By August Barham 

Dec. 6, 2021

 

WASHINGTON—In November 2020 Washington, DC residents learned that the owner of Sakina Halal Grill, known for providing free meals to people experiencing homelessness, might lose his restaurant due to losses during COVID-19. Inspired by owner, Kazi Mannan’s generosity, people raised over $300,000 to save the Grill. A year later, Mannan is in the same situation. This time, he is calling on the government to help.

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“That cause [feeding the homeless] is actually more than me running a business, it is very dear to my heart,” said Mannan, who continues to serve all visitors regardless of their ability to pay. “We want this restaurant to survive and what I see is, it looks like it is going to be tough through this winter. I am just worried that we are going to lose what we have and what we are trying to achieve.” 

 

Mannan said that he has applied to most available federal pandemic relief funds but has only received one— a Paycheck Protection Program (PPP) loan. PPP was established in the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress in March 2020. The program provided small business owners financing to cover up to eight weeks of payroll and benefits for their employees, with a 1% interest rate. Mannan received one Paycheck Protection Program (PPP) loan totaling $26,500—about one month’s expenses.

 

In April 2020 the Paycheck Protection Program and Health Care Enhancement Act provided  an additional $310 billion in funding for PPP loans, according to Foley. Mannan said he applied for a second PPP loan but was denied without explanation. The program is now concluded.

 

With funds exhausting quickly and additional COVID-19 variants impacting the nation, the American Rescue Plan was signed into law by President Biden in March 2021. The plan included the Restaurant Revitalization Fund (RRF), which provided restaurants with grants equal to their pandemic-related revenue loss. Mannan said that he applied to and was relying on the RRF but was, again, denied without explanation. The RRF fund has been exhausted and concluded.

 

Mannan is still experiencing pandemic revenue losses and asks Congress to pass another RRF program.

 

“I have a desperate plea to Congress: give us the RRF grant,” Mannan said. “[So] we can continue to pay our bills and to pay our landlord.”

 

Iva Gotzev, the co-owner of Zeleno coffee shop and Toolbox Pilates Art Studio in Dupont Circle says that she received one grant from the RRF. She was unable to provide the exact grant amount but referred to it as a “little fund.” Gotzev said she has applied to every available program but has received no other federal funding.

 

“I'm Bulgarian, I came to this country to live the American dream in different ways, like opening small businesses,” said Iva Gotzev, co-owner of Zeleno coffee shop and Toolbox Pilates Art Studio in Dupont Circle, in a phone interview. “I don't have a backup plan.”

 

Both Mannan and Gotzev said that throughout the pandemic, their revenue has gone down while their operating costs have stayed steady or increased. At her Pilates studio, Gotzev said, she is seeing less than half of her pre-pandemic clientele, but her $10,000-a-month rent has remained the same. Mannan said that he is making about 30 percent of his pre-pandemic sales at Sakina Halal Grill, but supply prices have increased by about 40 percent. 

 

During a November 16 hearing before the House Committee on Small Business, U.S. Small Business Administrator, Isabella Casillas Guzman spoke about what she said was the SBA’s commitment to assist small businesses still in need of support.

 

“A recent survey from Goldman Sachs found 88% of small business owners support the federal government providing additional financial emergency assistance given the rise of new COVID-19 cases,” said Guzman. “Because of this, the SBA will continue to provide relief, and maintain rigorous oversight of our COVID relief programs.”

 

As of now, most major federal relief programs for small businesses remain closed. However, the COVID-19 Economic Injury Disaster Loan (EIDL) program, introduced in April 2020, is accepting applications until the end of December 2021. EID is a long-term loan to help cover some operational expenses for business owners. according to Chris Hatch, SBA Mid-Atlantic Regional Communications Director, EIDL was one of the SBA’s first attempts to support small businesses affected by the pandemic. Hatch suggests that small businesses submit their EIDL applications as soon as possible.

 

“Folks have until the end of December to get their applications in, but they should not wait,” Hatch said. “We [the SBA] recommend they do it sooner— as we're getting to the end of the month here—because you never know when the money is going run out in there.”

 

Biden’s proposed infrastructure bill, the Build Back Better Act (BBB), could also provide some continued aid for small businesses. If passed by the Senate as is, BBB would invest about $5 billion into SBA recovery programs. Many of these programs are loan-based, with about $1.5 billion allocated for a direct loan program and about $950 million to extend the waivers for loan fees, according to Forbes.

 

Mannan said that loan programs are not always feasible solutions for struggling small businesses.

 

“If we are borrowing money—and we have to pay it back—for small businesses it will be for a lifetime,” Mannan said. “Because after the pandemic it is going to be a while for the business to be in a good shape to pay a big payment back.”

 

Mannan also worries that even if more federal relief is passed by Congress, his application will not be approved without explanation.

 

“That is my worry if they pass [more relief funding], that we are still going to be left out.” Mannan said.

 

Multiple interviewed business owners noted concerns about how the funds were distributed. Aware of the disproportionate effect the pandemic had on small businesses owned by historically disadvantaged groups, the Biden administration, and SBA committed to offering targeted support to businesses owned by women and people of color.

 

“These underserved businesses have faced disproportionate hardship during the pandemic,” Guzman said. “And, they continue to grapple with longstanding inequities and persistent barriers to the capital, markets and networks they need to survive and thrive in any economic conditions.”

 

In the case of RRF grants, the government faced legal obstacles in its mission to target some support to historically disadvantaged groups. When the RRF was established, Congress directed the SBA to exclusively approve priority groups— women, military veterans and “socially and economically disadvantaged” people—for the first 21 days. Multiple lawsuits followed.

 

White business owners and conservative legal groups sued, saying that the exclusivity period was discriminatory and unconstitutional. Following these suits, about 3,000 grants awarded to business owners in the priority groups were rescinded, according to The New York Times. 

 

Some of RRF grants were awarded to major corporations such as Subway, IHOP, Panera Bread, McDonald’s, Dunkin’ Donuts and others—according to data released by the SBA. Some interviewed small businesses raised issues with large corporations receiving the largest allowable RRF grants— $10 million.

 

“Some of the chain businesses got like $10 million from that grant,” Mannan said. “Small businesses like ours that don't have other resources for support are left out.”

 

Roberto Rivera, Manager at Spokes Etc. Bicycles in Alexandria, VA said that some of these corporations could have likely found support though sources besides the federal government.

 

“Their investors could have easily provided backing instead of the government giving them backing,” Rivera said. “Because of it, a lot of smaller businesses went under. People's livelihoods were basically put in danger because they just weren't able to provide for themselves.”

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Unlike RRF, The Shuttered Venues Operators Grant was specially geared toward small businesses. The grant program, amended in the March 11, 2021 American Rescue Plan, provided $16 billion in grants to shuttered theaters, cultural centers and other venues.

 

“90 percent of those grants went to venues that had fewer than 50 employees,” said Hatch. “So again, really, really pointing towards small businesses—the smallest of small businesses.” The program concluded on August 20, 2021. No interviewed small businesses noted receiving a grant from this program.

 

Hatch, says that the SBA has worked within the legal, personnel and financial confines it was provided to support small businesses during the pandemic.

 

“I just want to thank our small businesses for understanding the limitations that the Small Business Administration was working with and is working with as far as personnel,” Hatch said. “We are trying our best to work within the laws we were provided.”

 

Besides providing financial support, the SBA also provides educational resources and guidance to small businesses. While recognizing that the guidance is not feasible for everyone during the pandemic, Hatch says that flexibility and preparedness are some of the best survival techniques for small businesses.

 

“We offer classes and one of the many things we teach—in addition to fiscal responsibility and capital— is being flexible,” Hatch said. “You can't get a loan to start your business or to grow your business unless you have a business plan.”

 

Hatch said that some businesses have fortunately been able to quickly adapt to the situation.

 

Autumn Clayton, owner of Covet, a boutique gift shop in Arlington, VA, said that the pandemic forced her to adapt her business. She opened an online store in addition to her brick-and-mortar store.

 

“The pandemic has had an effect on my business mostly, oddly, in a positive way,” Clayton said. “It forced me to try new things and took me out of my comfort zone and now I have a steady flow of online sales along with my in-person sales.” 

 

While Spokes Etc. has not changed its operations much during the pandemic, manager Rivera said that business more than doubled because more people were getting outside and biking. He also said that the business Spokes Etc. stays relevant by offering a service that people can’t get online.

 

“Providing services that people either can’t provide for themselves or that you can't get online,” Rivera said. “That's how we future-proof ourselves.”

 

Hatch said that during his experience advising small business owners throughout the pandemic, success stories like Clayton’s and Rivera’s have given him hope. 

 

“I've personally been on the phone with a lot of small businesses, particularly at the beginning of this whole thing, in tears trying to figure out what they're going to do next,” Hatch said. “It is emotionally draining, but each one slowly emerged into a success story.”

 

Although businesses such as Covet and Spokes Etc. have been positively affected by the pandemic, in general, small businesses in the Washington-area say they are in dire need of additional financial support.

 

“We don't have enough sales to pay our rent and even all the utilities and everything,” Mannan said. “We are in a desperate situation where if soon we don’t receive the help, we will be closed for good.”