Which program should you choose? The economic injury disaster loan and emergency economic grants programs—otherwise known as EDIL.
Or the PPP, which is the paycheck protection program—a forgivable loan for businesses and organizations with less than 500 employees?
Sound a little confusing already?
Amidst the myriad of potential opportunities to South Pasadena businesses for disaster aid relief are the complexities of interacting with their banks.
This is in addition to local government assistance, namely the Los Angeles county program of a “$10,000 grant”—of which there are only 50 available to the entire Los Angeles county region currently.
Businesses have reported to the South Pasadenan News that such funding relief would make the difference between closing their doors or being able to stay in business at all.
There is limited or no information on when this funding will actually be available or if applications are going to be approved or not. This leaves very hard-working, enterprising South Pasadena businesses confused, frustrated, and simultaneously hopeful.
The coronavirus aid relief and economic security act (CARES), signed by President Trump, is a more than welcome relief to local businesses: it’s survival. The costs of running a small business in South Pasadena are much more than the “civilian” public may realize. The “PPP”, or paycheck protection program, is designed to keep everyone on payroll so these businesses can function and continue to serve our community, as well as keep their workers employed so they can continue to serve their families.
The basic economics are pretty straightforward; here’s a quick example of what payroll could be for a local business here in South Pasadena. A small business with eight employees at $20/hr will easily run over $332,000 a year. Eight weeks’ labor is about $51,200 alone. Then one must factor in taxes, administration support, additional operation expenses, etc. Nearly zero revenue for eight weeks can potentially close a small business.
The PPP, for example, provides paycheck support for up to 2 1/2 times a payroll cycle so employers may get a few weeks to pivot into some new revenue streams to keep themselves going and keep their employees on board—that’s the idea anyway. This is very welcome news to some arguably heroic business owners doing everything possible to keep their people employed.
It’s not about greed or profits.
For the most part, South Pasadena businesses provide excellent service to a bustling, thriving town. The work that goes into running a small business is not a secret, and most business owners are passionate about what they do and are thrilled to have such great clientele. The loss of revenue is not just loss of revenue, it literally is survival. Most businesses are not making millions of dollars every quarter here in South Pasadena — and the ones that are generating that kind of revenue, such as Pavilions or Vons, have very thin profit margins and enormous overhead.
Our small businesses are fighting for all of us, and the flexibility and creativity required of them are unmatched. The relief plans could provide just the amount of time needed to pivot into what us South Pasadenans need right now. Some businesses have begun making masks, while other “essential services” have offered up their front window for merchandise for other businesses who cannot be open.
The Bissell House Bed & Breakfast, for example, has donated all of its rooms for at least six weeks so local doctors can stay there for free.
Businesses have reported to the South Pasadenan News about how wonderful their customers have been and how supportive our community is to them.
One business has asked us to relay a message to our readership on behalf of their staff and family:
“If you see a ‘GoFundMe’ Page or a fundraiser of some kind, please support it. If you have already supported, thank you so much. Thank you for being patient and kind during an extraordinarily difficult time. Some of us have had to lay off our employees and close our doors until this is over. Others are fighting hard to keep everyone they possibly can on staff while maintaining a high level of service to our adoring community. Thank you for the opportunity to be in service to you as a friend, neighbor, and customer. We are all working hard to bring you the very best that we have to offer.”