ENCINITAS — As the City of Encinitas begins to survey the full scope of it’s economic damage in the wake of the coronavirus pandemic, residents and business owners remain worried that a majority of businesses may still close, despite Governor Newsom’s May 1 announcement reopening select industries across California.
Though Encinitas has yet to release the full accounting of how many businesses benefitted from any coronavirus relief options, officials from the Encinitas Chamber of Commerce reported the numbers are both low and misleading.
Encinitas Chamber of Commerce’s Interim-CEO, Sherry Yardley, submitted the Chamber’s current numbers, alongside with the Leucadia, Encinitas, and Cardiff 101 Mainstreet Associations to the City Council this Tuesday, revealing that while approximately 62% of businesses applying were granted aid. Only 50% of those businesses have received funds to-date, while the remaining 50% still waiting, with little to no communication from the SBA, for the funds to arrive.
Furthermore, 32% of currently reported Encinitas businesses that applied for financial assistance were neither accepted nor denied, never receiving a response back.
“People are frustrated and feel they’re in limbo,” Yardley said. “Some of them applied and haven’t heard back, some were accepted but haven’t seen any of the funds, and some were flat out denied for confusing reasons.”
“We’re here to help as much as we can but it’s hard. Many of the issues stem from poor communication between federal and state governments, the SBA and banks. As a small business owner, it’s hard to keep up with it all and you’re the one stuck in the middle.”
The Coast News was unable to locate a business whose experience wasn’t still fraught with complications and challenges. None of the business owners interviewed considered the federal aid as capable of adequately covering expenses.
Tawnya Proctor, co-owner of Noni Salon in Leucadia, experienced the confusion of SBA’s loan application process firsthand, having been both denied and accepted.
When Proctor and her mother, a co-owner of the salon, applied for SBA loans as independent contractors, they were both denied. However when the salon itself applied for SBA loan, specifically the Paycheck Protection Program covering their one administrative employee, it was accepted.
“With the PPP, we didn’t get enough for that one employee’s salary beyond one month,” Proctor said. “Beyond that, it didn’t cover any business expenses, as advertised, and despite being accepted we still haven’t even seen any of the money.”
Noni Salon hosts 11 independent contractors, not including her mother and herself, renting out booths to style and serve clients. Of those 11, only 1 was accepted for an SBA loan, a mere 5 have received their personal COVID stimulus checks, and only 1 has been approved for independent contractor unemployment.
Despite days attempting to iron out issues with SBA officials over the phone, Proctor has found little success.
“It gets to the point where you just get so defeated and it’s so sad because you put so much time and effort into your business,” Proctor said.
On Tuesday afternoon, small business owners such as Proctor breathed a sigh of relief when San Diego County Board of Supervisors voted unanimously 5-0 to establish a framework for business openings, requesting complete independence from the state in choosing when and how local businesses open.
Beginning Friday, April 8, businesses that reopen will be required to address five specific issues according to the newly established plan, including employee health and safety, return to work policies, workplace social distancing, employee training and compliance and enhanced sanitation.
As of April 8, not all business categorized as Phase 2 will yet be allowed to open, leaving much of San Diego County shut down. For now, Phase 3 businesses such as Noni Salon will remain closed and wait.
This weekend, Encinitas Mayor Catherine Blakespear commented on the differentiation between businesses labeled as essential under Phases 2 and 3.
“I think it’s quite possible for the definition of essential businesses to be much broader,” Blakespear said. “It’s possible to use those same precautions for essential businesses on restaurants and other shops of all types, even things such as hair and nail salons… everything that people want to get out and do. We can do that in a responsible way.”
Blakespear acknowledged that ultimately, the decision was not hers and lay in the hands of the county, but insisted, “we have to get in front of this. We haven’t had a new case in Encinitas since April 11. This is something we can manage.”
Despite new reopening procedures, businesses such as Noni remain in danger as the governor’s office estimated Phase 3 businesses may not open for several months.
While Proctor applauded the county’s push for independence from the State in regards to determining local communities’ individual business timeline, she recognized problems still lay ahead in the coming months.
“How long are our landlords going to support us and hold on together,” Proctor asked. “At the end of the day everyone has to pay somebody. It’s either them losing their entire building or them finding someone else who can pay rent.”
With so few benefitting from SBA assistance and several months of closures still ahead, Encinitas’ business owners are left wondering, if these latest decisions will be enough to save businesses from folding.
Caitlin Steinberg is a Leucadia resident who is covering all things Encinitas for The Coast News.
She is also a fine art photographer, as well as a military historian and CEO of Operation Green Faces, a 501(c)3 nonprofit preserving the oral histories of UDT & SEAL Team operators in the Vietnam War.