Nicholas and Kristen Rowell took over ownership of Little Monkey Bizness children’s play space in Shawnee, Kansas last October, and have booked evenings and play dates through April. Then the coronavirus hit; they closed the business on March 16.
Now the Rowells are among the hundreds of thousands of small business owners seeking emergency financial assistance due to the COVID-19 pandemic. They began applying for small business loans on April 3 under the federal CARES Act, a new law that attempts to help employees and businesses recover from economic devastation.
Short-term cash assistance can help pay payroll, rent, mortgage interest, and utility costs. Principal amounts may be forfeited within the first eight weeks after the loan is granted, with proper documentation of the eligible uses of the money.
âIt definitely gave us light at the end of a very dark tunnel,â Kristen Rowell told KCUR.
But there is no clear indication of how or when the help will arrive.
âIt’s a temporary program that, if properly administered, can really be a lifeline for small businesses,â Kansas City attorney Mark Untersee said. âThe difficulty lies in the speed of its emergence and in the rapidly changing environment, both regulatory and banking. It’s not something that none of them had a platform out of the box.
He said banks are scrambling to figure out what they are doing at the same time borrowers are trying to figure out what they are supposed to be doing.
âThe combination of these things creates difficulties,â he said. “It’s no one’s fault.”
Nicholas Rowell said he sought help from the Small Business Administration as soon as the request was available and followed the advice in contacting his bank. But as of April 6, he had not yet had an answer.
âThe banks are overwhelmed. It’s a waiting game, âsaid Kristen Rowell, adding that they hope to get emergency funds soon and reopen by June 1.
Like the Rowells, Jessica Moler said her business was running long before the virus hit.
Moler and his partner had just moved their Hand & Land boutique and spa from Leawood, Kansas, to Midtown Kansas City in late February. They were thrilled with their new location until they had to close for the Kansas City stay-at-home order on March 24.
âWe’ve had a really good dynamic,â she said of the move to Midtown. “Mars started off so well.”
In addition to selling environmentally friendly health and beauty products, the new Hand & Land space had five practitioners who sublet rooms for acupuncture, massages and facials. Since the end of March, Moler has focused its efforts on selling products online, but the spa has ceased to operate.
She said her partner completed a loan application and contacted Mazuma Credit Union but had no response. They are looking for help with rent, payroll, utilities, and a myriad of business costs that continue to add up.
The pandemic has been extremely destabilizing for businesses in the metropolitan area.
Untersee said Monday he had worked on around 50 applications for small businesses seeking loan assistance through the CARES Act. Businesses seeking his help range from restaurants and small plumbing contractors to parts suppliers, with nearly every industry affected by the impact of the coronavirus on the local economy.
He said it is easier for small businesses to work through a lawyer or a bank with which they already have a relationship.
âIn fact, we have already filed a case on a number of clients and we expect funding for these applications within the next two days,â Untersee said, adding that some expertise is required to navigate this new program. âWe work with banks across the country.
At the Greater Kansas City Hispanic Chamber of Commerce, businesses are calling non-stop to ask about the loan assistance program and get help with Spanish translations.
âThis thing is happening so fast, so fast, and there is a lot of confusion,â Hispanic House Speaker Carlos Gomez told KCUR. “They fear the money will run out.”
The CARES Act provides $ 349 billion nationwide for small business loans, but many believe the need and demand will be much greater.
Gomez said the best-equipped companies have a good accountant and a good lawyer, but his organization tries to serve as a resource. He has organized several webinars to connect members directly with representatives of the Small Business Association. More information on these webinars is available at https://hccgkc.com/
Local relief fund
Kansas City donors, meanwhile, have secured some funding. A $ 5 million small business coronavirus relief fund has been launched by AltCap, a community development financial institution that invests in underserved communities. The $ 5 million was supported by the Greater Kansas City Chamber of Commerce, the Kansas City Area Development Council, City Council, and the Ewing Marion Kauffman Foundation.
Within 72 hours of the fund’s announcement, AltCap had 600 apps with $ 30 million in claims, according to President Ruben Alonso. The agency has approved several loans and is working through the huge backlog of applications, trying to get the money out as quickly as possible.
Alonso said they are providing loans of up to around $ 50,000, to try to stretch the fund as much as possible, while continuing to seek additional contributions from donors. They especially try to help small retailers, restaurants, hair salons and other types of businesses that have been particularly affected by stay-at-home orders.
âOur goal is to do what we can with what we have with this local effort,â he said. “What we’re really looking for is for the banks to help support us, by providing us with loan capital so that we can lend to small businesses.”
Lynn Horsley is a freelance writer in Kansas City. Follow her on Twitter @LynnHorsley.