The City of Chicago Small Business Resilience Loan Program – a new $ 100 million campaign set up to help restaurants and other small businesses affected by the COVID-19 outbreak – has had around 4,500 applicants since the program launched this week, according to a city spokesperson.
Restaurant owners who went through the process told Eater Chicago it was quick, with questions about how many employees each business has and how much money the business has made and what projects it has made. will be completed in 2020. The program, which is funded by grants, combines approved loans with external lenders such as Accion. Its website has hosted webinars for business owners and includes a FAQ to educate them – among other things, it reveals that undocumented citizens are eligible for loans.
However, owners of restaurants that have opened this year fear they will not receive help despite massive investments in their communities.
The application window is always open and there is no deadline to apply. But to qualify for the program’s low-interest loans (which can be repaid over a maximum of five years), businesses must have been open for at least a year before. the date of the request. This means that restaurants like Harbor, who open in january in the poorly served southern loop, were never taken into account when the program was created. When Harbor owners applied for a loan, says partner Adam Ellis, “we weren’t turned down, we were disqualified.”
Ellis stayed on top of his help options through the Illinois Restaurant Association and the Small Business Administration. Start friday, small businesses like Harbor can start applying for loans through the federal government’s new paycheck protection program.
About a week ago Harbor closed its delivery and delivery programs after struggling with coronavirus with two workers: one had started showing symptoms, while another has a spouse who is a primary care physician. The spouse tested negative. The owners of the restaurant have therefore decided to close with the intention of relaunching it next week.
While the questions on the city’s loan program application are supposed to allow business owners to demonstrate their need, Ellis believes they fail to measure this correctly. “Are we impacted by the coronavirus? Ellis said. “Clearly we are. “
In Avondale, Peter Shen, the owner of Sip turtle coffee, says he put his life savings into his business, which he opened in February with his wife, Sarinporn Intongkam. But when Shen applied for the town’s loan, it was quickly turned down. On Tuesday, he shared his frustrations on Facebook, where he pointed out that while established business owners often complain about over-saturation restaurants in Chicago, they have the advantage of building up cash reserves. New restaurants like Shen’s, meanwhile, are always exhausted by the city’s licensing process, which often requires owners to wait long periods of time to get approvals before they can open. While Shen waited for his permits to be approved, he continued to pay rent. Since signing his lease in 2018, he estimates he has swallowed $ 120,000 in coffee. Shen requested a loan of $ 50,000, the maximum amount available under the program.
“I put all my savings just to open,” says Shen, who grew up in Chicago (his wife is from Thailand). “I don’t have a year or two or three of savings to have a cushion.”
He wants the city to provide more support. When Sipping Turtle was refused, Shen felt that the program’s reject page did not provide enough resource advice. And there seems to be some confusion among the city’s rulers. Despite the requirement that a business be open for at least a year, a city official emailed Shen, telling him that his cafe had likely been denied a loan due to a condition of ‘eligibility demonstrating a loss or decline in profits of at least 25%. Shen says he didn’t expect to break even until the second or third year of operation.
Rocky Gupta understands the frustration of new restaurateurs. His father, David, founded Chef Luciano in 1982 near the McCormick Place Convention Center, and it was in part because of its 38-year restaurant history that it got preliminary approval for a loan from the city. As the restaurant specializes in take out and delivery, closing the dining room did not have a huge impact on daily operations. they didn’t need to create a new menu, for example. However, the stay-at-home order, which only keeps essential businesses open and has kept most of the well-meaning people inside, has hurt financially. Gupta estimates that sales are down 50-60%.
Gupta hasn’t heard anything new from town. Presumably, they check the restaurant’s financial situation, to see if Gupta has any outstanding fines or tickets, before continuing. It employs nearly 30 people whose hours it has had to cut due to the pandemic, and says a loan would help retain as many workers as possible. Yet Gupta realizes that this is a loan, not free money. He is not aware of a forgiveness provision; the restaurant will eventually have to reimburse the lenders.
That’s why Gupta is hopeful that the community’s support will continue, even when the dining rooms reopen and the stay-at-home order is lifted. Restaurants may struggle to find their place when they reopen.
“I think it’s a tremendous rallying cry with the neighborhoods that support their local businesses,” Gupta said. “But I think when it’s all said and done, and we’re open again, people should remember that.”