Indie Beauty Brand Founders Share Their Experiences Applying For Small Business Assistance
As part of the $2 trillion economic package passed into law last month with the Coronavirus Aid, Relief, and Economic Security Act (CARES), the Small Business Administration was directed to deliver nearly $350 billion in loans to small businesses under the Paycheck Protection Program. Now, politicians are pushing for an additional $250 billion to be funneled into the program. Other countries, municipalities, nonprofits and corporate entities have also launched small business assistance initiatives to help companies suffering from the economic impacts of COVID-19.
In this edition of Beauty Independent’s ongoing series posing questions to beauty entrepreneurs, we ask 15 brand founders and executives: What government or private programs are you interested in applying for or have applied for to support your business?
- Stacia Guzzo CEO and Formulator, SmartyPits
We applied for both versions of the SBA loan (the long, extensive first version and the shorter, second version) and the $10,000 grant associated with that loan as well. We plan on applying for the Paycheck Protection Program as soon as the application is available to submit through our lender.
As far as how the process has been, if you've applied for loans in the past, this shouldn't be difficult. The first application for the Economic Injury Disaster Loan (EIDL) was very similar to SBA loans in the past. The second application was much, much more streamlined and didn't take more than 5 to 10 minutes.
- Jill Rowe Co-Founder, Cultivate Apothecary
We've recently applied for the EIDL loan of $10,000 through the SBA. This seemed the most likely monies we could get as we don't have employees that we regularly pay—my business partner and I run the company and don’t really take a salary yet—to match the criteria for the PPP loan. The application was very straightforward and relatively quick to complete.
I’ve heard that there is the possibility that this loan will be forgiven, but, because the details of the bailout are still being hammered out, I'm not confident that's the case. I’ve now read that the original PPP terms of .05% interest over 10 years has just been changed to 1% with a 2-year payback period. I’m hesitant to try to get a bridge loan at this point as I don’t want to incur further debt without really knowing what our sales will be like in the next six months.
- Allison Howard CEO, Nollapelli
We applied for the SBA's Economic Injury Disaster Loan (EIDL) program and for grants from Visa-iFundWomen and the Verizon-LISC small business recovery grant. All of the applications were easy and straightforward.
- Christine Martey-Ochola Co-Founder, Nuele
We are looking at the CWCA, the Covid Working Capital Access program in Pennsylvania, and are currently in the process of reviewing this application. This program meets the needs of our company, especially from the working capital perspective, since several of the initiatives we had planned were halted, leading to an impact on revenue. The Chester County Economic and Development Council is the sponsoring organization for our county in Pennsylvania and, thus far, we have attended a webinar to help with the application process.
- Christy Hall CEO and Founder, Mikel Kristi Skincare
We have such an amazing team of women that make all the magic happen, and I don't want to lose any of them. With wholesale purchases down 100% due to mandatory closure of spas and med spas, we are utilizing the government support to help manage business costs during this brief time.
There has been a lot of confusion about how to proceed with getting the help we need but, since the passing of the CARES Act, it seems to be more clear. We have applied for SBA loan assistance, and so far, so good. Once the loans come in, we will be able to support our team. I hope we all make it through this healthy and strong as individuals and businesses.
- Aly Klinger Founder, BeautyFul
Prior to the passage of the aid package resulting from the coronavirus pandemic, the only program I had considered investigating was the Women in Business program. Once the aid package was passed, I did think for a moment about looking into some of the aid provided under that bill, but, honestly, for me, it feels a bit like taking bread out of the mouths of the starving. There are so many businesses that have multiple families relying on them, and I'm fortunate that I can still work during this terrible period, so I'd rather the available aid go to those companies who really, really need it.
- Evelyne Nyairo Founder, Ellie Bianca
Just like thousands of companies around the world, the novel coronavirus has disrupted our flow of things. We are happy that the Canadian government has acted fast in responding to this. Presently, we’re interested in applying to the government programs that are offering financial support for businesses, one such being the Canada Emergency Response Benefit (CERB) to help us keep our staff employed. We are also keen to apply to the newly announced new Small and Medium-sized Enterprise Loan and Guarantee program. We had big growth plans for 2020 and, despite the present challenges, we want to stay focused and meet our targets.
Furthermore, we want to do our best to be a part of the solution during this pandemic. We have received numerous phone calls from our partners and government asking for people who have expertise like we do to see how we can offer support. And, as such, we have taken steps and will be launching an all-natural hand sanitizer that is kind to the skin but also 99.9% effective in killing germs and bacteria, and we have received health Canada’s approval for the production and distribution. Production plans are underway, and the sanitizer will be available online and across Canada through our distributor Purity Life Health Products. We want to do our part to be on the front lines of keeping Canadians safe during these trying times.
- Rachel Winard Founder, Soapwalla
I applied for several programs: 1) The NYC employee retention grant, 2) The federal Economic Injury Disaster Loan (EIDL), and 3) the federal Paycheck Protection Program (PPL).
I'm pretty hesitant to participate in an interest-bearing loan program at this time. The last thing I want to do as a struggling small business is to take on debt. The NYC employee retention grant is just that—a grant—so I'm hopeful that I receive that, and the EIDL has a $10,000 grant attached to it, which I am also interested in. These aren't large sums of money and will act only as temporary band-aids to help me make payroll and rent.
I've found the PPP application process a nightmare. Chase's site crashed multiple times last week and weekend. I finally was able to apply yesterday, and I have no idea when I may hear back. Plus, the details of the program have changed dramatically since it was first announced. The PPP won't be nearly as helpful for small businesses such as mine that are located in NYC, as only a max of 25% can be allocated to rent and utilities if we wish to participate in the portion of the loan that may be eligible for forgiveness. In NYC, with high rents and overhead, this really hamstrings our use of the funds.
- Erin Williams Owner, Erin’s Faces
We are trying to figure out what to do. My bank is a credit union that isn’t an SBA-approved vendor, so we can’t go through them for the PPP forgivable loan. It’s a challenge as most big banks aren’t processing the PPP loan application for new clients or even for all of their existing clients. We were referred to a bank out of state by our financial advisor and submitted an application to them and followed up, but that was a week ago, and we haven’t heard back from that bank.
We’re looking into smaller online options, but are hesitant to jump into the water with someone we don’t know without being informed. And, then, time to get informed is limited as we’re scrambling with limited team members to get everything done during the day.
There is a massive feeling of pressure to rush as the funds are limited, though a new vote in the Senate would be great to add more money, but also an incredible lack of clarity on the how-to-do-it front, which makes it tough. I think the motive of the loan is wonderful, and I hope it helps a lot of people. I’m just not sure that we’ll able to be one of them.
The Washington, D.C. government is offering micro-grants for small business owners, and that's one of the first grants we've applied for. Shea Moisture just announced that they will offer a $1 million relief fund targeted at women of color specifically. And, of course, the federal government passed a big package, including funding for small businesses. Verizon along with Local Initiatives Support Corp (LISC) has a small business recovery fund that also targets entrepreneurs of color and women. We are going to try to apply to as many grants as possible, but, obviously, those that target women of color entrepreneurs are a key priority.
Overall, the forms have been pretty easy and intuitive, so it's good to see that people aren't setting up lots of roadblocks and hurdles during this time. I think one of the challenges is that a majority of black-owned businesses have no employees and are owned by one person. Often, when people think of small businesses, they think of businesses with 100 employees. It will be important for this recovery to not shortchange small minority-owned businesses and penalize them for being under-resourced and, thereby, exacerbating the funding gap. We're hopeful that this will actually shine a light on the need for funding and investment for small businesses, especially those owned by black women and all people of color.
- Joe Freeman CEO, Zone Naturals
We think it is important for small businesses to review any program offered by the government. These are complex times and, with things changing so rapidly, the biggest issue we have had is identifying the details of the best program for our company and our teams. We are continually researching the details to see what options are available, and it’s definitely been a hectic process thus far. I’m hoping things become more clear in the coming weeks.
- Ellie Hang Trinh Founder and Formulator, Skin Probiotics
I have applied for a small business loan, the Small Business CARES Act loan, through my local bank that my business and personal accounts are at. This application was online, and it was streamlined and had fewer document requests than the SBA disaster loan that came out, which I did not have all the documents required for. The fund, if approved, will be used to pay salaries, rent and utilities.
I also applied for a $10,000 grant offered by a local business organization in Houston: ALICE. We would like to use this money, if granted, to pay down our high-interest loan—29% to 35%—from our business credit cards and merchant lenders.
Time is critical, and I have not heard back from either. It probably takes lots of time to go through so many applications. Either money will help us tremendously.
- Kim Wileman CEO of Cobuna Brands, as|if by Nassif
As a new brand just launching, we have relied upon our investors for funding. For the near future, we are exploring every avenue for funding, including government and private programs along with provisional funding from our board. We are in the early stages of applying.
- Eva Eckerblad and David Bronkie Co-Founders, Siblings
Currently we're in discussions with our legal team and banking partners in regards to the Paycheck Protection Program as well as Economic Injury Disaster Loans. All of our partners have been very supportive and informative in trying to help small businesses navigate these difficult and unprecedented times. We are doing everything we can to ensure our business comes out of the other side of this pandemic with as much momentum as possible.
- Elaine Li Founder, Iremia Skincare
As a small business, we still rely on a lot of markets for connection, sales and awareness. Most of these markets have been cancelled or postponed, resulting in loss of sales. So in order for us to continue operations, we have had to increase our operating line and applied for EI. The entire process of navigating the different options, wait times and information has been long and tedious, but I think it’s important to stay on top of any options we have access to.
If you have a question you’d like Beauty Independent to ask beauty entrepreneurs, please send it to [email protected].