South Bay Entrepreneurs vs. COVID-19

As soon as Joan Escover could, she applied for a Paycheck Protection Program loan from the U.S. Small Business Administration. And then the games began.

Escover is president of JP Graphics, Inc., a 21-year-old San Jose commercial-printing company with 40 employees. But with her revenues down 35-50 percent due to the coronavirus pandemic, Escover put in for a PPP loan that would provide 2.5 times her monthly payroll. 

Since applying, Escover says she has been reaching out to banks and the SBA while she’s awaited approval. Every day, she says, she asked the same questions: “‘Why? I did everything right... I did everything you guys asked us to do. How can you guys not respond fast enough?’”

When she spoke to California Local on April 30, Escover was a few days from having to make her third payroll without any help.

It’s all part of the unprecedented situation facing small businesses in Santa Clara County because of COVID-19—though resources for these businesses are becoming clearer and rays of hope are emerging.

An Impacted Pipeline

On one end of the spectrum of small businesses trying to get relief funds for COVID-19 are entrepreneurs like Escover, who can apply for things like PPP loans or the SBA’s Economic Injury Disaster Loan program. At the other end are the banks and other groups tasked with disbursing loans, such as Opportunity Fund, a Community Development Financial Institution based in San Jose.

The largest CDFI and non-profit small business lender in the country, Opportunity Fund gave approximately 3,000 loans totalling $117 million in the 2019 fiscal year, according to Caitlin McShane, a spokesperson for the organization.

Loan totals aren’t available since the beginning of the pandemic, though it’s safe to say interest is way up. McShane says her call center volume has increased in the past month from 300 to 400 calls a day to more than 1,500. The organization also received more than 1,000 online requests in the first two weeks of April.

Aside from giving loans, the fund has prioritized helping existing recipients, offering more than 800 businesses payment relief totaling a few million dollars since the beginning of the pandemic, McShane said.

Still, there have been some hiccups.

“The process has been tricky because everything has been tricky for so many people,” McShane said. “When you’re trying to help a client get their paperwork together, they’re also teaching their kid fifth grade.”

Even some of the traditional groups that help small businesses have had to get in line themselves. Matt Mahood, president and CEO of the Silicon Valley Organization, says the non-profit (formerly the San Jose Silicon Valley Chamber of Commerce) applied for an Economic Injury Disaster Loan on the second day the program was open.

“We know we’re going to get financially hammered over time,” Mahood said. “I don’t know if I’ll need the loan but I figured I’d better get in the queue and apply.”

Rays of Hope

Mahood said on April 30 that he’d yet to see an Economic Injury Disaster Loan. But he was encouraged since they come with a $10,000 grant.

“I’m pretty sure I’ve been approved for the loan because they ran a credit check on me and they deposited a $10,000 credit in my bank account,” Mahood said. “But I haven’t received any paperwork from the SBA or talked to them about a loan amount yet.”

Escover finally got through to a sympathetic bank employee on April 29.

“This guy was nice enough,” she says. “He could hear it in my voice and just said, ‘You need to have the bank call this number with your application stuff.’ That’s what I had gotten out of them yesterday. And this morning, I got word that I’ve been approved again. The DocuSign is supposed to come over but I haven’t gotten it.”

Escover, who hasn’t had to lay off any employees yet, has been trying to use her time wisely while she navigates the economic uncertainties. It’s been frustrating to her to deal with the government. Still, she’s stayed motivated to move forward.

“For me,” she says, “failure’s not an option.”