Loan or Debt?

I am writing to express my deep concern that loans are the only real solution/lifeline currently being offered to local small businesses. As a recipient of an SBA EIDL loan after the Thomas Fire/Mudslides for C’est Cheese, we can attest that it is an incredibly valuable resource that helped us tremendously in the aftermath of those disasters. However, given the scale of this event and the resulting challenges that our local small business community will be facing, I am writing to express my sincere hope that borrowing more money and getting into more debt will not be the only solution offered to local small business. I strongly believe that in order for our business community to weather this catastrophe that additional, locally driven, relief efforts will be required.

Having gone through the process to get an SBA EIDL loan after the Thomas Fire/Mudslides, we can tell you firsthand that they require a lot of effort and time to attain. We had to apply twice and did not receive funds until eight months after the Mudslides. This timing was not entirely the fault of the SBA; we were also partially to blame being a little overwhelmed at the time, but it doesn’t change the fact that the process takes time in the form of months, not weeks.

 Furthermore, the formula that they use to calculate the amount they are able to lend can differ from the amount that is truly needed to stay in business or re-open a business. As an example, it was determined that since we closed our cafe, that they would not take the cafe revenue losses into account in deciding how much to lend us to help the remaining businesses. At the time of its closing, our cafe alone (separate from our catering business and cheese shop) was generating just over $1 million a year in gross revenue. We tried to insist that since we were still paying a good portion of the rent and are paying a massive loan on that part of the business that at least a portion of the cafe revenue should be considered. However, their final calculation did not include that revenue, and we received one third of the amount of our actual losses.

Lastly, I am concerned that unless a lot of their process is altered for this current event, the influx of applications they will be receiving will also make them an insufficient resource. SBA EIDL loans need to be one of many tools that will eventually help small business recover from this crisis, but they will not be the solution for a great many. A local grant fund of some sort must be set up for those businesses who will not qualify for the SBA EIDL loans or to bridge the time gap before those that do qualify actually receive any money. I truly believe that the only way we are going to get through this is by acting on the local level. It is going to require the local community coming together to save their own local small businesses if they want anywhere to shop, eat or gather again when this is all over. We are not going to be able to rely on or wait for the state and federal governments to provide all the help we need.

I am asking the city, on behalf of all Santa Barbara small businesses to please create a Small Business Emergency Grant Fund that the local community can donate to in conjunction with whatever help or funds that the city can provide. And I would also request that an experienced, trustworthy, nimble and locally based organization, such as Women’s Economic Ventures, be given the resources to administrate such a program.


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