Counterpoint Records & Books, serving the Hollywood Hills since 1980, is in danger of closing its doors for good.
Normally this wouldn’t count as news outside of the store’s Beachwood Canyon area. But millions of family businesses have gone extinct across the country to fight the spread of the new coronavirus. Many are just as scared as Susan Polifronio, co-owner of Counterpoint Records & Books. With no customers or income, with bills still to pay and debts piling up, the possibility grows every day that many may not be able to reopen.
The federal government was supposed to help, but its $ 349 billion small business loan program ran out within days, with some of the money going to big businesses that include national restaurants and at least one. coal mining company. Millions of small businesses that have applied for loans have yet to see money, according to the National Federation of Independent Businesses, which surveyed its members Friday and found that 80% were still waiting for federal aid.
the Senate approved another round of funding of $ 484 billion on Tuesday, and the House of Representatives must vote on it by the end of the week. President Trump has said he will sign the law. It is not yet clear whether large businesses will continue to qualify for small business loans at the expense of mom and dad.
Polifronio, 68, applied for an emergency grant of $ 10,000 in March, which was due in three days; a payment of $ 1,200 for each of its four employees; and, on April 8, a repayable loan from Bank of America’s Paycheck Protection Program, all to survive the shutdown until customers can return. She heard from the bank on Tuesday, asking for more business documents.
“We haven’t got anything yet and we’re eligible for everything,” she said.
Polifronio hopes to have better luck with the new round, but is unsure whether she will have to start the laborious application process again.
Its store manager, David Jones, said the uncertainty was taking its toll. “We don’t know if we’ll get the loan” to deal with the payroll, he said. “We don’t know if we should step aside and collect unemployment. We don’t know when we will be able to open. It’s unknown and changes every day, and it makes planning impossible.
Forty years ago, Polifronio and her husband, John, opened Counterpoint Records & Books in what was then a comfortable and affordable neighborhood, located below the famous Hollywood sign. The store sold second-hand vinyl records and books, including rare collectibles. In recent years he has added new vinyls as this retro technology has made a comeback.
“We’ve served a lot of artists, musicians, people in the film industry – mostly on the camera side rather than the actor side,” she said. “We stayed open until midnight – people came in after they finished the concerts. “
The couple survived the boom of the Internet and Amazon by narrowing their offerings to the tastes of niche neighborhoods. Profit margins have always been slim, but they’ve managed the place with caution. “We had times where we had to withdraw from our personal savings, especially since the economy collapsed in 2007,” Polifronio said. “But we generally never had to go too far.”
She still pays three of her employees (the fourth took another job) even though the store is closed, using a bank line of credit, which carries an interest rate of 7%. It means accumulating debt plus interest.
“My mortgage is on hold, but I have to pay it off after three months,” she said. She provides health insurance for employees, “and Kaiser allows me not to pay right now, but after three months I’ll have to find that as well.” “
She is particularly troubled by reports that restaurant chains such as Ruth Chris Steakhouse, Shake Shack and Potbelly have taken out millions in paycheck protection program small business loans, which are guaranteed by the government at rates low interest and in many cases are forgivable, making them more like grants.
Loans are said to be limited to businesses with 500 or fewer employees. But a loophole in the law allowed companies to count the number of workers in each physical location, allowing chain stores and restaurants to qualify. (Shake Shack said he would come back $ 10 million in such loans.) Another provision of the law makes exceptions for coal companies which employ up to 1,500 workers.
According to the National Federation of Independent Businesses, most small businesses do not approach the 500 employees. “The vast majority of businesses defined as small businesses are actually very small – less than 50 employees,” said Holly Ward, NFIB executive.
“When they say the small business has 500 or less, that’s ridiculous,” Polifronio said. “Why don’t they have something for 20 people or less? They are very different businesses. “
Large businesses have “strong relationships with the dedicated employees at their banks who know how to handle these kinds of situations, while many small business owners cannot call anyone on the phone to answer application questions let alone keep up. hand throughout the process, ”says Ward of the NFIB.
After the Senate bill passed on Tuesday, the NFIB issued a statement that called it “good news for American small businesses” because “it contains much needed funding.” The group, he said, looks forward to “working with Congress and the administration to address some of the significant challenges that small businesses have faced with the program.”
Amanda Ballantyne, executive director of the Main Street Alliance’s small business policy group, issued a statement that the new legislation still suffers from “design flaws.” Among the group’s recommendations: a subsidy program for companies with less than 50 employees; more flexibility on how the money is used to qualify for a rebate; and more transparency about who gets loans and for how much.
Next to Counterpoint Records & Books on Franklin Avenue, Dean Chamberlain and his wife, Cynthia Kaschak-Chamberlain, own clothing store The Canyon, which sells new and vintage clothing inspired by the 1970s. The store’s unofficial slogan is ” be cool, be yourself, dig where you are, “said Chamberlain, 67, a self-proclaimed” old hippie “.
Chamberlain applied for a $ 10,000 SBA Disaster Grant offered under the program. He said $ 4,000 appeared in his bank account a few days ago, courtesy of the SBA, but without explaining why he had not received the full amount.
“There are people who are upset about this or panicked” about the disorganization and poor communication in the rescue programs, he said, but “I have more patience. We have never faced this before. I don’t expect the feds to have it totally together. They are people too. What pisses me off is hearing that restaurant chains and multi-multi-multi-million dollar businesses are siphoning off business loans.
He fears Beachwood Canyon will lose what is left of its character if small independent businesses go bankrupt and more chain stores and franchises take hold.
“This neighborhood in particular has fought to keep these franchises out,” he said. He hopes local clients will participate to keep the independents alive.
After COVID-19, “the sense of neighborhood will become more important,” he said. “We cannot be as mobile as we want. The sense of community will be amplified.