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Jackie Victor, founder and owner of Avalon International Breads, would appear on the surface to be doing well, in the all-pandemic-things-considered sense of the word. Although all but one of her 135 employees are laid off, they have pandemic stimulus checks and unemployment to tide them over. And Avalon recently learned it will receive a Paycheck Protection Program loan, meant to help small-business owners weather the storm.
Avalon CEO Jackie Victor chats with Bedrock's Dan Mullen back when this was safe. (Photo: Deadline Detroit)
Sounds like Victor is lucky, and she admits she is. But in a New York Times op-ed, she writes that it's not as simple as all that:
... having received a coveted loan, we prepared to reopen. Our revenue stream is limited to grocery store delivery, which accounts for approximately 25 percent of our business. Still, our payroll, rent and utilities are covered. We are an essential business. It should be easy to reopen, right?
It’s not.
Besides the fact those 134 employees are still dealing with the fallout of the pandemic -- child care, transportation, never mind those who actually had or have the illness, or have buried family members -- there's this other thing:
It’s difficult to successfully use the Paycheck Protection Program loan. The hurdles are high. Besides rent and utilities, the loan is meant to be spent on payroll within 60 days. If employers reach the same number of employees by the end of the period, then the amount spent on pay is forgiven. Any unforgiven portion turns into a loan to be paid back fully in 18 months. Even if we do manage to hire 135 employees and pay them for the next 60 days, it will be impossible for us to retain those employees while revenue is down 50 to 80 percent. In an economy with over 26 million people unemployed, consumer demand will be severely reduced.
Victor suggests the strict rules around the funding be relaxed to allow individual business owners to spend it on their unique situations -- on unpaid bills, for instance.
Judging from the echoes from other small-business owners who posted the piece on their own social media, her complaints are not alone. "Our customers don't understand how complex and inadequate our so-called 'bailout' has been," wrote Rachel Lutz, owner of the Peacock Room, Yama and Frida boutiques in Detroit, on her personal Facebook page.
