From congratulations to fully cancelled

After more than a year of heavy losses at their two cafés in the San Francisco Bay Area, Amy and Chris Hillyard were relieved to get word in May that they’d been approved for a US$381,000 grant from the U.S. Small Business Administration.

The money was from a fund earmarked by Congress for restaurants hurt by the economic fallout from the coronavirus pandemic, like the Hillyards’ Farley’s SF and Farley’s East operations.

Equal to their losses last year, it would let the couple pay back debt, hire new employees, expand opening hours, replace a broken freezer, buy tables and chairs for outdoor dining and do all the other things Chris Hillyard says need to get done “to get back to normal and be ready for normal, come September,” when more workers might be expected to return to nearby office buildings.

Then, last month, the Hillyards learned they won’t get the money after all.

“We are back in a holding pattern” Chris Hillyard said. “It’s not a very fun place to be.”

Even after roughly $800 billion in aid from the federal Paycheck Protection Program (PPP) and nearly $30 billion more earmarked for hard-hit restaurants this year, small U.S. businesses face an uncertain outlook.

Many enterprises that were thriving before the pandemic are still hobbled.

At the same time, a widely predicted wave of bankruptcies has not materialized, with commercial bankruptcies in 2020 at their lowest level in five years and yearto-date filings lower still, according to data provider Epiq AACER.

Complicating the picture are regional discrepancies.

Some 35 per cent of San Francisco Bay Area establishments like those of the Hillyards still report a large negative impact from the pandemic and more than 41 per cent think it will take more than another six months to return to normal, a U.S. Census Bureau survey from mid-july shows. Meanwhile, in Atlanta, only 21 per cent and 31 per cent, respectively, of respondents reported the same concerns.

That suggests a genuine national recovery may be some ways off.

“The problem is for the economy, the pandemic has gone on longer than we thought, and it looks like different industries and different geographies have been affected very differently,” said Karen Dynan, an economics professor at Harvard University. “It’s just another reason that we are not going to see the economy go back to full employment overnight.”

Reuters has been following the Hillyards and their café since March 2020, when they laid off their entire staff after California shut down all “nonessential” businesses. They reopened six weeks later with a PPP loan, got through the summer with help from donors like Golden State Warriors basketball star Stephen Curry, and pulled through the winter viral surge and renewed government curbs on business with a second PPP loan.