Businesses across the country are suffering the financial effects of the coronavirus pandemic but businesses on the Kenai Peninsula are dealing with a couple of extra doses of insult to injury.
Timing of the economic shutdown could not be worse for fishing, lodging and other tourism-season businesses. On top of that, businesses from Cooper Landing through the western peninsula already took a hit last year from disruptions due to the Swan Like Fire.
Cliff Cochran, director of the Kenai Peninsula Small Business Development Center, on K-Beach Road, says he’s been getting a lot of anxious calls from businesses wanting some sort of crystal ball. He says the best research he’s seen shows it takes six to eight months following a pandemic for travel and spending to return to normal. That’s not an answer any seasonal business wants to hear.
“Folks I’ve talked to the number of cancelations they’ve received is just astronomical. Obviously, we need the revenues from June, July and August to make it through September to May this winter. So if this summer is gone, it impacts not just the next six months but the next 15,” Cochran said.
It’s no wonder the Kenai Peninsula SBDC is seeing more traffic than other areas of the state.
“On the peninsula, we noticed that we’ve had the greatest number of applications in the last couple weeks. I think I had 80 folks go back and forth with me the last few weeks, And then Anchorage had something like 38, 40. So we’ve stayed really, really busy,” Cochran said.
These days, Cochran’s job as a business advisor is more like crisis counseling, helping people navigate the various financial assistance programs being offered by the federal government.
“I’ve been actually pretty impressed with the business owners and entrepreneurs on the peninsula who are pretty tough in the face of a pretty nasty situation. So taking this and then adding the Swan Lake Fire from last summer, this is a pretty tough time doing business on the peninsula but everyone seems to be hanging in there and doing well. I think these programs have certainly eased a lot of minds about what could be happening in the future,” he said.
SBDC advising is free, though you do need to sign up as a client. Cochran can provide information on the Small Business Administration loans and other options available. The biggest one most people are interested in is Economic Injury Disaster Loans.
“The EIDL application process is very simple, it takes about 10 to15 minutes if you have that information in front of you. And it provides loans up to $2 million with a term over 30 years at 3.75 percent interest, so it’s a fantastic opportunity to help your business get through this next expected downturn,” Cochran said.
There’s a cash advance option of up to $10,000, depending on how many employees you have. There are also bridge loans for up to $25,000, though the wait time is longer and the interest rate isn’t as good.
The other big one is the Paycheck Protection Program, which can be a forgivable grant if certain conditions are met. Those applications need to go through an SBA-approved lender and not all Kenai Peninsula Banks are participating. Alaska USA, First National Bank, Key Bank, Northrim and Wells Fargo are approved lenders, though Wells Fargo nationwide is not taking any more applications for this program. If you’re not a customer with one of those banks, Cochran says you can try to submit through Bank of America or Intuit.
“There’s been a lot of confusion and I think even the lenders are still trying to figure out how this program works. Some of the guidance coming down from the government had been somewhat vague, so everyone’s trying to wrap their brains around who’s even eligible,” he said.
That’s not to say the SBA loans are without their challenges. Alaska was behind most of the rest of the country in being approved for the program. The first week Alaskans could apply, after March 21, the online system crashed. SBA recommended everyone reapply using a second system, released March 26.
“That process also crashed. And so on March 30, the SBA released a new secure online application that’s been working great since then,” Cochran said.
Even more frustrating, SBA doesn’t provide a confirmation number or email to show that your application went through.
Cochran says anyone who submitted an application before March 30 should re-submit to be safe. And he says he’s here to help. It’s taking him a day or two get to get through all his emails and get back to people but in the meantime, there’s a lot of information on COVID-19 disaster assistance programs available at aksbdc.org/covid19.
Today’s number is 15,370. That’s the number of unemployment filings in Alaska in the week ending April 4. That’s about a thousand more than the week before, and about three times higher than Alaska’s previous weekly record.
