The Edina small businesses who received forgivable loans through the city’s program to provide financial support amid COVID-19 say the assistance was helpful in keeping them afloat.
The program, which was funded by the city’s Housing and Redevelopment Authority, gave each small business $9,000 in an attempt to supply short-term financial assistance due to the pandemic. The loans were given to 11 different small businesses in May.
The loans helped pay for operational expenses that otherwise may have put the businesses in a more dire situation, business owners said.
“It was super helpful,” said Kate Bispala, owner of Harriet & Alice yarn shop, located at 50th and France. “... I feel like it’s still kind of there. It’s still helping in that when I open up my bank account, I’m like, ‘Oh, okay, I’m here because I was able to have that stability throughout the summer.”
Other businesses that received the loans include Beaujo’s Wine Café & Bistro, Bluebird Boutique, Clothes Mentor, European Wax Center, The Glow Lounge, Jett Beauty, Nakamori Japanese Restaurant, The Optical at 50th & France, Pacifier and Snap Fitness.
The program originally stipulated that a loan would be forgiven if the business remained open for at least two years. But the loans for all businesses will be forgiven next month in order to take off some of the burden to the businesses, said Bill Neuendorf, the city’s economic development manager. All the businesses receiving loans met the forgiveness criteria.
“Businesses, both small business and large business, have been essential to the city of Edina for decades,” Neuendorf said. “We’re really hopeful that this program will help some of these small businesses keep their lights on into the new year.”
For a business to qualify for the loan, it must have been located in a commercial or industrial zoning district in the city, have a brick-and-mortar location, rely on in-person customers, have at least two full-time employees but not more than 25 at an Edina location and a maximum of $1 million in annual revenue, according to the city.
Other factors were also considered in ranking the businesses for need. Preference was given to those with a storefront and who rely on in-person customers.
When COVID-19 hit
When the COVID-19 pandemic began ramping up in March, businesses reported sales dropping dramatically due to Minnesota Gov. Tim Walz’s executive order to close non-essential businesses.
Alissa Montbriand, owner of Pacifier at 50th & France, said the store had to put all of their operations online – a common action businesses took during this time. Pacifier, which has locations in Edina, Minneapolis and St. Paul, sells urban baby and kids goods.
Later on, the store started offering curbside service – Montbriand remembers one interaction in which she held up outfits for a customer in her car for comparison’s sake – and private shopping appointments.
“We service a lot of expecting families, which are a higher risk category, (we want) to make sure they shop safely,” Montbriand said.
The loans helped Pacifier pay for rent at their physical locations despite not having in-person traffic during the closures, Montbriand said.
For other businesses, an online presence was not yet established and needed to be quickly implemented.
Bispala said her store, Harriet & Alice, needed to “fast-track” its website in order to offer customers the ability to buy its yarn online. The challenge with tactile products like yarn, however, is that customers often want to know the feel of it and see the color in person. But that wasn’t such a problem for repeat patrons since they were already familiar with the products, she said.
Bispala’s shop saw an 80% drop in sales in April, she said. The shop, which is just three years old, put the loan payment toward helping pay for rent and utilities. Typically, events during the spring and summer would bring in hundreds of knitters and crocheters to the shop – but this year, those did not happen.
Clothes Mentor in Edina also received loans through the city, which helped to pay employees, said Dan Canfield, owner of the store. The chain’s Edina location was its top-growing store in the region when COVID-19 hit, but then sales plummeted.
Since then, the launch of an updated online store has “boomed,” Canfield said. But it takes a bit more maintenance than traditional e-commerce sites that may have a higher quantity per style, whereas Clothes Mentor, as a second-hand retailer, only has individual pieces.
“It is a lot of work,” Canfield said. “So you might spend hours uploading every single product, and then you might sell through those.”
Future for businesses
Canfield said he is hoping for the best, but knows the pandemic takes uncertain turns.
“It’s just an unknown territory,” he said. “You just do the best you can and work through it.”
Harriet & Alice has also been more consistently busy, which has been helpful, Bispala said. “That’s telling me that people like what we’re doing and they want to continue to support us so that we stick around.”
A second round of monetary support for businesses is on the way; the city is expecting to finalize the roster of small businesses that will receive the next round of financial assistance later this month. This time, the money will come from the federal CARES Act and will fund 40 businesses in the city. Each business will receive up to $10,000 in grant money. The businesses will be chosen by a random lottery drawing.
“We’re being much more simplistic this round,” Neuendorf said.
Montbriand said seeing the community support local businesses helped give them confidence to pull through the stressful and uncertain time.
“(It) definitely made us feel very supported and that the community values all of the small businesses and wants us to be there. That made us very excited,” she said.
– Follow Caitlin Anderson on Twitter @EdinaSunCurrent