Arcadia National Bar in downtown Portland is a place for Skee-Ball and NBA Jam, where friends can gather for a beer in the light of TVs connected to game consoles and flashing scoreboards. Owner Dave Aceto describes it as “the opposite of social distancing.”
The arcade bar would have been celebrating its sixth anniversary in September. But Arcadia has been closed since the coronavirus arrived in Maine, and Aceto spent that month paying employees to stay home with money from the Paycheck Protection Program, a forgivable loan program for small businesses.
His business was one of more than 28,000 in Maine that received a loan earlier this year under the program, which was the largest source of federal funding flowing into Maine during the pandemic with more than $2.3 billion in loans. It had the goals of ensuring virus-related business shutdowns did not lead to long-term closures and keeping workers on payroll.
Both are in jeopardy. The forgivable loans were intended to cover eight weeks of expenditures, but the pandemic has dragged on months longer. Many are facing dire straits similar to March, when states closed many businesses at the start of the pandemic. Nearly all Maine businesses have used up funds. Many laid off workers after exhausting loans. Some have shut down.
Aceto agrees that it is not safe to open a bar like his under pandemic conditions. But with his loan exhausted, he can no longer pay his employees and worries about covering other costs this winter.
“It’s kind of just like treading water and hoping that the bills that do need to get paid, get paid, and that we don’t run out of funding at some point,” Aceto said. “It sucks, but it’s a reality.”
Lawmakers have floated another round of loans as part of a stimulus package, including in a bipartisan proposal earlier this month backed by Maine Sens. Susan Collins — who championed the loan program — and Angus King. But Congress has been deadlocked on virus relief for months, with no deal currently on the table as the holidays approach.
It leaves Maine business owners uncertain as they head into winter with diminished savings after a difficult year. Sumner Richards, the second-generation owner of S. Fernald’s Country Store in Damariscotta, used a program loan over the summer to match his employees’ previous salaries and pay an extra $2 per hour in hazard pay. When the loan money was used up in August, however, he had to lay off three workers and cut pay for those who remained.
S. Fernald’s is open only now for limited window service, serving deli lunch on weekdays. Richards recently received a grant through a state program that will help with some overhead heading into winter, but he said the finances would look “pretty scary” without additional assistance in the next few months.
Richards worries about what would happen if one of his employees got the virus, unsure whether he has the funds to cover the business’s expenses for the time it would have to close. But he also sees how many businesses have closed permanently this year and feels fortunate to have stayed open this long.
The extent of post-stimulus layoffs in Maine is unclear, but data from the Small Business Administration and public records suggest they included both mom-and-pop shops and larger firms. In a November survey by the U.S. Census Bureau, about 13 percent of Maine small businesses said they had laid off an employee in the past week alone.
By contrast, only 5 percent hired someone. The survey also found that 35 percent of small businesses in Maine did not have enough cash to cover more than a month’s business operations. Only 28 percent of businesses could cover more than three months’ expenses.
The news of a coronavirus vaccine lends businesspeople some hope of a return to normalcy is in sight. Bud Hall, who owns three restaurants in greater Bangor, paid his employees over the summer with the help of a federal loan, but is entering winter without usual savings.
For now, Hall is operating all three restaurants with capacity limits. He turns away customers who do not want to wear masks, knowing that means less business for him and fewer tips for workers. With the virus still spreading, he hopes for another round of loans to buoy the business in the next few months.
“My hopes are that it will get me through until summertime, and then once summer hits, hopefully things will get back to normal,” Hall said.
Aceto, the Portland bar owner, used a Paycheck Protection Program loan to put his employees back on payroll this fall, but the money has since run out. He was denied funding in two rounds of a state small business grant program, but hopes to get relief through a new program with different requirements.
He is not sure how long it will be until Arcadia can reopen, but knows it will be a while. While he thinks the bar will survive, Aceto told his employees — some of whom had been there since it opened in 2014 — to look for other work.
“Maybe one of them will come back,” Aceto said. “Arcadia will survive. I’m going to go down with the ship until I can’t play anymore.”