The Washington Post - 19.03.2020

A24 EZ RE THE WASHINGTON POST.THURSDAy, MARCH 19 , 2020

the coronavirus outbreak

BY JEANNE WHALEN

Some entrepreneurs hurt by
the coronavirus shutdown say
they’re facing delays tapping
emergency loans from the Small
Business Administration, even as
the White House calls for billions
more in funding for small busi-
nesses.
The SBA announced a corona-
virus disaster loan program on
March 12, offering up to $2 mil-
lion per business to help small
firms overcome the loss of reve-
nue amid the health crisis.
The SBA cautioned at the time
that each state must seek and
receive a disaster declaration
from t he agency before it can start
lending in that state. Entrepre-
neurs say that process, required
by law, is holding things up.
The dire situation some busi-
nesses are facing underscores
how close to the bone many entre-
preneurs function. A few days’
delay wouldn’t matter to a large
corporation but can make or
break a small business, they said.
“People are still taking bills out
of my account, and I don’t have
money coming in,” said Jason
Smith, who employs seven people
at M&M Car Care Center in Mer-
rillville, Ind. “It’s going to get tight
really quick.”
Smith said his wife called the
SBA on Monday after hearing
about the loan program. She was
on hold for an hour and 40 min-
utes before getting disconnected,
he said.
The couple also tried the SBA
website. At first, the site
“crashed,” Smith said. Later that
day, he accessed the site and
found Indiana had not yet been
granted the disaster zone status.
Smith said he’s not pointing
fingers. “I understand there’s a lot
of turmoil going on, with people
trying to figure out what to do,” h e
said. He estimated that he needs
about $50,000 to be able to pay
his bills and employees for the
next several months.
The SBA did not respond to a
request for comment on Wednes-
day. On Tuesday, the agency said
it was easing the program re-
quirements to enable states to
receive emergency declarations
faster.
Indiana Gov. Eric Holcomb (R)
announced Wednesday that the
state had requested a disaster
declaration from the SBA.
The Trump administration is
working with congressional Re-
publicans on an emergency stim-

ulus package that would devote

an additional $300 billion toward

helping small businesses avoid

mass layoffs, The Washington

Post reported Wednesday. It was

not immediately clear whether

the SBA would play a role in that

lending.

Small businesses employing

fewer than 500 people contribut-

ed about 44 percent of the coun-

try’s gross domestic product and

employed about 48 percent of the

workforce in 2014, according to

the SBA and the U.S. Census Bu-

reau. Businesses with fewer than

20 workers employed 18 percent

of American workers that year.

Calls to protect small business

are growing more urgent as signs

of layoffs grow around the coun-

try.

Mary McNamara, the owner of

Mountainside Mercantile, an an-

tiques store in Kodak, Te nn., said

she also found that she was not

yet eligible for an SBA loan be-

cause her state had not received a

disaster declaration when she

checked Wednesday morning.

“My family has been in busi-

ness since 1955,” she told The

Post. “Our storefront is tied to the

tourism seasons in the Smoky

Mountains. March is when we see

an uptick in sales, after weather-

ing the lean winter months. With

pretty much everything closed

here until at l east early May, t here

is a significant possibility our

family will lose our business.”

“Our landlords have never

been willing to accommodate us

in the past, so we are fairly certain

they won’t now,” McNamara said.

Te nnessee Gov. B ill Lee (R) said

Wednesday that he had requested

the disaster declaration.

Some firms will not qualify for

the SBA loans. “A business owner

would probably have to show they

were running a successful busi-

ness before coronavirus. This is

definitely not just throwing mon-

ey at a problem,” said Chris Hurn,

chief executive of the small-busi-

ness lender Fountainhead Com-

mercial Capital, who is familiar

with SBA requirements.

Help is cropping up in other

quarters. Facebook this week said

it would distribute $100 million

in grants to help small businesses

hurt by the health crisis.

Tim Watson, owner of a char-

ter-bus company in Endicott, N.Y.,

said he was also unable to apply

for the SBA loans as of Wednesday

afternoon because New York has

not received a statewide disaster

declaration. State officials did not

respond to a request for com-

ment.

Watson’s company employed

30 people until he was forced to

lay off many of his drivers a few

weeks ago, after all of his custom-

ers canceled planned trips.

“We have bus payments, insur-

ance payments, mortgage pay-

ments,” Watson said. “We’re look-

ing at all of our expenses and

looking at zero cash flow. We

haven’t even started an engine in

probably a week.”

“We’re not looking for the bail-

out the airlines or cruise industry

are looking for. ... We’re just look-

ing for some kind of alternative to

bankruptcy,” he said.

Smith said the same is true of

his auto-repair business in Indi-

ana. He has much less buying

power for auto parts than chain

stores do, making his costs much

higher, he said.

He also provides health insur-

ance for his employees, covering

100 percent of the cost, he said.

Just a few months ago, he opened

his second auto-repair shop, mak-

ing the timing of the crisis partic-

ularly bad.

On Wednesday, Smith bought

lunch for his staff from a local

restaurant that has also fallen on

hard times. “Everyone is just try-

ing to help everyone out,” he said.

Customers have mostly

stopped coming into his shops,

and those who do stand six feet

away from the counter, Smith

said. “The phone’s not ringing.

People are scared,” he said.

[email protected]

Awaiting federal loans, small businesses brace for losses

YOUNGRAE KIM FOR THE WASHINGTON POST

Jason Smith, who owns M&M Car Care Center in Merrillville, Ind., estimated he needs about $50,0 00 to be able to pay his bills and employees for the next several months.

BY TRACY JAN

AND LAURA REILEY

American farmers were brac-
ing for a shortage of seasonal
workers Wednesday after the
State Department suspended
routine immigrant and nonim-
migrant visa processing in Mexi-
co, including for temporary mi-
grant laborers.
The delay in visa processing
for farmworkers comes just as
harvest season begins in Florida.
Companies responsible for feed-
ing the country are already ex-
pecting fewer available workers
to manufacture, deliver and un-
pack g roceries a s the coronavirus
pandemic intensifies. The sea-
food industry, including fisheries
and crab-picking in Maryland,
whose hiring season starts in
April, will also be affected by the
U.S. government’s decision.
“One of the most important
things we need to do is to make
sure that our supply chains for
food stay in place, and guest
workers are a big part of what
drives that engine,” said Sarah
Frey, founder and chief executive
of Frey Farms, which operates in
Arkansas, Florida, Georgia, Illi-
nois, Indiana, Missouri and West
Virginia. “We have to figure out
ways to keep going. Right now,
feeding people is an essential
service.”
Frey said she was making calls
to lawmakers until midnight all
week, extolling the role migrant
farmworkers play in the U.S. food
supply. Of the 500 to 600 workers
Frey employs during peak sea-
son, about 250 are on H-2A
seasonal worker visas.
Frey said she was expecting
her first crew of two dozen work-
ers to come from Mexico in 10
days to help with t he watermelon
and tomato harvest in LaBelle,
Fla. She is expecting more mi-
grant workers through the spring

and summer, picking fruits and

vegetables at her farms in Indi-

ana and Missouri, and harvesting

pumpkins come fall.

The American Farm Bureau

Federation warned that the sus-

pension in visa processing in

Mexico could have a major effect

on agricultural production.

“Under the new restrictions,

American farmers will not have

access to all of the skilled immi-

grant labor needed at a critical

time in the planting season. This

threatens our ability to put food

on Americans’ tables,” federation

president Zippy Duvall said in a

statement.

The federation said it is work-

ing with the Trump administra-

tion to find safe, practical w ays to

admit farm laborers as emergen-

cy workers under the H-2A guest

worker program. “Failing to do so

will impact our ability to provide

a healthy, affordable domestic

food supply,” Duvall said.

Many seasonal workers will

still be granted entry. The State

Department is allowing laborers

with p revious work e xperience in

the United States and who do not

require in-person interviews to

return, according to the federa-

tion. In 2019, 258,000 migrant

workers received H-2A visas, the

vast majority of whom were from

Mexico.

The U.S. Agriculture Depart-

ment said the agency is working

with the State Department to

ensure minimal disruption in

visa applications.

The State Department told

The Washington Post on Wednes-

day that it is “aware” of the

importance of the seasonal for-

eign worker program to the

country’s economy and food se-

curity, and said it is reviewing all

options.

The agency has told industry

associations that it intends to

continue processing H-2A visas

for agricultural workers and

H-2B visas for seasonal laborers

in the seafood, landscaping and

other industries — but that it will

modify its procedures “to facili-

tate the social distancing recom-

mended by health authorities,”

according to an email obtained

by The Washington Post.

The U.S. Consulate in Monter-

rey, Mexico, said it would priori-

tize the processing of returning

seasonal workers who are eligi-

ble for an interview waiver. “Be-

cause limited interview appoint-

ments will be available, we may

cancel some first-time applicant

appointments that have already

been scheduled,” the email said.

“First-time applications will not

be processed if they are submit-

ted as returning applicants.”

Allowing returning H-2A

workers to be processed without

interviews will help ease the

plight of farmers counting on

foreign labor, but it “certainly

will not solve the entire prob-

lem,” said Mike Carlton, director

of labor relations at the Florida

Fruit and Vegetable Association.

Florida grows 300 commercial

crops, nearly all of which depend

on migrant laborers, he said.

“We have very few domestic

workers available to us,” Carlton

said. “The numbers are not sus-

tainable for us.”

Labor-intensive, hand-har-

vested crops will be hit the hard-

est by the delay in visa process-

ing, he said, especially as crunch-

time for Florida farms approach-

es in the fall.

Michael Schadler, executive

vice president of the Florida

To mato Exchange, a trade orga-

nization, says the state’s tomato

producers rely especially on

H-2A laborers.

“It’s become a bigger part of

our workforce in recent years,” h e

said. “This latest development

puts at risk a portion of our

tomato crop from being harvest-

ed, as well as all kinds of crops

from around the country. We

need a quick resolution so that

farmers can continue supplying

fruits and vegetables to the coun-

try during this challenging time.”

There will probably be wide-

spread unemployment in the

hospitality, travel and tourism

fields due to coronavirus quaran-

tines and curfews. But Carlton

said laid-off hotel and restaurant

workers are unlikely to fill the

labor shortage in food produc-

tion.

“It’s certainly a potential

source of labor,” he says, “but it

does require a certain amount of

skill to be productive in harvest-

ing fruits and vegetables. You

need to get produce harvested

when it’s ready to be harvested.

Delays due to inexperienced

workers could mean losses of

crop. This work has not generally

been something that domestic

workers are willing to do.”

California is likely to be hard-

est hit, bringing in only half of

the migrant labor it will need,

according to Jason Resnick, vice

president and general counsel

for Western Growers, a trade

group. Historically 50 to 60 per-

cent of the seasonal farmworkers

are returning, Resnick said. Of

those, 10 to 15 percent would

have issues that would not quali-

fy t hem for the interview waivers.

The state’s $50 billion agricul-

ture industry produces nearly

half of the nation’s fresh fruits

and vegetables, and employs

roughly 800,000 f armworkers. In

the past five years, more than

40 percent of California farmers

reportedly have been unable to

hire all the workers they have

needed, with many turning to

mechanization to make up for

the shortfall.

Growers in Salinas, Calif., will

be affected first. They were

scheduled to have workers arrive

at the end of March, working

fields of lettuces a nd leafy g reens.

“The application process re-

quires that you apply two months

before you need the workers,”

Resnick said, “So summer fruits

and vegetables could get stacked

up like dominoes. It’s going to

affect the entire country.”

In Virginia and Maryland,

crab season opened this week in

the Chesapeake Bay. Given the

mild winter, crabs are already

starting to scurry out of the mud

and into the crab pots, said A.J.

Erskine, who works for two sea-

food companies and is board

chairman of the Virginia Seafood

Council.

“That resource is going to be

harvested but not processed be-

cause there’s not going to be any

seasonable labor to h elp pick that

crab meat,” Erskine said.

Seafood companies have Mexi-

can migrant workers scheduled

to cross the border over the next

two weeks who may no longer be

processed, industry representa-

tives say.

“It’s going to be devastating to

the Virginia commercial seafood

industry if these crab pickers,

bait packers and fish packers

don’t get help,” said Mike Hutt,

executive director of the Virginia

Marine Products Board, which

represents the state’s seafood in-

dustry. “The timing can’t be any

worse. It’s possible that for some

of these people, if they don’t get

their workers, they could go out

of business.”

[email protected]

[email protected]

U.S. farms, fisheries hit by suspension of routine visa processing in Mexico

ZACK WITTMAN FOR THE WASHINGTON POST

Fruit pickers work last year in a strawberry field in Duette, Fla. Harvest season is now getting

underway in the state. California is likely to be the hardest hit state.

Farmers brace for

shortage of seasonal

workers as harvest starts