Restaurants and bars were among the first and hardest hit businesses in the wake of the COVID-19 pandemic. To assist, a number of financial lifelines have been extended, including low-interest loans from federal, state and local governments.
Utah also allowed for the expedited refund for alcohol purchased through the Department of Alcoholic Beverage Control. But are they enough to sustain businesses through the pandemic?
In Utah, dine-in service has been shuttered for nearly two months. While some have managed to stay open by offering take-out service, others have been forced to close for the foreseeable future.
Dave Morris, who’s had to close all five of his bars in Salt Lake City and Ogden, opted not to return his alcohol and instead focused most of his energy on securing four payment protection loans and two disaster relief loans through the Small Business Association.
He said he applied the minute he could, but so far only three — through small, local banks — have been funded.
“The bigger banks just totally fell flat on their faces,” Morris said. “People with those banks didn't get any money.“
The rollout of the nearly $350 billion payment protection program has faced mounting criticism, both after it quickly ran out of money and for seemingly funnelling much of what was available to well-connected businesses, leaving smaller shops high and dry.
Morris said while he does have some funding now to work with, he faces ongoing uncertainty over making sure the loans will actually be forgiven. They should be, if used to keep employees on the payroll, but Morris said his banks have told him that there are still questions over how the loans work and how much will be eligible for forgiveness.
“It leaves you just hoping,” he said. “The spirit of this thing is that once you get funded, they want you to pay your employees for the next two months. And hopefully by then, you're reopened again. But it's really difficult for service industry frontline staff to pay this out, not knowing for sure if you're going to get that money back.”
The other challenge is that with the federal government adding $600 to every unemployment check, some of his employees are making more than they had while working. Some are “being paid up to $1,000 a week to sit home, not push a broom and not have to listen to me,” he said.
For Dean Pierose, who’s owned Cucina Italian restaurant in Salt Lake City for 25 years, the experience has been a challenge from the start.
“I remember sitting down with my general manager and there were tears because we knew the inevitable — furloughing people that are a big part of life,” Pierose said after hearing dine-in service would have to stop.
It has, however, gotten easier. Pierose said he wasn’t able to get the paycheck protection loan — though he was told he’d be first in line for the next round of funding — but he was granted a small Economic Injury Disaster Loan through the SBA and another from Salt Lake City.
“They’ve helped us make ends meet, but we’re luckier than most,” he said. “We’ve had a pretty steady revenue stream since the beginning.”
He said he owes that in large part to having long diversified his business, which includes existing catering and delivery operations in addition to take-out service. His chef has also gotten creative with preparing pizza and pasta kits that customers can make at home, which he said have been popular.
“We’ve been a lot of things for a long time,” he said. “I have friends in the restaurant business that have poked fun at me saying we’re almost like a food court, we have our hands in so many different things.”
Still, there is plenty of uncertainty ahead. While state officials have said restaurants may be allowed to open back up as soon as next month, neither Morris or Pierose are sure they could or would even want to open right away. Increased safety measures would likely need to be put in place — such as creating more distance between tables and asking staff to wear masks — threatening to fundamentally change the dine-in and bar experiences.
“We sell exactly the opposite of social distancing,” Morris said. “A social gathering of under 50 people is not going to pay my rent and utilities, so I'm not sure how it's going to work.”
Jon Reed is a reporter for KUER. Follow him on Twitter @reedathonjon
