Small LA Businesses Struggle To Receive Loans As Ruth's Chris, Shake Shack Receive Millions
LOS ANGELES (CBSLA) — Businesses affected by the coronavirus shutdown have been urged to apply for loans, but some small local businesses are not getting as much help as their bigger counterparts.
Sami Bennett owns women's boutique, Wood N' Hanger, on what usually is a busy stretch of Ventura Boulevard in Woodland Hills.
She applied for a small business disaster loan but when it arrived, she was shocked at the amount.
"We were told we would probably get an infusion of $10,000," Bennett said. "We ended up getting $2,000. What can you do with that?"
RELATED: Shake Shack Returns $10M Loan To Federal Government
The Small Business Disaster Loans and the Payment Protection Program were out of money as of Monday. It was also revealed that several large chains have received millions.
Ruth's Chris Steak House received $20 million while burger chain Shake Shack received $10 million — which the company later said it would return.
However, the Small Business Administration (SBA) cannot make any new loans against those funds until Congress authorizes another round of disbursements.
Jennifer Saxton, the owner of Tot Squad, a marketplace for new parents, said she applied for both programs and has yet to receive a dime.
"I feel like I've been left behind by our government," said Saxton. "I feel like I have dotted every I and crossed every T and have been first in line and there is no clarity about how these funds are being allocated."
Dreamy Cupcakes in Northridge did get a sizable SBA loan, but owner Jenica Braddock has had to change her business model to stay afloat.
In addition to opening for carry-out, as of May 1, she is launching at-home gourmet cake mixes.
"My goal is to get it into grocery stores nationwide and bring dreamy creations into people's homes," Braddock said.
Saxton has shifted to more online services but doesn't know if it will be enough to sustain her business.
"I really want our government to hear our cry for help that we are putting out there and also for our banks to do a better job," she said.
Ruth's Chris Steak House released a statement Monday saying it has a responsibility to its 30 business owners, its shareholders, and its customers to do everything it can to make sure the business is strong a viable. The company did not mention returning any of the funds.
