The 1st Of The Month Means Bills Are Due, Even For Coronavirus-Slowed Businesses
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Just like many people, small-business owners often send a lot of money out of the door on the first of the month - for rent, for insurance, for payroll. As NPR's Danielle Kurtzleben reports, today was a lot more stressful than usual.
DANIELLE KURTZLEBEN, BYLINE: Mary Domito has been in retail for 40 years, and she's never seen anything like this economic crisis.
MARY DOMITO: With the 2008, we just dialed it back. I reduced all my costs. And we still got through it and finished in the black. This is so unknown because we just turned off the spigot. We literally turned off the switch.
KURTZLEBEN: Domito runs a furniture business called Mattress Mary's and has three stores in New Mexico and Colorado. She closed all of them two weeks ago. And with the first of the month approaching, she had to inform creditors that she wouldn't be able to pay on time.
DOMITO: I've done everything we can do - calling all our vendors, calling all our creditors, right down to Blue Cross Blue Shield.
KURTZLEBEN: Plenty of small businesses have been making similar calls. New laws will also help some owners like Ken Berry. He owns an acupuncture pain clinic in Sacramento and spoke to NPR via Skype.
KEN BERRY: I'm in a lucky spot right now here in the city of Sacramento. The city council here just last week passed an ordinance that is a business and eviction moratorium.
KURTZLEBEN: Small businesses often have less financial padding than their bigger counterparts. Berry says he likes to keep a two-month buffer.
BERRY: But due to some other circumstances, I already had a slow month in February and had to tap into that. So even though I was gearing up to prepare for those rainy days, this one hit a lot faster than I expected.
KURTZLEBEN: Small businesses could suffer greatly during this crisis. Michael Roth is managing partner at Next Street, which works with local governments on small-business policy. He says without assistance and with businesses on continued lockdown, many would close.
MICHAEL ROTH: We project that 25% of small businesses will be out of business within 30 days, and 50% - more than 50% will be out of business within 90 days.
KURTZLEBEN: But again, that's without assistance. On Friday, a $350 billion small-business loan program created in the recent economic relief bill will start up. Domito says she plans on applying for a loan. For now, she says her creditors are being understanding and that Mattress Mary's is hanging on for another month.
DOMITO: So all my creditors, from my insurance company to health insurance to vendors to landlords, have at least given us some deferments, at least till the end of April.
KURTZLEBEN: And that makes a lot of sense to her.
DOMITO: They realize if I go under, how hard is it going to be for them to rent the space? So yeah, they kind of need to defer because as my mom used to say, you cannot squeeze blood from a turnip.
KURTZLEBEN: Danielle Kurtzleben, NPR News.
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