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Shuttered RI small businesses anxiously waiting for loan money

Coronavirus

WARWICK, R.I. (WPRI) — Bellani Maternity on Bald Hill Road has been closed for weeks, as a non-critical retailer during the coronavirus pandemic.

Owner Kelly LaChance Guertin says her store, which sells baby and maternity items and also offers classes like baby yoga, stopped holding classes even before it was required to close.

“Our business model is really made where 50% of our income are our classes,” LaChance Guertin said. “And no one’s here.”

As she continues to sell items online, LaChance Guertin is waiting for money to come in from a variety of loans and grants she’s applied for, with no indication of when she might be approved or see a deposit in her bank account.

“I now feel like a grant writer on the side,” she joked, listing off a series of applications she submitted including for the Economic Injury Disaster Loan (EIDL) through the U.S. Small Business Administration, and private grants such as the one for women-led businesses sponsored by Spanx founder Sara Blakely.

How much has come in?

“Not one penny,” LaChance Guertin said. She said she should be able to pay rent in May, but June is questionable.

“Very well-meaning friends and family keep telling me, ‘It’ll be fine, it’s everybody. This will be taken care of,'” LaChance Guertin said. “I know they mean well, but my landlord does not care if anyone means well. He wants money.”

Thousands of small businesses across Rhode Island are awaiting these federal SBA loans, with reports that the fund might run out as soon as Friday and Congress considering infusing more cash into the program.

Part of the holdup has to do with the fact that businesses are applying through their banks, which scrambled to get set up to accept and process applications on short notice.

LaChance Guertin said Bellani Maternity applied for the SBA’s Paycheck Protection Program through Rhode Island-based Citizens Bank on March 23, and has not heard anything about when the money might come in.

“We recognize there is significant need for this program among our customers, and we share the government’s commitment to expedite the distribution of funds,” Citizens Bank spokesperson Frank Quaratiello said in an email. “At this time we are currently accepting applications for all business loan or deposit customers via our website.”

Quaratiello did not respond to a question about how many loans Citizens Bank has actually distributed so far.

In an effort to get money to small businesses faster, Rhode Island Gov. Gina Raimondo announced Monday that Goldman Sachs would commit $10 million in loans for small businesses. But within hours of the announcement, the state stopped taking applications for the new program because of how many businesses applied.

LaChance Guertin said she saw the announcement about the Goldman Sachs loan at Raimondo’s 1 p.m. daily briefing on Monday, and sat down to apply after finishing up virtual learning with her kids. The website told her it was too late.

“That was four hours later,” she said.

Matt Sheaff, a spokesperson for the R.I. Commerce Corporation, said 150 businesses applied for the program before it stopped accepting applications.

“We ran through the entire $10 million in a day,” Raimondo said at her briefing on Tuesday. “I am, as you might expect, trying to expand that. I don’t have anything to announce today. I’m working hard to see if we can convince Goldman to give more to Rhode Island.” (Goldman Sachs did not immediately comment on whether they would do so.)

Raimondo also said she expects the federal stimulus money to start coming in, and she hopes Congress will expand the SBA program.

There have been some success stories. The R.I. Commerce Corporation announced a small “bridge loan” program two weeks ago for restaurants and micro-businesses with fewer than 10 employees. Sheaff said 150 businesses have already received the loans, which are capped at $5,000 and meant to cover expenses while waiting for the federal SBA loans.

About 400 restaurants and micro-businesses will ultimately be approved for the bridge loan, Sheaff said, with 500 applications submitted so far.

Rhody Tees, a screen-printing and T-shirt company in Cranston, is one of the businesses that has received the $5,000, according to owner Jose Castellanos.

Castellanos said he applied for the loan last week and got the money on Monday. He plans to spend it on rent and some equipment loan payments. He said the money will last him about two months.

“I feel confident that we’re going to get through this,” Castellanos said by phone on Tuesday. He has started selling special T-shirts online during the crisis, donating $10 of the $20 cost to a small business of the buyer’s choice.

Castellanos said he has also applied for the EIDL loan advance, but he received an email Tuesday that he would receive just $1,000 for every employee on his payroll — which for him is only three people. He has not heard when the $3,000 might come in.

The SBA’s other loan option — the Paycheck Protection Program — requires employers bring their employees back on the payroll in order to get the loan forgiven. The program is not always the best option for workers who are getting more income now through unemployment insurance plus the $600 extra weekly payment approved by Congress as part of the CARES Act.

There are also a number of municipalities offering local loan programs, including Providence and Pawtucket. The city of Warwick, where Bellani Maternity is located, is not yet offering a local loan option.

LaChance Guertin said she’s keeping positive in part thanks to her customers, who have stepped up to help the business. (Right before her Zoom interview with WPRI 12, a customer dropped by to leave her an iced coffee outside the front door.)

For Easter, the business delivered Easter baskets to frontline workers who may not have had time to shop for their kids — and customers donated funds to cover the cost. And LaChance Guertin has been delivering online sales to customers, referring to the program as the “Bellani Stork.”

“But we deliver packages, not babies,” LaChance Guertin said.

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Connect with her on Twitter and on Facebook

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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