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Small business owners are dipping into their personal savings to stay afloat
Aug 6, 2020, 11:19 AM
FILE - In this July 13, 2020, file photo a For Rent sign hangs on a closed shop during the coronavirus pandemic in Miami Beach, Fla. Some small business owners say they have had to dip into their personal savings to stay in business. (AP Photo/Lynne Sladky, File)
(AP Photo/Lynne Sladky, File)
SALT LAKE CITY — A recent survey from CreditCards.com found 35% of small business owners are using personal money to stay afloat during the coronavirus pandemic.
Around 70% of businesses are also using government aid like the Paycheck Protection Program (PPP). But many say it’s not enough and they’re in danger of hurting their financial futures.
Michelle Francis, Senior Tax Manager with Eide Bailly in Salt Lake City, says almost all of her clients received money from the PPP, but those funds are now exhausted.
“They’re looking at a second round of layoffs after they laid off employees when the pandemic first shut down their businesses,” Francis said. “Many business owners are now mortgaging their residences in order to stay open and pay employees.”
And with the $600 federal government unemployment bonus expired, many workers face an uncertain financial future.
Julie Smith, owner of Get Away Today, said they had sixty employees before COVID-19. They kept many of them with the help of a PPP loan, but now the funds are gone.
“We’re down to twenty staff members, and paying them out of our personal funds,” Smith said.
Jennifer Dunyan, the Executive Vice President of Get Away Today, described what happened to her business as a “triple-whammy.”
“We primarily book vacations to Disneyland in Southern California, which is still closed. And we also book cruises,” Dunyan said.
“The first month the pandemic hit was extremely busy,” said Smith. “Many employees were working overtime to get people back home or cancel future trips.”
But now the travel side of their business is at a crawl. As a result, Smith and Dunyon said they’ve branched out into other industries.
“Our CEO said ‘this isn’t the time to start a new business,'” Dunyon continued, “but it’s the perfect time, because what else can we do to stay open?”
Get Away Today is branching out into face masks with Disney themes and also a health care drink. Dunyon said they are seeing revenue from the projects, but Smith and her husband had to dip into personal savings to launch them.
Francis stated many of her clients are in the same boat. They are looking at other areas to make money, dipping into their personal funds, or looking at closing up shop for good.
