Small business owners call federal relief efforts a “hot mess”

Juliann and Kirk Francis, the owners of Washington, D.C., cookie chain Captain Cookie, were already hiring for their busy spring season when the coronavirus struck. Now the couple are trying to save their business, but say they are being stymied by the government’s federal relief efforts, which they call a “hot mess.” 

Like millions of other small businesses around the U.S., the eight-year-old company was blindsided by the pandemic. As Washington shut down, they were forced to cut their staff — who work in three brick-and-mortar locations and three food trucks — from about 45 workers to just 11. Both Captain Cookie and Tastemakers, an event hall and incubator kitchen the couple also owns, have applied for relief under the Paycheck Protection Program and other emergency federal and local programs. Juliann and Kirk Francis spoke with CBS MoneyWatch about their efforts to get federal aid. This interview has been edited for length and clarity.

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Juliann and Kirk Francis, the owners of Washington, D.C.-based Captain Cookie, at one of the cookie chain’s locations. Courtesy of Captain Cookie

What happened to you business when the coronavirus erupted?

Juliann: Normally at this time of year, we’re hiring like crazy and training. This is a very seasonal business, so right now we’d have a full cast of characters who had come in for the first time. I was actually in the process of vetting those applicants when all of this kind of blew up. I remember making a call to my general manager and just saying, “Okay, all hiring is on hold, everything is on hold. Plug our existing people into any current holes that we have and just stop bringing people on.”

We were within maybe a week or two of hiring an entire new staff for [a new store under construction in D.C.] I mean, that’s probably a good dozen jobs right there that  — just overnight — we were like, “Those jobs aren’t happening. We don’t know when they’ll be happening. We don’t know if they’re going to be happening.”

Kirk: To give you some context on the truck side, typically the trucks are doing about three events per truck per day, so maybe an average of 20 events per week. And those events might be worth anywhere from $ 500 to $ 1,500. Now we’re doing maybe two events a week. And those are $ 500 or $ 300. They’re the bare, I mean bare, bare minimum.

You started a GoFundMe campaign for some of your workers because they had trouble signing up for unemployment. Tell me about that.

Juliann: It was that first round of people that we furloughed really quickly, to get them ahead of the line, because at that point in time we had no idea if we were even going to be able to keep people on. It’s still a daily question we ask ourselves. 

Of those first people that I furloughed, none of them have successfully been processed through the system. Now I can see that the system is working — it’s just going very slowly — because I’ve gotten the verification inquiries. So that’s a month’s worth of income that they haven’t been paid for. And no unemployment has kicked in.

We all have this idea that there’s a social safety net and when people lose hours or they lose a job, they go and file for unemployment, and then they’re OK. But that’s not what’s happening.

As a business owner, that must be incredibly frustrating.

Juliann: So frustrating. I mean, these are literally people who can’t feed their families, right? That’s what we’re looking at. It’s the one thing in this whole process I’ve lost sleep over. If I can’t keep them on payroll, what is going to happen to them? And if this draws out, now I’m putting people into an unemployment system that I know is swamped and can’t handle them.

Kirk: We’re constantly balancing the ongoing guidance from the [Centers for Disease Control and Prevention] and local health departments on how we can safely conduct business. Because obviously, our first priority is not to contribute to the spread. And then, based on those guidelines, how can we continue to conduct business to keep as many people employed as possible?

Making a profit went out the window weeks and weeks ago, and we are just trying to cover our payroll right now. And try to manage or defer our other fixed costs such as utilities, rent, loans, stuff like that. So if we can pay our staff and get close to covering payroll, that’s a win in the new landscape.

Juliann: But not to be unclear, we are totally eating it right now. I mean, burning cash. 

Did you apply for a small business loan or loan deferral under the Paycheck Protection Program? And if so, how’s that going?

Juliann: I think I have applied for six different things now — grants and loans — and nothing, nothing has happened and nothing is happening. It’s a hot mess. It’s awful. And it’s a game of time — can our cash reserves last until the government kicks in? What needs to happen? Because based on the policy and the legislation, they’ve done the right things in terms of what should be happening. 

It’s the implementation taking so long that is a problem, because the average food industry business has less than a month [of operating funds]. We happen to be, maybe, in a little bit better position than that, but it’s still not a good situation.

Kirk: We’re hoping to build another new store. But instead, I took my entire wish list for the year and tore it up. If we survive, that will be the success for the year.

You also run a local business called Tastemakers, which is an event hall and incubator kitchen. What’s happening there?

Kirk: I’ve also applied for all that I can — the DC micro grants, the Paycheck Protection Program loan, the SBA disaster relief loan, the SBA debt relief for existing 7(a) loans — applied for all that. It’s been mostly a dumpster fire as far as interacting with the lenders or SBA directly.

The SBA loan officer I talked to said he was going to start drinking in a couple hours because “the one guy who can do anything at all is on lunch right now, and so we can’t answer any questions. And we have no idea how we’re going to implement all this.”

When I called SBA, I was caller number 679 in the queue. No surprise — an administration that has frozen federal hiring and gutted a lot of the departments doesn’t have a bureaucracy that’s sufficient to support it right now. It needs one.

You fill out the application the second it comes out because you know that the funds are limited and it’s probably going to be first-come, first-served as to who gets the money. And then it goes into a hole, and you hear nothing back and you can’t check on it because everyone’s phones are ringing off the hook and they can’t call you back and update you. 

So I have no idea what’s happened with the disaster relief loan application. I have no idea what’s happened with the Paycheck Protection loan. I have no idea what’s happened to the DC micro grant. 

Tastemakers has 75 members which are small food businesses and like their membership fees are what pays the bills for Tastemakers. We have pretty large fixed costs because rent and utilities make up a huge chunk of our operating costs.  

Then we have our ongoing construction loan and supplies and are now on a smaller payroll. And I can’t really get away from any of that. I can reduce the payroll a little, but no one is waiving utility fees. No one is waiving rent in terms of actually not paying it, the best you can hope for is possibly a delay.

What do you think other small business owners should know about getting access to some of these emergency funding programs

Juliann: Small businesses are viewed as very risky. We are fortunate as a company that we were established enough to have a lending relationship with Bank of America. We have a depository relationship with them. Those are requirements [to get a PPP loan.]

People hear “Oh, there’s relief loans. Oh, good. All small businesses are going to get a check from the government.” No. N-O. Not the case. I can tell you a lot of small businesses do not have that.

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Moneywatch – CBSNews.com

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