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Bronzeville, Near South Side

Chicago Small Business Resiliency Fund Will Help Only A Fraction Of Businesses In Need

More than 8,000 Chicago business owners need the government's help to survive the COVID-19 pandemic. But the city can only help about 2,600 of them, numbers show.

Janell Richmond of Eméché Cakery & Cafe in Bronzeville.
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BRONZEVILLE — When Chicago native Janell Richmond opened Emeche Cakery in Bronzeville she filled a huge need in a South Side neighborhood that has long lacked access to healthy food. 

But opening came at a cost: she sunk $90,000 of her own money into the business. Now, because of the COVID-19 pandemic, she is struggling to make ends meet.

While she received a small emergency loan from the federal government, Richmond said she needs more help in order to survive. She also applied for the Chicago Small Business Resiliency Fund, a $100 million fund offering emergency loans up to $50,000.

“Filling out applications takes time, it’s not like you’re going to fill out the applications today and get the funds tomorrow,” Richmond said. “So how do I survive in the interim?”

Since the city announced the Resiliency Fund on March 31, 124 loans have been approved, averaging about $38,000 each.

At an average of $38,000 per loan, the city could conceivably help 2,631 businesses.

But that represents a fraction of the need. As of Monday, more than 8,000 applications were in the queue. The deadline for the program is Friday.

This city fund was designed not to be a primary life vest, but to instead supplement federal aid, city officials said this week. But the federal aid programs have been riddled with issues, business owners said.

Anita Monteggia, owner of Taglia i Capelli Salon and Boutique in Lincoln Park, applied for the city fund but does not yet know if she’ll get it. And cash flow is key — her landlord can’t give her a break on her rent and she owes $1,200 to her health insurance premiums. 

As a hair stylist, she can neither work from home nor sell her product via Uber Eats. 

“I survived so many things being 30 years in business,” she said. “We’ve gone through so many declines in the economy. I see it in my clients, stretching out hair cuts to save money. … As of right now we don’t even know if we’re opening May 1.” 

Credit: Sheet Petal Press / Provided
Shayna Norwood, owner of Sheet Petal Press, received a PPP loan from the federal government.

More need than funds to give 

The $100 million Chicago Small Business Resiliency Fund was created to provide the city’s small business owners emergency cash during the COVID-19 pandemic. Loans can total up to $50,000.

The deadline for applications is Friday. (Apply here. Submit questions to the city here.) 

The city wants to make sure the fund helps diverse applicants.

Of the 124 loans that have been approved, two-thirds have gone to diverse business owners: 44 percent to women-owned businesses and 41 percent to Black or Hispanic-owned businesses.

Isaac Reichman, spokesman for the city’s Business Affairs and Consumer Protection office, stressed that the city fund was designed to supplement federal relief programs.

Credit: Chicago Treasurer’s Office / Provided

Mayor Lori Lightfoot said during a Wednesday press conference the city fund aims to help those left out of federal programs, including business owners who are either unbanked or bank with small banks, or are undocumented immigrants.

“Unlike what we’ve seen at the federal level, our fund still has money and still is available for small business owners,” she said. “We are filling a niche that isn’t going to be covered by the federal government.”

But who will be “covered by the federal government” has been the source of great controversy and panic among Chicago business owners.

One federal program, the $17 billion Economic Injury Disaster Loan program, has disproportionately excluded Illinois businesses, Crains reported.

Another program, the nearly $350 billion Payment Protection Program, ran out of money last week after padding the pockets of corporations while leaving many Chicago mom and pop business owners with nothing.

RELATED: Chicago Small Businesses Shut Out Of Federal Government’s Loan Program: ‘We Don’t Matter To Them’

This week the Senate did pass a new $484 billion aid package, promising to use $322 billion to replenish the PPP program, NPR reported. With so many business owners just a few days or weeks away from calamity, however, many will be left behind.

Speaking on the condition of anonymity for fear of losing his job, a Chicago-based banker told Block Club the federal PPP program has not been in small business owners’ favor.

Of the 70,000 applications his bank has received, the banker said two-thirds have arrived incomplete.

“The government is really at fault for this,” he said. “They said, ‘hurry and apply.’ What they should have said was, ‘Really review the application, ensure you meet requirements.’ … [Reviewing applications] conceivably takes five minutes. Most applications are taking 45-50 minutes to review because of all this.”

‘We don’t know when anyone will be out of the woods’

A handful of Chicago business owners who applied to the city’s Resiliency Fund have described the process as confusing and vague.

Dave Crain, owner of Dave’s Records in Lincoln Park, applied for the Fund at 9:30 a.m. on April 1. Immediately after submitting the online application, the site indicated the city had “perfect lender” for Crain, and that he’d hear more in “one to three days.”

After weeks of following up by email, however, Crain has not received a loan.

“I was surprised to see the process is still open and they’re taking applications through the 24th,” he said. “I haven’t heard anything and I applied April 1. … If they aren’t considering me, I’d like to know that, too.”

Naomi Levine, owner of West Town bakery and event venue TipsySpace, said she’s yet to hear a response after applying three different times. 

Shayna Norwood, the owner of Logan Square’s Sheet Petal Press and the recipient of federal PPP funding, applied to the city fund two weeks ago. Monteggia, the Lincoln Park hair salon owner, applied for the funds last week. 

On Saturday, at the same time, both women received the exact same email, verbatim, from the city: “Based on the date of your application and the equity criteria, there are currently 3,000 to 4,000 applications ahead of you at this point.” 

“Those numbers sound a little bit predictable,” Monteggia said. “How sad is that.” 

Reichman said all applicants should have received an update email last week.

“We understand that this is an incredibly difficult time for business owners and we appreciate their patience as we work through the incredible demand for this newly-created and first-of-its-kind program,” he said. 

Laura Yepez, the owner of Wicker Park Inn, a nine-room boutique bed and breakfast, is one of the 124 recipients of the Resiliency Fund loans.

She also received a federal small business loan. These aid packages mean Yepez can stop paying her mortgage and payroll via her personal savings — but it doesn’t mean she’s out of the woods.

The hospitality industry as a whole faces a tough summer without graduations, festivals and concerts, she said.

“We don’t know when anyone will be out of the woods,” she said. “Really look into where you’re spending your money. Are you spending it with an independent small business? If you are, thank you. From the bottom of my heart. … I do know there’s gonna be some that don’t survive.”  

Credit: Wicker Park Inn / Facebook / Provided

Levine, an Australian-American and the owner of TipsySpace in West Town, said she’s given up on the promise of government aid.

Instead, she’s relying on help from customers who have showed up in droves to order COVID-19-inspired toilet paper cakes and face mask cookies. Her landlord refuses to lower her rent, she said.

Richmond, a Chicago native and the owner of Emeche Cakery in Bronzeville, started a GoFundMe campaign.

As long as her landlord and creditors continue to work with her, she said she feels optimistic she can “ride it out.” Customers have also rallied, as her cafe is one of few in Bronzeville.

“The community has been so supportive,” she said. “They’re determined to not have us close because where we are, there’s really no coffee shops.”

Block Club Chicago’s coronavirus coverage is free for all readers. Block Club is an independent, 501(c)(3), journalist-run newsroom.

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