San Jose small businesses fighting to stay open amid pandemic

Bay Area

SAN JOSE, Calif. (KRON) — As businesses across California continue to adapt to COVID-19 restrictions, many small businesses are struggling to keep their doors open through the end of the year. 

“For small businesses the hit is very hard, not only are we going to have to cut our employees hours, which impacts their lives obviously, but we just don’t have the same safety net as a large corporation,” said Jenneke de Vries, co-owner of Pizza Bocca Lupo located in San Pedro Square. 

“For us our main focus is to at least stay above water during this lockdown.”

In San Jose, businesses are taking yet another major hit as Bay Area health officials accelerated stay-at-home orders as COVID-19 cases continue to rise. 

For places like downtown San Jose, the once-thriving streets are now nearly empty as stricter COVID-19 restrictions are set in place to minimize the spread of the virus. 

Unfortunately for small businesses — especially restaurants — the new stay-at-home order has only made it harder to continue to stay open. 

“Obviously the last nine months have been very difficult, our foot traffic has dried up which means significant drop in revenue and now with the Al Fresco Dining being shut down,” said De Vries.

“It’s a big balancing act to stay in business for sure and this has been the more dire time in our nine years of being at the San Pedro Square.”

De Vries tells KRON4 News they have been fortunate enough to have grown a significant following, allowing the restaurant to stay afloat during turbulent times. 

But others aren’t so lucky.

According to a recent report by Yelp, San Jose has one of the highest rates of business closures in the nation since the start of shelter-in-place orders in March. 

A total 20.2 out of every 1,000 businesses in San Jose have closed in the last nine months – nearly half of them saying they’re closing their doors for good. 

Located in the heart of the South First Arts (SoFA) District in downtown San Jose, the SoFA Market which offers a variety of independent eateries, a neighborhood cafe, and house bar, has also felt the impacts of stricter restrictions. 

“The main main issue is the decline in foot traffic,” said David Ma, SoFA Market general manager. 

“Our bread and butter have been the conventions as well as the street festivals that occur on the street and both of those are zero right now.”

Businesses throughout the city have since come together to advocate for any additional financial assistance as many fear continued layoffs, reduced hours and many are on the brink of bankruptcy. 

Recently, Santa Clara County Board of Supervisors voted unanimously to invest $6 million into the state’s California Rebuilding Fund — providing loans ranging from $5,000 to $100,000 for small businesses of 50 or fewer full-time employees. 

But for struggling small businesses, some think the help might come too late. 

“We’re doing basically everything we can to keep afloat until everything diminishes and things get better,” Ma said. “We’re grateful for all the grants and all the assistance that we’ve been getting but frankly this conversation should’ve been had about five weeks ago.”

Operating inside of the SoFA Market, award winning Cuban restaurant Habana Cuba tells KRON4 News they’ve also had to make significant changes in an effort to remain open —  including having to let go of several employees as revenues plummeted. 

Now, chef and owner Jennifer Echeverri says she’s urging local leaders to act fast in offering more financial assistance as stay-at-home orders are set to be in place until Jan. 4

“We need our local leaders to act now not later because we might not be here January or February to come,” said Echeverri. 

“We’re getting behind on paying our bills, we’re behind on our rent, we’re behind on payroll,” Echeverri added. 

“We need action now, I know California Rebuild Fund is coming out but that’s for the whole entire state and that’s going to take us months to even apply for that and see anything from that.”

The Silicon Valley Organization (SVO), serves as the region’s Chamber of Commerce and has been pushing for a local relief fund for struggling small businesses in Santa Clara County. 

Leaders at SVO are now advocating for immediate financial assistance from local leaders as the fear of more small businesses closing their door grows stronger with each passing day.

“First, we know that the economic impacts of COVID-19 has disproportionately impacted small businesses, especially minority-owned businesses and microbusinesses,” said Eddie Truong, director of Government and Community Relations for SVO. 

“Small businesses and their employees are a part of the fabric of our community. Our cities and towns lose their character if small businesses are wiped out and their employees lose their livelihoods,” Truong added. 

“An equitable economic recovery requires that we do not leave behind our neediest small businesses and their employees … small businesses and their employees are a part of the fabric of our community.”

Truong tells KRON4 News despite the additional investment from the county into the state’s rebuilding fund, it would have been better if there were cash grants for small businesses instead. 

Truong suggests the following as to how loans should actually be structured: 

  1. Refinance Existing Loans: If cash grants are not possible, asking Santa Clara County to use their funding to refinance existing small business loans for better terms and rates. This approach would offer a lifeline and a longer timeline for them to survive this pandemic, so that small businesses can earn their own income once a COVID-19 vaccine becomes widely available.
  2. Loan Deferment: The SBA offered 6 month deferment of principle plus interest on SBA loans like the 7(a). The pilot ended in August and will require Congressional action to resume. This program was considered a huge success by lenders and borrowers because it provided liquidity for lenders and allowed borrowers to extend loan terms without damaging their credit.
  3. Personal guarantees: Some loans require personal guarantees which can be risky for the most vulnerable small businesses. 

Despite county budget cuts, Supervisor Joe Simitian tells KRON4 News small businesses can apply for the loans by the new year. 

“People are anxious about whether or not we can afford it as a county, my notion is if we’re tight on funds, let’s loan the money, have a rigorous loan program, get the money back, and still try and provide as much as a $100 million in loan funds over some period of time,” said Simitian. “I think we can be both bold and prudent, I don’t think the two are mutually exclusive.”

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