Female Business Owner Shines Light On Small Business Loan Inequities
DENVER (CBS4) - A new year brings another round of small business loans for those struggling to stay open during the pandemic, but the requirements don't always let the people most in need apply. The challenges some face in 2021 comes as data reveals the past year was especially hard for women-owned businesses.
The gender gap demonstrates companies run by men were more likely to recover from the spring shutdown.
"I kind of let society or just my peers make me feel like I wasn't doing enough by just being a mother," said Ashlie Ordonez, the owner of The Bare Bar in Denver. "I want to show other women that you can have five kids and the career of your dreams, and you can do it all, and it's going to be exhausting and it's going to be hard work but it's going to be worth it."
She spent years around the aesthetics industry, and in 2019 decided it was time to open her own spa. While initially the plan was to wait a year, she felt it was necessary to move forward immediately. Ordonez convinced her husband they should take their five kids and move into a new home, downsizing from 4,000 square feet to 1,800 square feet so they could use the money to launch the business.
"She's doing it all, she can do it all, I can do it too," Ordonez said on a video conference call on Tuesday.
She explained women inspired her to become a business owner, and she wanted to do the same for others.
"Women supporting women, and women not afraid to enter a world where it's predominantly men."
A lease signed in February 2020 would let her open a month later after construction was completed. She hired women to be a part of the spa and found products from other female-owned businesses.
Ordonez also featured art from women.
"She's started crying. 'They just closed us.' This was March 17," Ordonez recalled of one of her employees last year. "'They just closed us, we're not opening on Saturday.'"
Even though she had been planning for months and secured a large amount of money from selling her home, Ordonez had to wait until May to open her new business. March is usually the start of the busy season in the beauty industry so she already knew they were behind on their goals.
She did attempt to get a PPP loan, but because her business was so new, she missed the cut off by weeks to be eligible. The government required you demonstrate the loss of revenue experienced by the pandemic based on 2019 earnings. Only those who opened early in 2020 or earlier could still apply.
"Stop telling me I was not economically impacted, I absolutely was," she said. "It's just really hard to hear that all these big companies, that are million dollar companies, that are getting PPPs when us small people, we need it the most."
The same challenge would present itself later in the year when she turned to the Small Business Association for help. The summer was a success overall as customers increased and people felt more comfortable receiving spa services during the pandemic.
Another setback was in the works though, as restrictions increased again in the fall, and October was the last month she had solid numbers in the books.
"The second that the restaurants closed, it was a nosedive. It was so scary how fast and how dramatic of a change it was."
The decline she saw toward the end of 2020 is right in line with what economists saw across the Denver metro area for that part of the final quarter. Ordonez says she lost 60% of her clients after October and a new round of restrictions.
Economists at Gusto say the impact of that downturn was even more impactful for women. The company runs payroll and benefits for thousands of small businesses across the country and has its largest office of employees in Denver.
"There's a significant gap in the recovery rate, and Denver female business owners have been able to recover at 5% lower rate which really speaks to the challenges they're facing on the economic front and at home," said Luke Pardue, a Gusto economist.
Female workers were terminated at a 20% higher rate compared to men when they were employees at a company. The difference in the impact based on gender speaks to the responsibilities women, like Ordonez, face each day as a mothers running a business and keeping students current on schoolwork at home.
Data shows there is even a relationship between district closures and female owners recovering their businesses.
"The long-term effects of these scars are going to be felt throughout these women's careers and inter-generationally to their children," Pardue said on a video conference call.
While the loss in revenue happened quickly over several months, it erases a lifetime of investments by families that may not be recovered. The potential impact on future generations is why Gusto advocates for additional aid by Congress. More funding may be needed by the middle of this year, Pardue explained.
While the outlook for this year is better, in part, because of the vaccine rollout, the lessons from the pandemic highlight the inequity between genders. Years in business leads to more experience navigating economic challenges and relationships developed over time including banks.
"I would love to see a world where women don't feel like they don't have to bring their husband to a meeting," she said. "I'm covered in tattoos, and I feel like I was definitely judged by my cover instead of who I am."
Ordonez says she always felt like people made assumptions about her and having her husband along with her made a difference in getting her business off the ground. Last month, with no sign of restrictions changing, she had already cut hours of her remaining employees and felt like she was at a dead end.
Selling a ring that celebrated her 10-year wedding anniversary was one of the last options left.
"I never thought I'd have a rock like that," she said. "So I was so super excited about having it, but this is just a piece of material. We need to get rid of it so we can pay rent."
Another sacrifice made by her family, she carried on with her business and asked her landlord for any kind of break in the rent until the economic situation improved. She estimates those adjustments including the money from the ring will keep her going for three months.
Enough time to hopefully get her to another busy season in March and receive aid from the government.
"I am very proud of where I am and the hard work that I put in," Odonez said. "I don't have regrets, I'm very happy that I did this."
While rushing to open her business may not have been the best idea and waiting a year until after the pandemic started could have been to her advantage, she remains optimistic about her future. The experiences in the past 11 months are enough to last a lifetime and inspire other women to follow after her.
"I feel like we just need to get out of our own way, and we just need to stop carrying so much about what other people think or have to say. We just need to be resourceful, we need to build each other up," she said of women in business. "Stop telling yourself you can't do it, I've learned so much in this year and it's because I jumped and I just stopped being scared."
