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Borrowed Dime

There’s a general rule of thumb when shopping for cheese: Estimate that each of your guests will consume about a quarter pound of cheese in total, and buy accordingly (the arbiters of this rule have clearly never visited our office). This ensures that everyone gets at least a taste of each type of cheese, and you don’t end up with leftovers. This neat and tidy equation typically works.

The American Small Business Administration presumably made a similar assumption when it opened enrollment for Paycheck Protection and Economic Injury Disaster loans amid the COVID-19 crisis. Small businesses—those with fewer than 500 employees—have been hit particularly hard amid quarantine restrictions, and many have had to lay off staff and close their doors until further notice. Businesses considered non-essential have incurred the biggest losses, their owners unsure whether they can come back at all once restrictions are lifted. As a result, the SBA has been inundated with applications, and has had to turn down a devastating number of applicants due to lack of funds. 

The SBA’s Economic Injury Disaster Loan (EIDL) aims to provide an advance of up to $10,000 to businesses whose revenue has been severely affected by the pandemic. Private non-profits and veterans’ organizations are also eligible. Paycheck Protection Program (PPP) loans will cover payroll and other basic expenses, and all will be forgiven if employees stay employed for at least eight weeks. Otherwise, payment will be deferred for six months.

The SBA assures that loans will be made available within days of application approval, and though that’s an encouraging promise, the reality is disappointing. As of April 23, both PPP and EID loan applications had been paused, as funds had already been exhausted (update: PPP applications are back open!). Beth Falk, President of the Massachusetts Cheese Guild and owner of Mill City Cheesemongers in Lowell, Massachusetts, can attest to this frustration personally.

Falk applied for an EIDL as soon as the SBA announced open enrollment, though she received an advance far below the $10,000 promised, with no loan in sight. Her first attempt at submitting a PPP application was foiled by an overwhelmed server, as was her attempt to apply for a grant via the US Chamber of Commerce. By the time she was able to access both portals, funds had already evaporated. Falk’s story is an all-too-common one among small business owners. 

Though she’s applied for a few additional small business grants, she doesn’t anticipate any follow-through. 

“I don’t plan to apply for any private loans,” she says. “I am not comfortable incurring additional debt, especially as a single-member LLC. The risk to my family’s finances is too high given the uncertainty of the shop’s future.” Mill City Cheesemongers, located in a restored textile mill alongside other small specialty shops, has closed its doors and moved all sales online. Falk has had to lay off her entire staff, and fulfills orders single-handedly, earning no salary. 

“We’re lucky to have a community of regular customers who are making a conscious choice to support the shop through online orders, and friends from afar have ordered cheese for shipping,” she says. Still, revenue is down roughly 70 percent.

If granted, Falk would have used her PPP funds to bring back at least one employee and to cover some basic operating costs, which would free up some money to purchase product from struggling artisan makers. Online sales are helping to defray non-negotiables such as insurance premiums and license fees, but Falk isn’t sure how sustainable the current model is. “Those orders have helped us bring in about 30 percent of our usual gross revenue, but with significantly higher costs for packing, shipping, and processing orders,” she says. “But I don’t expect we can continue at this level much longer than another month or two.” 

On the flip side of this cluster is Tina Mooney, owner of The Fox and the Crow in Fort Collins, Colorado. Her shop is one of the lucky ones. Mooney was granted both an EIDL and a PPP loan, and will be able to reopen for curbside pick-up on May 1st with eight full-time employees. But there’s a looming caveat.

“I worry that when the PPP runs out eight weeks after the disbursement, I’ll have to furlough again if restaurants aren’t fully opened,” she says. “My employees are acutely aware of this catch-22. We are ready to take that chance.” 

Mooney says being unable to bring in new product during lockdown filled her with guilt and a sense of helplessness as she watched independent makers struggle. When The Fox and the Crow reopens its doors, Mooney has pledged to fill her shelves and cases with strictly American products whose makers are most in need of support. “We alone won’t be able to save the industry,” she says, “but I hope we will be able to keep them afloat until restaurants can reopen.” 

Back in Massachusetts, Falk has turned her own shop’s struggle into a chance to highlight someone else’s. She started a GoFundMe campaign initially to help defray her shop’s costs, but it quickly morphed into a call to support New England cheesemakers.I made [that decision] to educate people about local cheesemakers and get food to people who need it,” she says. “I’m most concerned about how small cheesemakers will suffer in this economy, and to the extent that we can continue to be part of the supply chain for their products, I’d like to do that.” So far, all $2,700 (and counting!) raised as part of Falk’s campaign have gone toward purchasing cheese to donate to local food banks. 

There’s no gentle way to say it: most Americans have never seen anything like this before. We won’t know the complete economic consequences of COVID-19 until we’re living them. With minimal preparatory measures in place, the best defense we have are temporary Band-Aid solutions that address a fraction of a larger issue. But despite the dark clouds hovering over all corners of the dairy industry, makers and mongers alike look toward the same bright spots. 

“I’m so heartened by the support people in the industry are trying to offer each other,” Falk says. “It doesn’t happen everywhere, and we’re lucky to have each other.”

Margaret Leahy

Margaret Leahy is a Contributing Editor at culture.

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