Business owners in Maine aren’t waiting for another federal stimulus bill as they figure out ways to cut costs and defer payments while the coronavirus pandemic drags on and help from Washington remains a remote hope.
After tanking the stock market on Tuesday when he said he would not allow staff to talk to Democrats about a second stimulus plan, President Donald Trump tweeted support for standalone measures including $25 billion in airline relief and another $135 billion in small business loans under the Paycheck Protection Program. Talks restarted again on Wednesday as the markets rose, according to Bloomberg News.
Maine is recovering better than many U.S. states, with the second-lowest rate of coronavirus cases and consumer spending up 2.1 percent as of Sept. 20 relative to the same time in January, according to Opportunity Insight s’ economic tracker. Nationally, consumer spending was down 3.8 percent.
Whether and when a new stimulus package to help still-struggling companies will emerge remains up in the air, but meantime, Maine businesses have had to chart their own futures without expecting any federal or state help in the months since.
Helen’s Restaurant in Machias is one of the 27,000 Maine businesses that received a potentially forgivable loan as part of the first federal stimulus package. But co-owner Julie Barker said she’s not looking for another loan from the program if a new stimulus is passed, even though the first loan helped her restaurant “a tremendous amount.”
Barker said the restaurant used the loan as it was intended to keep employees and run the business, but she doesn’t know any business that has gotten its loan forgiven yet. Getting another paycheck loan would be “a little bit scary,” she said, so her business is waiting things out.
“If it is forgiven the way it’s supposed to be, it will save our business from bankruptcy,” Barker said. “If we have to pay it all back, it will be very bad.”
Barker said she has had to make a lot of adjustments to keep afloat, like cutting more expensive items from the menu, canceling TV service in the restaurant and adjusting labor use during the slower business hours.
Ted Hugger, owner of the Cod Cove Inn in Edgecomb and the Cedar Crest Inn in Camden, also has made adjustments and is wary of taking on more debt through another loan.
With fewer guests, he is giving housekeeping staff more hours to deep-clean rooms as a coronavirus precaution so they have enough work to make a living. He has stopped breakfast service in Camden because it wasn’t possible to make enough money while meeting state distancing requirements. He also stopped continental breakfast at the Cod Cove Inn for a grab-and-go breakfast service.
“We’ve significantly changed the way we’re doing business compared to last year,” he said. “We’re more efficient with staffing.”
Another move he made was to get deferrals on mortgage loans for both inns until next July. He also applied for some of the $200 million in federal Cares Act funds made available to small businesses through the state, but hasn’t heard back yet.
He said he is not putting any faith in the federal or Maine governments’ abilities to deliver any help.
“So the financial arrangements we’ve made and the debt that we’ve taken on have assured us that we can survive until next June or July,” he said, “and then hopefully, the business comes back at some reasonable level.”