Small businesses in Chico are struggling during COVID-19 pandemic

Local businesses are struggling amidst the COVID-19 pandemic and are unable to apply for federal aid to continue operations.

There are two programs in California developed for small businesses to obtain aid from the U.S Small Business Administration. 

The Paycheck Protection Program is a loan program developed in the Affordable Care Act as an incentive for small businesses to avoid cutting off production and laying off employees.

The PPP allocates $337 billion in loans and loan guarantees from the $2 trillion CARES Act to small businesses with less than 500 employees on payroll.

Payments for the loan will be fully forgivable if the funds are used for payroll, benefits and salaries, interest payments, rent and utilities. 

Loans provided by the Department of the Treasury during the COVID-19 pandemic will have some conditions that small businesses should consider before applying.

The loan is capped for small businesses based on their 2019 salary and is not forgivable if the payments are delinquent. 

“It would be expensive to afford employees if you apply for the loans,” manager of Franky’s Pizzeria and Lounge, Travis Huffman said. “I have the window at Franky’s open for takeout and delivery because we’re generating enough weekly income.”

Along with Frankys, Huffman is one of the managers of several popular Downtown Chico restaurants like Riley’s Bar and Grill, 5th Street Steakhouse and La Salle’s Restaurant and Cocktails.

The Economic Injury Disaster Loan is the second loan program available for small businesses. 

This program provides small businesses a $10,000 loan for those experiencing an unexplained loss of revenue during disasters.

Unlike the PPP, small businesses applying for the Economic Injury Disaster Loan are eligible for 100% forgiveness.

“I’m glad I got to work during these tough times,” Franky’s waitress and Chico State business major Athena Cerlani said. “If I didn’t work right now, I would have too much free time.” 

Small businesses can apply for the PPP loan and Economic Injury Disaster Loan at local lenders partnered with the government.

Marco Day can be reached at [email protected] or on Twitter @Sinauna_SD