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Bernie Ryba

Susan Rodgers, owner of Susan Rodgers Designs. Photo by Kyle Barr

Susan Rodgers had her storefront on East Main Street in Port Jefferson for seven years. But because of the COVID-19 crisis, she decided it was time to change shape and focus on online sales for her Susan Rodgers Designs business. 

“The numbers were going continuously down,” she said. “So, I decided to react and be proactive.” 

Rodgers, a jewelry artisan known for her delicate and beautiful designs first opened her original store in Sayville 10 years ago. Three years later, she moved to the North Shore, settling in the village of Port Jefferson.

The Stony Brook resident said that while the village helped her grow her clientele, the pandemic made it harder to stay afloat because of high rent prices and less customers shopping. She made the hard decision to close her shop and focus on e-commerce at the end of August. She officially closed her door in mid-September. 

“It killed me because I was there for seven years but, as the years went on, I saw my site doing better than my store,” she said. “It made me realize I don’t need 800 square feet to show my work.”

Bernie Ryba, regional director of the Small Business Development Center at Stony Brook University, said that Rodgers isn’t the only small business owner to focus on online sales during the pandemic. 

“Businesses that were reluctant to be more accepting of social media marketing and making sales over the internet are now much more willing to do so,” he said. “We’ve really had a bump in internet retail and also the use of social media marketing.”

Ryba added that business owners during COVID-19 realized that taking on more debt wasn’t the best option, opting to check out of their leases. “Banks are working with more industries,” he said, “But more small businesses are trying not to take on more debt.”

And that’s why Rodgers decided to leave. “Every month was $4,000 just to keep everything afloat,” she said. “If it wasn’t for the pandemic, I could have hired more people to help out. … It was a tough decision, but I know I made the right choice.”

Now she’s working out of her home in Stony Brook with one assistant. By saving money on rent and by being home, she’s able to focus on her online sales, which have started booming. 

“Working on social media, contacting buyers …  these are the things I never had the time to do before,” she said. “During all of this, I was able to fine-tune everything that I already had.” 

Although it’s working out now, it was a heartbreaking experience to close her store, nonetheless. “I had to make a decision with my head and not my heart,” she said. “The sales aren’t there, it’s hard — and for my small business owner friends, too.”

Rodgers said that even with Phase 4 reopening, she still had customers who wouldn’t come out and shop because they were still too nervous. Now her customers can shop in the comfort of their own homes. 

“I’m still here,” she said. “I’m just different for now.”

With No Indication of a Reopening Date, Businesses Try to Survive

Stock photo

A federal program meant to help keep businesses afloat during the pandemic has caused more headaches than relief. Business owners are concerned they will be saddled with more debt and unclear guidelines have left them with more questions than answers. 

James Luciano, the owner of the Port Jeff Lobster House and the Port Jefferson BID secretary, has received PPP loan funds, but expressed concern of how the federal government will handle the forgiveness process. 

“It [the PPP restrictions] has been so loosely written, it’s like reading a different language,” he said. “They have also changed the applications for loans two or three times.”

“There are some things that the current guidance doesn’t answer.”

— Bernie Ryba

Luciano has begun to use the money for rent, other remaining bills, paying vendors and some payroll expenses. Though until he and other business owners receive the approval to fully reopen its businesses, he said he may struggle to comply with the forgiveness guidelines.  

For the loan to be forgiven, 75 percent of funds must be used for payroll, keeping staff to pre-pandemic levels for eight weeks after the money is disbursed. 

“The clock starts ticking once the money hits your account,” Luciano said. 

The Port Jeff Lobster House owner reiterated the difficulty of bringing all employees back without the doors being open. Another obstacle is that some employees may opt to continue on unemployment as they are receiving considerably more money than at the restaurant, according to Luciano.  

Bernie Ryba, director of the Stony Brook Small Business Development Center, said there has been a lack of clarity on the forgiveness guidelines. 

“Clients have expressed some concerns to us, we are looking to the [federal Small Business Administration] for guidance on the forgiveness provisions,” he said. “It has caused many questions from us, CPA firms and law firms. We are hoping this is cleared up as soon as possible.”

Ryba said the center advises hundreds of clients and has received dozens of calls and emails from business owners on this topic. 

“As a business center we try to do research and address their questions the best we can, but right now there is very little to refer to,” he said. “There are some things that the current guidance doesn’t answer.”

Ryba pointed to one of the provisions of PPP that requires 25 percent of funds must be used on utilities. 

“Can it be used for heat, power, internet and transportation expenses? No one knows because there are no specifics,” he said. “There are lenders who have already spent some of their funds.”

The director of the business center said that the federal government didn’t have much time to react and the SBA was not staffed to handle the influx of applications from the onset. 

A recent report from SBA Inspector General Hannibal Wared detailed that many small businesses could struggle to meet the 75 percent payroll requirement. 

Ware called on the association to evaluate the potential negative impact to borrowers regarding the percentage of loan proceeds eligible for forgiveness and update requirements. 

With uncertainty over the current criteria of PPP, local municipalities have stepped in to offer alternatives to businesses. 

Brookhaven Town is offering $10,000 grants to small businesses as part of its Emergency Microenterprise Business Relief Program. It is aimed at microenterprise businesses within the town that have five employees or less. The town received a special allocation of funds provided by the U.S. Department of Housing and Urban Development under the CARES Act. 

The new norm for businesses could include being six feet apart and the use of protective dividers. Sean Hanley of LB Fabrication & Automation LLC., has begun making plexiglass social distancing dividers in an attempt to help his own business survive and also to allow any business to open up to full capacity. He has already installed dividers at Salon Blonde in Port Jeff, which is run by his wife. 

Many who first applied for the PPP loans after the initial April launch did not receive funds before the first set of $349 billion ran out by April 16.

Hanley’s Smithtown-based business was shut down following Governor Cuomo’s executive order. A good portion of its business comes from work on construction and other job sites where its metal fabricator and masonry services are sought after. 

“The clock starts ticking once the money hits your account.”

— James Luciano

He and his wife both missed out on the first round of the PPP loan applications but were able to get through in the second batch of applications. 

“We’re still waiting to hear back, but we would look at paying the rent first,” he said. 

Hanley is hoping the state will begin to relax restrictions so he and his wife can reopen their businesses and bring back their respective employees. 

While owners are anxious to reopen, there has yet to be any indication in what capacity businesses will be able operate. Social distancing guidelines will also play a factor. 

Luciano said it would not help his restaurant at all if he is potentially forced to reopen with significantly fewer customers. 

“We’re used to filling the place up, it would be hard for us with less capacity,” he said. 

In addition, Luciano expressed concerns on how social distancing could affect the day to day operation of the restaurant and impact the customer experience. 

“I think right now it is better to do the takeout services, we have been taking full advantage of the village’s delivery program,” he said. 

He said this is time when many businesses reap the benefits of increased foot traffic in the village and use funds to pay bills from the offseason in the winter. 

“We start to break even during May and in the summer is where we make a lot of our money, Luciano said. 

Close to two months into the pandemic, Ryba said they are still “early in the game}” and even as the crisis ultimately ends it could have wide-ranging effects. 

“There are a lot of difficult things that need to be sorted out, you could have millions of individuals who will be without a job,” the director of the business center said. 

U.S. Sen. Chuck Schumer said there is need to increase the PPP loan funding, but he and Republicans have disagreed how. File photo by Kevin Redding

The federal Small Business Administration announced the government’s Payment Protection Program, which initially put up $349 billion in funds for small businesses across the country, has run out of funding in just eight days since it came online.

Thousands of loans are still being processed, and both government and small business owners are calling for more funds to be added to the bill, which was meant to stimulate small businesses and help keep more from filing for unemployment.

Around 41,000 loans have been approved for New York State out of 1.7 million. However, many businesses were left short of approval or didn’t manage to file in time. Others, who filed early as possible, found their early attempts confused with both misinformation and lack of clarity from banks and federal agencies.

Bernie Ryba, the regional director of the Stony Brook Small Business Development Center , said during a live stream with the Rocky Point Sound Beach Chamber of Commerce April 16 there are growing signs of the economy deteriorating “faster than anticipated,” and the $2.2 trillion CARES Act, passed at the end of March, may not be enough.

He added banks have already been ordered to not accept any more applications.

“It demonstrates the extent of the damage small businesses have experienced over the past three weeks,” he said. 

Ryba said the SBA was not staffed to handle the number of applications. From acceptance of application to approval was going to be 30 days, but he said that number has gone out the window due to the incredible number of applications.

Some have also criticized who have been able to apply for loans, and how quickly they received it. Politico reported that a number of large chain restaurants ate up millions of dollars in loans meant for small businesses. Such chains as the companies behind Potbelly Sandwich Shop and Ruth’s Chris Steak House, each received $20 million and $10 million in loans respectively. While the loans were meant for companies with 500 or less employees, this rule was expanded to allow companies to apply as long as they didn’t have more than 500 employees in a single location.

While both Republicans and Democrats agree more funds need to be added, the parties are bickering back and forth about how much. The GOP has proposed an additional $250 billion to the PPP program, but Dems stymied that, arguing the bill, which U.S. Sen. Chuck Schumer (D) called CARE 3.5, should also include $100 billion for hospitals, $150 billion for state and local governments and a boost to food assistance. Republicans have blocked that effort in return.

Schumer, the senate minority leader, said in a live streamed conference with Long Island Association President and CEO Kevin Law April 17 that there could be two additional COVID-related bills in the near future.

Meanwhile, Ryba said his small business center, which also has offices in SUNY Farmingdale, will be receiving around $1.1 million in federal assistance so they can hire additional staff in order to handle a larger number of business owners looking for advice.

Law said the thing of biggest importance isn’t the long term of the whole U.S. economy, but making sure that these small businesses and average people have money in their pockets to deal with the short term. He also questioned whether the government may allow some different types of nonprofits to apply for aid through PPP, as currently only 501c3’s are applicable. Schumer said they would look into allowing 501c6’s and others to also apply for any further aid in the future.

Schumer agreed, saying the government’s focus should be twofold, adding the government needs to approve the PPP extension “so their money gets out there faster, it is job number one. Testing — if we don’t get it done we’re not going to recover. Those are the two biggest things.”

More from Schumer and Law’s Conversation

People are facing multiple hurdles during the ongoing coronavirus crisis, but Law said those people need help from the federal government.

With people’s $1,200 checks for people making under $75,000 a year finally going out, Schumer said that should not be the end of such funds to everyday Americans. He added he thought the wage limit should be raised to people making around $99,000 a year.

“If you have a wife who is a hospital worker, you’re making more than [the $75K] but you still need help,” he said.

In terms of mortgages, Law said while there was something being done for those with federally backed mortgages, he asked if there was anything being done for those with more locally or commercially backed mortgages.

“We need some kind of commercial forbearance for both commercial and tenants,” Schumer said. “I pushed for this in CARE 3.” (The bill called the CARES Act passed March 30.)

The LIRR is currently asking for an additional bailout, with ridership now down by 97 percent, but services are continuing for essential workers, especially those working in health care. Schumer said he wants to provide more assistance to both the LIRR and to the Suffolk and Nassau bus systems.

For other municipalities, he said bills he called CARE 4 and 5, the first of which he expected to come up in the first few weeks of May, will also include more money for townships who have also experienced revenue shortfalls from the coronavirus.

Law also suggested the federal government look into creating some kind of public works program in the vein of President Franklin Roosevelt’s post-Great Depression programs in the 1930s and 40s, specifically for public and infrastructure works such as roads, bridges and sewers. Schumer agreed with the idea for when things finally start to open up.

“We’re going to have to stimulate the economy, and the best way to do that is through infrastructure,” the senator said.