keep up. The small chain announced its closure in May, disappointing many in the community.
Fiore Market Cafe Owner, Bill Disselhorst, has had to take measures into his own hands since the government has yet to respond to his requests.
He’s hopeful that his application for a disaster relief grant from the SBA will go through. Along with his application for the PPP loan through two separate banks.
“One of [the banks] is Wells Fargo who I have banked with for almost 10 years. I have yet to receive the loan. I believe that I am close. I hope to hear in a few days,” Disselhorst stated.
Disselhorst ensured his employees that they will remain employed and paid. With a helpful recommendation from his son, a GoFundMe was set up to collect revenue to continue paying Fiore employees. To date, the fundraiser has raised over 20,000 dollars.
“The support on the GoFundMe has been tremendous. I may have been forced to close if it hadn’t been for that,” Disselhorst said.
Fiore has also converted to online ordering through a system called Toast. Although Disselhorst doesn’t enjoy seeing his cafe empty, he is confident operations are starting to run smoother.
Many small businesses are being forced to rely on online services that help sell their products. Companies like Postmates, Uber Eats and Grubhub allow restaurants to deliver locally to customers, but some extreme taxes strip the businesses of incoming profit. Since these are one of the only options to earn profit, businesses are forced to manage these inflated fees.
The South Pasadena City Council is hoping to help its small businesses directly and has discussed the possibility of allowing parking-lot dining spaces.
Meanwhile, California Governor Gavin Newsom, has devised a 5 stage plan for easing stay-at-home orders. Phase 2 is going into action currently, as small businesses are starting to reopen with strict safety precautions. Newsom has now allowed even more businesses and spaces to open this past week, although South Pasadena has yet to enact new reopenings.