Small Businesses Struggle to Survive During the Coronavirus Crisis

For more than two decades, Sabrina Brennan’s company has made and installed signage and graphics at museums, tech companies and restaurants all over the Bay Area. Her business has survived past economic downturns, but the current coronavirus state of emergency seems much worse, she said.

“Business started out great this year and it just kind of tanked pretty suddenly,” said Brennan, adding that all the projects with her company, Digital Fusion Media, have been canceled. “I've never had anything like this happen in the 21-plus years since I've been in business.”

As the second week of the shelter-in-place orders continue in the Bay Area, thousands of businesses have temporarily closed or cut hours, leaving many jobless. While nearly all companies in the region are impacted by efforts to contain the coronavirus pandemic, it’s small operations that have been hit the hardest, say business leaders.

On Monday morning, Brennan, also a San Mateo County Harbor Commissioner who pushes for pay equity in surfing and other sports, tried to apply for unemployment insurance benefits for the first time in her life.

“We are definitely worried,” said Brennan, whose wife Aimee works at a small medical device company that provides both with health coverage. “That’s a huge concern right now. If her job goes away, we have to figure out what to do about health insurance.”

The number of jobless claims have surged in California and the trend is likely to continue. The state received 135,000 claims in a single day last week, said Gov. Gavin Newsom. That more than doubles the 58,200 jobless claims California processed during the whole second week of March, according to the California Employment Development Department.

“I don't know of a single business that is not impacted by the COVID-19 pandemic or the shelter-in-place orders,” said Matthew Mahood, president and CEO of the Silicon Valley Organization, a chamber of commerce with 1,200 business members.

Small businesses that don’t have the ability to work remotely depend on foot traffic, and many lack savings, putting them at particular risk of closing for good, said Mahood.

“They've already laid people off. They've already cut hours. Now we're getting to the point where small businesses that don't have more than 20 or 30 days of working capital are going to go out of business,” he said.

Officials in charge of helping workers and business owners in San Jose and San Francisco said they are unable to provide an estimate of the number of companies that have been forced to close or cut hours due to shelter-in-place orders. Oakland officials did not return requests for comment.

Ninety-seven percent of San Jose’s 45,430 businesses are considered small, while more than half of San Francisco’s 110,000 registered operations are small businesses, according to city economic development agencies.

“San Francisco is working around the clock to support our local businesses and workers as they face increasing economic pressures due to COVID-19," said Joaquín Torres, director of the San Francisco Office of Economic and Workforce Development.

San Francisco has funded paid sick leave and business grant programs to bring additional resources to neighborhood businesses and employees. Mayor London Breed also announced the “Give2SF COVID-19 Response and Recovery Fund,” which will support small businesses and employees that are struggling.

In Oakland Fruitvale’s neighborhood, Claudia Ruiz is trying hard not to panic about the long-term survival of her clothing and events planning business, Frydas International Design. Her store is considered non-essential by the shelter-in-place orders and must remain shuttered until at least April 7.

Although Ruiz is allowed to continue operating her money transfer side business, she has had to cut hours as most of her clients disappeared, she said. Last Saturday, she didn’t earn a single dollar, she added.

“If this continues a lot longer, it would be a death sentence for small businesses like mine that live day to day, that don’t have a financial cushion to last months,” said Ruiz.

Ruiz said she has not applied for unemployment benefits yet and has relied instead on help from her two adult daughters, whose jobs have not yet been affected.

As of Monday afternoon, the number of confirmed COVID-19 cases in California had ballooned to more than 2,100, including at least 40 deaths, according to the California Department of Public Health.

Ruiz and Brennan, the graphics company owner, want elected officials to intervene so that people who have lost significant income don’t have to pay mortgages, rents, utilities and property taxes for now.

The county of Santa Clara and San Francisco have approved temporary moratoriums on evictions for tenants who can’t make rent because of the coronavirus crisis. Oakland’s City Council is set to consider a similar measure later this week.

On Tuesday afternoon, Brennan had not been able to submit her online application for unemployment insurance benefits, she said, because the EDD’s website kept crashing.

“The EDD can confirm that there has been a huge spike in the number of claims coming in from impacted Californians,” said agency spokesman Barry White in an email. “The EDD is applying a variety of strategies to direct as many staff resources as possible to keep up with the increased claim load.”

Resources for Business Owners

• Resources from the City of Oakland
• Guidance and resources from the City of San Jose
• The Berkeley Relief Fund
• San Francisco Small Business Fund
• Pro bono business advisors and coaches at Pacific Community Ventures’ free BusinessAdvising.org
• Opportunity Fund microloans
• COVID-19 Updates for Small Businesses
• A list of banks offering relief to customers affected by the coronavirus.
• Small business guidance from the U.S. Small Business Administration — a federal agency dedicated to small business
• Facebook has funding available for small businesses
• UberEats has waived deliver fees for independent restaurants

Unemployment and Health Insurance

KQED's guide to filing for unemployment is available here. And if you've lost a job and no longer have health insurance, Covered California has opened a special enrollment period, which means you can still get health insurance.