Amy Kane’s business The Bookstore was open for a week in March before she closed due to COVID-19. Kane was able to reopen in June, but she’s been struggling to secure economic relief for her business, in part due to its newness.
Businesses that started this year have been feeling the economic impacts of COVID-19, but because of their newness, many are finding it difficult to qualify for economic relief through the CARES Act.
Haines bookstore owner Amy Kane obtained her business license in January with the plan to open March 6. In the intervening months, Kane invested thousands of dollars in inventory, plus time and energy getting the store ready.
Kane’s bookstore was open just over a week before she closed on March 14 due to pandemic concerns.
Watching news of COVID-19 spreading in Seattle, “that was when I realized, oh my God, I’m going to have to close my business,” Kane said.
She shut her doors a few days before state mandates required businesses like hers to close. The bookstore remained shut until Kane reopened on June 3. During the three months of closure, Kane continued to pay more than $1,000 a month in rent and utilities.
Kane said when she was starting the business, she expected to have a profit pattern similar to others in Haines-higher revenue in the summer, driven largely by the tourism industry, allowing her to build up the savings necessary to carry her through the leaner winter months.
Instead, COVID-19 decimated summer earnings for businesses through Haines. Borough sales tax revenue was down 46% in June and 23% overall for the year.
“The local support has been phenomenal,” Kane said. “If I didn’t have to compensate for being closed for months, for the lack of tourism and for the inability to save for winter, I would be fine, but I don’t think any amount of local support can compensate for that.”
Without financial assistance, Kane said she doubts she will make it through to next year.
“I’ve spent all my savings. There’s no buffer left. Unless something gives, I don’t see my business lasting through the winter,” she said.
Kane has looked into various options for financial assistance including federal loans, the state’s small business grant program and the borough’s small business and nonprofit program. Kane said until recently, she’d been collecting a stack of rejection letters.
The federal loans are designed to assist businesses with employees, helping them keep people employed during economically challenging times, but Kane’s business doesn’t have any employees.
Kane said she applied for the borough’s small business and nonprofit grant program, and was turned down. The borough’s program requires 2019 tax returns as proof of revenue loss, something Kane lacks as the owner of a business that began in 2020.
Kane said she’s waiting to hear back from the state about her application for its business grant program. Last week, the state announced that funding requests for the program have exceeded available CARES Act funds.
In part responding to Kane’s plight, in late August, the Haines Borough Assembly approved a separate grant program for businesses that began this year, prior March 1. Kane is eligible for this program, which will give $1,000 to any qualified business, regardless of the business’ size.
Kane said she’s grateful for the money, but it likely won’t be enough.
“I’m going to get one thousand from them, which is great, but that’s not going to get me through the winter,” she said.
For other new businesses in Haines, the $1,000 grant will make a big difference.
“One-thousand dollars would be a good amount for me. It would really help a lot,” said Rachael Pattison, who purchased a business license in February for her clothing business, AK Stitchcraft.
Earlier this winter, Pattison invested in new sewing machines and wholesale fabrics. She said she’d been counting on a busy summer selling at farmer’s markets to offset the costs, but things didn’t pan out as planned amid COVID-19.
Unlike Kane, Pattison said her business is not her primary source of income. “It’s mostly a hobby I’m trying to grow into something,” she said.
Including Kane’s and Pattison’s, 16 businesses acquired Haines licenses between Dec. 1, 2019 and March 1, 2020.
It’s unlikely that all of these businesses will apply for assistance. Six are based outside Haines. Of the 10 businesses with Haines mailing addresses, one told the CVN that it will not apply for assistance because income has been decent this year. Another business owner said she hadn’t planned to apply because the business is a secondary source of income.
Borough chief fiscal officer Jila Stuart said the borough is currently drafting applications for the new business assistance program. With the exception of two businesses that applied for the borough’s original business grant program and were rejected, new businesses will need to fill out the application in order to qualify.