Bellingham small-business owners struggle to find financing during coronavirus changes
As the days continue to blend together and everyone wonders when and how we will get through this coronavirus pandemic, adapting to the changes and remaining optimistic are emerging as key character traits.
That’s particularly true with small-business owners, who face uncertainty they couldn’t imagine a few months ago. Many local stores and shops have now been closed for over a month, while others are limping along with trimmed-down services just to keep some revenue coming in.
Not only do they miss seeing their customers, but these owners are stressed about the very real possibility of bankruptcy and losing what they love to do. Asking for and getting financial help has been a frustrating experience: Rules continue to change, aid programs are overwhelmed quickly, the paperwork piles up.
Small businesses play a large role in Whatcom’s economy. In a recent study by SmartAsset, Whatcom ranked third highest in its Small Business Index in Washington state and No. 202 in the U.S. The index looked at several factors, including small-business concentration and income generated by those small businesses.
While finding help for these shuttered businesses has been difficult, more assistance might be on the way. With the passage of a new financial relief package by the federal government, the Paycheck Protection Program is receiving additional funding and will start accepting applications again on Monday, April 27.
The Working Washington Small Business Emergency Grant Program has received an additional $5 million. The program, run by the state Department of Commerce, is still closed for new applications but the agency is going through the list of current applicants, hoping to fund as many as possible. In Whatcom County, around 750 businesses applied to the program but only a fraction are expected to be approved for the grants. That’s because there were many more applicants for the $10 million grants across the state, but the Department of Commerce continues to seek more funding for the program.
“These funds support very small businesses, many of which have not been able to access federal business assistance programs,” said Commerce Director Lisa Brown. “We are focusing where we know assistance funds will immediately recirculate and strengthen communities.”
There’s also a wide range of other resources small businesses can check out on the Whatcom Unified Command website and at Western Washington University’s Small Business Development Center.
Despite the frustrations and the uncertainty, the small business owners interviewed by The Bellingham Herald remain optimistic, thanks largely to the support they’ve received from family, the community and the local experts helping them through the financial aid process.
“I feel so lucky to live in a community like Bellingham,” said Elizabeth Azzara, who operates the Honey Salon, which recently moved into the Granary Building on Bellingham’s waterfront. “We have such a strong network of sustainable, thriving small businesses, and if we continue to band together we will make it through this hard time. There is real power in numbers.”
Here is a look at four small businesses in the downtown core of Bellingham, and how they are getting through the pandemic:
Pure Bliss Desserts
When the coronavirus restrictions started across Washington, Pure Bliss Desserts owner Andi Vann initially didn’t want to do grab-and-go service out of concern for spreading COVID-19.
However, as customers continued to stop by the Cornwall Avenue business and she saw how damaging this closure was to her employees, Vann decided to set up a system outside the store, improved the ordering system on the store’s website and worked with Viking Foods on delivering the desserts.
“I realized that if it was possible, we should provide treats during this sad, stressful time,” Vann said.
She hopes that relationship is one reason businesses like Pure Bliss Desserts will return when they are able to fully open again. The downtown store, owned by Andi and Nick Vann, have been working with Eric Grimstead at Western Washington University’s Small Business Development Center.
“He (Grimstead) kept us sane through the process,” said Nick Vann, noting that several times he asked Grimstead for advice when he and Andi felt overwhelmed.
While many small businesses haven’t seen federal paycheck protection funding, the Vanns were approved through Peoples Bank, which has its headquarters in Bellingham.
Nick Vann said he thinks it helped going through a local bank to get funding. Several small-business owners he knows who didn’t receive funding had gone through bigger banks that were just clogged with applications, he said.
Getting approved for that financing has allowed the Vanns to focus on surviving and eventually fully reopening. Andi Vann said she’s focused on keeping a consistent schedule for the customers.
“During the first two to three weeks, something big was changing every day,” Andi Vann said, adding that she feels they’ve adjusted and can now be there for their customers.
Neko Cat Cafe
The Neko Cat Cafe was one of the more anticipated downtown Bellingham openings in February, as crowds lined up to hang out with cats that were available for adoption. It was a six-month renovation, turning a former photo lab store into an area where cats and people could mingle.
A month later both the Bellingham and Seattle Neko cafes were closed, leaving owners Caitlin Unsell and Cory James wondering what to do next.
They’ve been working hard to get financial help during this pandemic, including working with banks and other loan programs like Boefly. So far they’ve been unsuccessful, but remain hopeful while staying on waiting lists in case more funding is available.
The frustrating part about it, Unsell said, is they’ve been on top of all the changing information, filing as soon as a program opens up.
“We were so hopeful after the CARES Act was announced and we were eagerly awaiting the first possible moment we could apply to make sure we got access to funds before they ran out. We thought if anyone was going to get this, it would be us,” Unsell said in an email.
To reduce payroll costs the company had to temporarily lay off 30 employees a week after it closed. James and Unsell still have 16 cats in their care in Bellingham with the help of a couple of volunteers. In Seattle they were able to adopt out the majority of the cats the week after closing and find foster homes for others.
Unsell said they are looking forward to reopening, but realize the cafe will be drastically modified.
“Our staff miss the kitties so much. They are so eager to get back to work,” Unsell said, adding that she’s also very appreciative of customers’ letters, messages and donations expressing love and support.
Neko is accepting financial donations to help pay for cat care while the cafe is closed. That can be done through Neko’s website.
Honey Salon
Azzara’s experience is similar in many ways to what the Neko Cat Cafe has gone through during this pandemic.
Her business Honey Salon was founded in 2009, but she had taken out $200,000 in loans to expand her business into the Granary Building on Bellingham’s waterfront. Being one of the first tenants in the remodeled building on the redeveloping waterfront district, it was like starting a new business.
Just weeks after reopening in her new space with 22 employees, she had to shut it down as the restrictions took hold.
Her search for financing is frustrating, she said in an email. She applied for a payroll loan, but, like many businesses, was put on a wait list when funding ran out. She’s also applied for other types of loans to broaden the potential number of lenders.
Based on business owners she’s talked to, those who seem to have more success are those with a previous business relationship with the lender.
She said her landlord, Harcourt Developments, has been compassionate about rent, telling her she won’t be responsible for it until Honey Salon is back up and operating again.
In the meantime, she regularly stays in touch with her staff, whether it is through Zoom meetings or a WhatsApp page. She said it has been a daily source for support and communication for her.
Azzara is concerned about how things will work as we move past the pandemic. The expectation is that salons, bars and restaurants will serve fewer people at one time, but smaller groups won’t cover the current overhead of operating a business.
For now, Azzara said the best way to support Honey during this closure is to shop at its online store, honeybellingham.com.
Old World Deli
Old World Deli has gotten creative in order to keep operating, including establishing a grocery delivery service to go with its curbside service and to-go meal menu.
Even so, they couldn’t find enough work for their staff so they applied for the Payroll Protection Program through WECU. Co-owner Anna Adams said it was an arduous process; she spent the entire Easter weekend on the phone and working on the loan application with her bookkeeper, Sara Williams. Ultimately Old World Deli was approved for the loan.
“I absolutely could not have done it without her,” Adams said in an email, referring to Williams.
Adams said that delivery service has gone well and she is hoping it will increase as they continue to add to the deli’s website. One encouraging sign for the deli is that along with the longtime regulars, they’ve seen a steady number of new customers.
*We have felt so much love and support from this community. Every day we are so thankful for the people who have supported us throughout the years and show up for us,” Adams said.
She believes Old World Deli will survive this as the community gets to a new normal, whatever that is. As the co-owner, Adams’ focus is making sure her staff stays healthy
“That’s the one unknown factor that scares me a little,” Adams said, noting that they are following pandemic safety guidelines.
While staying focused on the business, Adams does look around and see what’s happening downtown.
“It’s so hard to see all the businesses who are not receiving help or have businesses that cannot be open. We hope for everyone that we can flatten the curve and get back to some sort of newer normal where our town can economically come back,” Adams said.
