As businesses across South Dakota return to normal, many are still depending on the money they received from the Governor’s $10.5 million Small Business Relief fund to continue operations.
“I’ll never forget it because it was the day after St. Patrick’s Day for us,” McNally’s Irish Pub General Manager Nikki Ellerbroek said.
The pandemic closures and cancellations hit just ahead of McNally’s biggest weekend of the year.
“We look at the parade and St. Patrick’s Day as our Black Friday, that’s the sales bump that gets us through the summer. So when that’s taken away, it creates a perfect storm of a lot of bills that need to be paid, with the sales that don’t back it up,” Ellerbroek said.
“We’re down about 50 percent, so a lot of lost revenue that I don’t think we’ll make up,” You’ve Been Framed owner Tamara Dettler said.
Dettler is facing similar struggles with her retail store because of lost sales.
“There was a lot of fear, but we showed up everyday, I kept two girls on staff, we knew we needed to pivot our business and work really hard on our website,” Dettler said.
The Governor’s Office of Economic Development knew many South Dakota businesses would be dealing with bills and expenses piling up during the COVID-19 closures, so it created the relief fund. The legislature approved it on Veto Day in March.
“Really the goal was to keep these business operating, because again, they don’t have a reserve sometimes built up, so if they couldn’t pay their employees or their mortgage or their light bill, they were going to go out of business,” Economic Development Finance Director Cassie Stoeser said.
Stoeser says they pulled the $10.5 million of state funds from other economic development programs.
“We allowed these funds to be used for any type of working capital, anything that would allow the business to continue operations,” Stoeser said.
For most businesses, these state loans were in addition to the federal Payroll Protection Program as a way to cover other expenses the PPP did not cover.
“We had a store full of lovely items that we had to pay for without a sustainable income coming into our store,” Dettler said.
Dettler said the governor’s loan kept her in business.
“It was huge. It just allowed me to keep my doors open and pay some of my vendors,” Dettler said.
Ellerbroek also ended up using a good portion of the state’s loan to help pay for products at her restaurant, including thousands of dollars of food they weren’t able to sell during the shutdown.
“They processed those loans very quickly and that gave us the opportunity to get those invoices paid from St. Patrick’s day and before the shutdown,” Ellerbroek said.
“There were 200 loans approved but we had applications upwards of 400. So you can see that the demand for this program was far exceeding what we had available for funds and really the loans went all over the state,” Stoeser said.
The loans ranged from $5,000 to $75,000 to any business with 250 employees or less, all interest free.
“This is a true loan that does need to be repaid,” Stoeser said.
“Long term, just adding more loans doesn’t necessarily help your business model,” Ellerbroek said.
While Ellerbroek said the governor’s loan saved her restaurant in the short term, she is still very concerned about the future.
“I’m ok right now, but next month, I don’t know. It’s all up in the air because operating the way we are right now, you know we won’t be able to keep our doors open if people aren’t here,” Ellerbroek said.
Even though local, state and national leaders have allowed businesses to re-open at full capacity, Ellerbroek says it’s still far from business as usual.
“It’s more of a question of when will people feel comfortable in large crowds and nobody really has that answer unfortunately,” Ellerbroek said.
“Business is improving everyday and people are shopping again, feeling a little more comfortable coming in,” Dettler said.
“I really enjoy that we have all of these small businesses and I work for a small business and I really try to support the small businesses in town,” Shelbi Conover said.
Shoppers like Conover are once again heading out to local stores and restaurants to show their support in person.
“I came in to get a photo framed today, it’s fantastic that we have those offerings that are open and we love to support them,” Conover said.
And as state and federal aide runs out, businesses are depending on more customers to come back.
“I think we need to train people to shop local, to be really intentional and support our city. We have such a great city with wonderful boutiques and just educate everyone that we need their help to stay and thrive during this pandemic,” Dettler said.
“Everyone is impacted by this, but don’t forget about us, support your local bars and restaurant,” Ellerbroek said. “I’m getting emotional because it’s emotional, any business owner puts a lot of heart and soul into their business and they’re all concerned, its not just me.”
While the state’s small business relief fund has been used up, any business owner in need of help is encouraged to reach out to the office of economic development for the latest updates on available resources.