By Philip Haldiman
Twitter: @PhilipHaldiman

Kristine Kollasch, owner of Fine Art & Creative Environments, is one of the lucky ones.

During a time when many artists are out of work, Ms. Kollasch has a few projects previously contracted including a public art project for the Happy Valley Road and Loop 303 bridge in north Peoria.

Ms. Kollasch opened her business in 1997 with three categories that offer a balance of specialties: fine art, murals & themed environments and public art.

Thankfully, she said, the city of Peoria and a few others are keeping the business going, safely from Ms. Kollasch’s home studio.

She is grateful to have work, but it’s not the way it was — COVID-19 has decreased her business and she plans to seek financial assistance.

“Thankfully many of the projects we have in house at Fine Art & Creative Environments are tied to construction projects that seem to be moving along as scheduled. I do have some work that’s been postponed and obligations that I will put off until safer times that will definitely impact me, but I’m trying to do what I can to budget, stay positive and apply for financial help as I see necessary,” she said. “Having large public art projects to work on certainly takes my mind off of the worry of the day.”

Countless other nonprofits and small businesses are struggling to survive due to the pandemic and some experts say many won’t make it. But there has also been a grand outpouring to stop that from happening and keep the local economy afloat.

Non profits

Steve Seleznow, president and CEO of Arizona Community Foundation, said that like many small businesses, the nonprofit sector needs access to capital and additionally relies heavily on donations and government contracts.

Mr. Seleznow said that sector is the 8th largest driver of the economy and due to a substantial hit because of the COIVD-19 pandemic, could lose a substantial portion.

Arizona Community Foundation and its affiliates provide funding for nonprofits.

“Even prior to this crisis, the nonprofit sector was an uneasy one. What we lose has an impact on the overall economy. Often we don’t think of nonprofits as being at table when we talk about the economy but they are an essential part of the ecosystem, and as they go so does our economy,” Mr. Seleznow said.

“My fear is that with nearly 22,000 nonprofits in Arizona, we could lose a substantial portion. I don’t even want to put a number on it other than substantial. Some won’t weather the pandemic issues and economic issues. Even with grants available and people hustling, nonprofits do not have the relationship with banks like small businesses do, either with bankers or access to capital. So their ability to mobilize and get the small business loans for which they qualify is even that much more difficult.”

Stimulus plans

The president signed into law the $2.2 trillion CARES Act, which contained $376 billion in relief for American workers and small businesses, March 27. As part of that stimulus package, the $350 million Paycheck Protection Program ran out of money set aside for low-interest loans to small businesses to keep their workers on the payroll. This week, the federal government approved a plan to renew $310 billion in funding for the PPP.

As the pandemic emerged, chambers of commerce and other business networks across the Valley jumped into action to help struggling businesses obtain this needed capital.

Michael Cohen, business analyst for the Maricopa Small Business Development Center, said he heard the new relief package will run out in less than a week and under the new PPP, the playing field has changed as some powerful tech companies, such as Intuit, maker of QuickBooks, and PayPal are now able to process loans through their banks as well.

Since these entities are entirely tech based, it would not be a stretch to conclude they will be able to push through the maximum number of loans they possibly can, he said.

“That being said, it is not a substitute for a strong personal banking relationship,” he said. “Some of our smaller community banks had an excellent track record on the first go-around because of their personal involvement in the process.”

Once underutilized

The SBDC used to be known as an underutilized resource for the small business community but now, Mr. Cohen said, his client load at the location in Peoria has increased by about 300%, with a mountain of emails and voice messages to boot. The center has been absolutely slammed with requests for assistance with Small Business Association grant and loan programs, he said.

“We are determined to get to everybody in a reasonable time frame, usually within 48 hours,” he said. “What makes the task more difficult is the ever changing landscape of the federally funded programs. In a typical day, the SBA is telling us one thing officially and our clients are telling us something different based on information they have personally received from other sources. Adding to the confusion, is the fact that some funding comes directly from the federal government while other funding is obtained through banks.”

Consulting with an organization such as a local chamber can give local businesses the guidance to secure a funding source. Many organization, such as the SBDC, offer this service for free.

Mr. Cohen has drafted step-by step guides to assist business owners with loan applications and compiled documents he recommends they fill out to assist them in the process. He will then review them, and then enter them into the online application. It can be a complicated process, he said.

“I cannot stress enough, if you don’t do this right the first time, it could take months to get your corrected application reviewed and approved,” he said. “A note to every borrower — you have not secured anything until your lender has received an SBA Loan Approval Code for your particular loan, a ten-digit number. Once you have that, the funding will follow. Without it, you essentially have nothing.”

There are more than 553,000 small businesses in Arizona that employ about 1 million Arizonans, according to the Small Business Administration.

Mr. Cohen, who was hired less than a year ago, said local businesses are integral to the state’s economy.

“I’m just really grateful to be at the right place at the right time,” he said. “We are making a difference and standing up for the little guy every chance we get. I’m not worried at all about the banks or the airlines. It’s the people who own food carts and pizza restaurants and nail salons that keep me up at night.”

Grand outpouring

The pandemic has resulted in an outpouring of assistance to the business community. State and local entities as well as individuals have been stepping up to help fill the need in the form of donated time and money.

Nearly 39,000 Arizonans donated a record-shattering $6.1 million to 913 nonprofit organizations participating in the seventh annual Arizona Gives Day 2020, April 7. Last year, the event raised what was then a record of $3.6 million.

In addition to this year’s financial support, 2,225 volunteers pledged 81,862 hours to Arizona nonprofits.

Mr. Seleznow said probably around $30 million so far has been raised to help nonprofits statewide. He said the needs are far greater than what has been raised and there is going to be a lot more investment needed, but it has been moving to see what this community can do when it really applies itself.

Arizona Community Foundation and its affiliates provide about $70 million in grants a year to nonprofits. Mr. Seleznow said restrictions have been removed from those grants to ease the pain nonprofits are feeling.

“If you need to use them for survival or to address COVID-19 — all restrictions are off. On community impact loan funds, below market rate loans to nonprofits, we suspended payments without penalty and without interest for all our borrowers so they don’t have to make those payments every month and we will just tack those on to the end of the term of the loan,” he said.

Philip Haldiman
News Editor | Peoria
@PhilipHaldiman

phaldiman@iniusa.org

Philip Haldiman is a third generation Arizona native with brief residencies on the east and west coasts. He has bachelor’s degrees in Theater and Journalism at Arizona State University, and is an award winning journalist with more than 15 years worth of experience in reporting and editing. Most recently, he took first place for investigative reporting and third place for best sustained coverage or series at the 2023 Arizona Newspapers Association awards. In his free time, he produces an autobiographical comic book about his time spent in Hollywood and his life as a cult film star.