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‘We aren’t making it’: America’s neighborhood stores face uncertain futures | Business

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The ice-cream shop Island Pops in Brooklyn usually sees its business pick up from a winter lull this time of year, when the days are longer and the spring weather sets in.

Instead, its doors are closed to walk-in customers at the order of health authorities hoping to stem the spread of coronavirus by keeping people in New York City out of restaurants, bars, gyms and movie theaters.

Across the US small businesses selling coffee, cakes, pilates classes, books and artisanal cheese have popped up over the last decade, changing neighborhoods for the better, revitalizing downtowns. Now all that is under threat.

Loyal customers – and some big businesses – are trying to help. Buying gift cards, making donations. But on its current trajectory the scale this unprecedented crisis means many of these businesses just won’t survive.

Cities and states across the US this week issued similar orders to close restaurants to dine-in customers and close businesses which create crowds, leaving small businesses such as Island Pops uncertain how long it can go on.

“The government should understand that, one, we aren’t making it,” said Shelly Marshal, Island Pops’ co-owner. “And two, if we have to close up, there are five or six people who have to go home without pay. If they can bail the big banks out they can definitely bail small businesses out.”

Island Pops in Brooklyn.



Island Pops in Brooklyn. Photograph: supplied

Small businesses are the anchor of the US economy and employed 58.9 million people in 2015. Governments are introducing measures to help ease the burden of forced closures, but business owners are worried that help is coming too little too late as they see an immediate drop in business.

Like countless other businesses, Island Pops is encouraging customers to buy gift cards to use after the crisis passes to try to stem immediate losses. Otherwise, their only other income stream is delivery and pickup orders.

“Even that won’t take us through the month for our responsibilities,” Marshall said. “We have staff, of course we have rent, we have insurance, we have everything that still needs to be paid and we’ve gone through our emergency fund, which is our winter fund.”

As of Thursday morning, Marshall said it was unlikely the business could meet the minimum amount of pints it needs to sell each week. It has even become hard to rely on loyal customers, because they too are losing their jobs, or fearful a recession will limit their funds too.

Marshall said her neighborhood, a gentrifying part of Brooklyn with a lively food and drink scene, has been a “ghost town” this week. During one shift, she commiserated with an independent coffee shop owner, who told her at 2pm she was his fifth customer of the day, after opening at 6am.

Patrick FitzGerald, a lecturer at the University of Pennsylvania’s Wharton Business School, said while people might think the world is technology-focused, small businesses depend on in-person interactions.

“The reality is for 90% of small businesses, it’s face-to-face, one-on-one, transactions,” FitzGerald said. “And at the moment, those have all, for the most part have stalled, so the impact is highly dramatic.”

Technological advances can help, however, and FitzGerald said for any business which has been toying with using video conferencing, at-home delivery or pre-purchasing: “The time is now to deploy those.”


The federal and local governments are also trying to help. The US Small Business Administration (SBA) said it would provide businesses with up to $2m in low-interest loans to keep them afloat. And New York City is one of several local governments offering loan and grant programs to local businesses.

Facebook pledged $100m in grants to impacted stores and restaurants, though the company said it would only start taking applications “in the coming weeks”. Other corporations are also offering services to ease the burden on small businesses, but these efforts don’t address the urgent need to replace the cashflow that comes from someone walking in the door.

So small business are taking creative steps to sell amid a disease outbreak.

Retailers big and small are promoting free and discounted shipping offers. Major chains and local grocery stores have instituted special hours for senior shoppers, who are more vulnerable to a severe coronavirus infection. Yoga studios and boxing gyms have moved classes online.

Capitol Hill bookstore in Washington DC closed its store to walk-in customers, but offered private, one-hour appointments for up to four would-be book buyers at a time.

“We have to do everything in our power to continue our operations, and keep people employed and keep our business viable, at the same time we don’t want to do anything to harm our employer or our customers, or the community at-large,” co-owner Kyle Burk told NPR.

These moves are being made even as restaurants and nightclubs are forced to sharply cut staff.

Also in Washington DC, a “virtual tip jar” was created to allow people to support service workers at local restaurants, hotels and nightclubs who were either laid off, not being paid temporarily or not receiving tips. Other businesses are turning to crowdfunding websites to raise money for their former staff while still trying to keep their doors open.

In New York City, the beloved Frankies Spuntino Group is trying to raise $100,000 for the employees it has had to put out of work. “We’re all navigating uncharted territory right now, so we cannot tell you how much we appreciate your consideration,” wrote the co-owners, Frank Castronovo and Frank Falcinelli.

Before closing indefinitely on Friday, it expanded the pick-up and delivery menu. Its handmade pasta, pesto and marinara sauce were sold to at-home chefs. The restaurant also sold martini and negroni kits – the byproduct of an emergency law change to help food businesses during the outbreak.

Previously, only beer could be sold for take-out in New York, but the state liquor board relaxed its laws to allow businesses with liquor licenses to sell liquor and wine to customers who also purchase food.

The Brooklyn cocktail and dessert bar Butter & Scotch had to lay off its entire staff on Monday before closing indefinitely on Thursday. In the few days between, the owner, Keavy Landreth, and the general manager, Stephanie Gallardo, who had been laid off, baked cookies and cakes for to-go orders. They also put together cocktail kits so people could emulate the sweet and boozy experience at home.

“The kits were a last-ditch effort to get some more cash on hand to make sure we could pay our employees and selves before closing fully,” Landreth said in an email. “Had I known they were going to be such a hit I would have tried to make more but there was only so much we could do with two people. Hopefully this new alcohol to-go law sticks around and we can get these cocktail kits off the ground again.”

Island Pops’ Marshall, who was inspired to start the business with her husband after craving the traditional Caribbean soursop ice-cream while sick with another virus, chikungunya, said small businesses are the “lifeblood of the economy” and need all the help they can get.

“We employ a significant amount of employees and we create a ton of employment,” Marshall said. “If they don’t see that, it’s a huge problem in the system.”



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British American Tobacco working on plant-based coronavirus vaccine | Business

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British American Tobacco, the maker of brands including Lucky Strike, Dunhill, Rothmans and Benson & Hedges, has said it has a potential coronavirus vaccine in development using tobacco plants.

BAT has turned the vast resources usually focused on creating products that pose health risks to millions of smokers worldwide to battling the global pandemic.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

“If testing goes well, BAT is hopeful that, with the right partners and support from government agencies, between 1m and 3m doses of the vaccine could be manufactured per week, beginning in June,” the company said.

The London-listed company used the announcement to trump the positive aspects of its tobacco empire, saying that “new, fast-growing tobacco plant technology” put it ahead of others trying to develop a vaccine.

“Tobacco plants offer the potential for faster and safer vaccine development compared with conventional methods,” the company said.

BAT said its US biotech subsidiary, Kentucky BioProcessing (KBP), has moved to pre-clinical testing and that it will work on the vaccine on a not-for-profit basis.

In 2014, the tobacco firm bought KBP, which has previously worked on a treatment for Ebola. BAT said its work was “potentially safer [than conventional vaccine technology], given that tobacco plants cannot host pathogens which cause human disease”.


BAT said it had engaged with the Food and Drug Administration in the US and the Department for Health and Social Care in the UK to “offer our support and access to our research with the aim of trying to expedite the development of a vaccine for Covid-19”.

Dr David O’Reilly, the director of scientific research at BAT, said: “Vaccine development is challenging and complex work but we believe we have made a significant breakthrough with our tobacco plant technology platform, and we stand ready to work with governments and all stakeholders to help win the war against Covid-19.

“KBP has been exploring alternative uses of the tobacco plant for some time. One such alternative use is the development of plant-based vaccines.”


BAT said it had cloned a portion of the genetic sequence of the coronavirus and developed a potential antigen. The antigen was then inserted into tobacco plants for reproduction and, once the plants were harvested, the antigen was purified. It is now undergoing pre-clinical testing.

The tobacco firm is more typically on the receiving end of criticism from campaigning groups, including the use young and attractive models to entice younger demographics to try e-cigarettes and vaping technology.

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Almost a fifth of small businesses ‘at risk of collapse within month’ | Business

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Almost a fifth of small businesses are at risk of collapsing within the next month as they struggle to secure emergency cash meant to support them through the coronavirus lockdown, according to research by an accountancy network.

The chancellor, Rishi Sunak, has pledged unprecedented aid to companies to try to cushion the blow from much of the economy shutting down but businesses and politicians have raised concerns that there are gaps in the schemes.

Some 18% of small and medium-sized enterprises (SMEs) either probably or definitely will not be able to obtain additional cash from the government to survive for a four-week period, according to the Corporate Finance Network.

Its accountancy firm members estimated that almost a third of their 13,000 small-company clients from around the UK would be unable to acquire the cash needed to ride out an extended, three-month lockdown.

Rachel Reeves, the Labour MP who heads the business select committee, wrote to the chancellor on Tuesday outlining concerns with the schemes to support companies.

Income subsidies

Direct cash grants for self-employed people, worth 80% of average profits, up to £2,500 a month. There are similar wage subsidies for employees.

Loan guarantees for business

Government to back £330bn of loans to support businesses through a Bank of England scheme for big firms. There are loans of up to £5m with no interest for six months for smaller companies.

Business rates

Taxes levied on commercial premises will be abolished this year for all retailers, leisure outlets and hospitality sector firms.

Cash grants

Britain’s smallest 700,000 businesses eligible for cash grants of £10,000. Small retailers, leisure and hospitality firms can get bigger grants of £25,000.

Benefits

Government to increase value of universal credit and tax credits by £1,000 a year, as well as widening eligibility for these benefits.

Sick pay

Statutory sick pay to be made available from day one, rather than day four, of absence from work, although ministers have been criticised for not increasing the level of sick pay above £94.25 a week. Small firms can claim for state refunds on sick pay bills.

Other

Local authorities to get a £500m hardship fund to provide people with council tax payment relief.

Mortgage and rental holidays available for up to three months.

Those concerns included some banks’ use of personal guarantees in the form of savings and mortgages to secure lending to small businesses under the government’s hastily formulated business interruption loans scheme. She also said that some of the banks offering the government-backed loans were putting in place “punitive” interest rates that made it impossible for companies to borrow money.

“The challenge now is getting the money out of the door to support businesses before it’s too late,” she told BBC radio on Wednesday. “There are many businesses who if they don’t quickly access this cash they are going to go under.

“That will have huge consequences for employment and also our ability to grow the economy when this pandemic has passed. If businesses collapse they won’t be able to ensure our economy can recover. They will be lost for ever.”

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The banking industry body, UK Finance, has said it is running the schemes in line with the government’s design.

In her letter to Sunak, Reeves said the history of support to the banking sector meant they had to step up. The industry and regulators at the Bank of England have said that banks are well positioned to support the economy through the crisis. The banks on Tuesday night agreed to scrap dividend payouts to shareholders after Bank of England pressure.

“Banks were kept afloat by government and taxpayers during the financial crisis,” Reeves wrote. “I would urge them to play their part in helping small and medium-sized businesses through this crisis.”

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Texas ‘mom and pop’ business flooded with orders for helmet ventilators amid coronavirus crisis

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One month ago, Chris Austin was running a little-known mom-and-pop business in Texas that fielded a few dozen orders a week for his helmet-style ventilation devices.

He had five employees and a handful of volunteers from the family’s church who would pitch in at the workshop behind their home in the small town of Waxahachie.

Then the coronavirus epidemic hit.

Austin’s company, Sea-Long Medical Systems Inc., is getting thousands of orders every day, from America’s top hospitals to countries as far flung as the United Arab Emirates. Researchers say the device, which costs less than $200, could help hospitals free up ventilators for only the most critically ill coronavirus patients.

“‘Overwhelmed’ doesn’t scratch the surface,” Austin told NBC News.

Sea-Long Medical Systems helmets resemble crude spacesuit helmets, with transparent hoods sealed at the neck and two tubes extending from the base.Sea-Long Medical Systems

The demand for the Sea-Long helmet underscores the dire shortage of ventilators in the U.S. and around the globe fueled by a surge in hospital patients suffering from COVID-19.

In the last few weeks, hospitals have been flooded with patients experiencing respiratory problems so severe they need the help of a machine to help them breathe.

Governors have made impassioned pleas for more equipment. Companies like General Motors and Ford have redesigned their assembly lines to produce the lifesaving devices. And hospital executives are scrambling to snap up any equipment that might help ease the escalating crisis playing out inside their facilities.

The Sea-Long device doesn’t look the part of a lifesaving medical device. It resembles a crude spacesuit helmet, with a transparent hood sealed at the neck and two tubes extending from its base. The helmet was originally designed to supply oxygen to patients receiving treatment in hyperbaric chambers.

But doctors in Italy, where a version of the helmet has long been used to treat people experiencing breathing problems, found it to be effective in helping some COVID-19 patients.

Dr. Bhakti Patel, who has been studying the devices for four years, said they hold promise as an early intervention that could spare respiratory patients the need to be put on the more traditional — and costly and invasive — ventilators.

“I would love for there to be a silver bullet for this pandemic,” said Patel, a pulmonologist at the University of Chicago. “My best hope is that the way it changes the game is that maybe it shaves off the number of patients who need a ventilator — even if it’s 1 out of 3 or 1 out of 5.”

“If that is the case,” Patel added, “that would be a game changer when we’re seeing this tidal wave of patients who need a ventilator.”

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Patel led a first-of-its-kind study in 2016 that tested the Sea-Long helmet against an oxygen mask for a group of 83 intensive care patients suffering from acute respiratory distress. The researchers found that the helmet led to superior outcomes: Patients using them required ventilation 18.2 percent of the time, compared to 61.5 percent for the masks, and had a better 90-day survival rate, according to the study, published in the Journal of the American Medical Association.

The trial was stopped early because the helmets proved more effective than the masks, resulting in a smaller sample size than originally intended. But Patel believes the device could lead to a sea change in intensive care units that have long relied on traditional ventilators. Those devices require doctors to fully sedate patients and insert a tube into their windpipes, a process that can cause pneumonia and other problems when used for extended periods of time.

“If we take away the ventilator — which comes with this package of sedating people, making them not move, making them sort of not have memory of what’s happening — perhaps we could spare some patients some long-term complications,” Patel said.

At $162 apiece, the Sea-Long helmet costs a tiny fraction of the five-figure ventilators.

The original devices were made to run through ventilators. But working with Patel and her mentor, Dr. John Kress, Sea-Long has modified the helmets so they can be hooked up to a hospital’s regular oxygen supply, keeping the ventilators free for those who need them most. They have also made another significant modification, adding a viral filter to prevent possible COVID-19 exposure to others.

This week, the team at the University of Chicago Medical Center used the helmet on one coronavirus patient and has gotten encouraging results, Kress said. The facility has received 20 of an expected 100 helmets and is planning to use them on additional patients, the doctors said.

Chris Austin, fourth left, says his team has been working around the clock for the past several weeks.NBC News

Other companies make similar ventilator helmets, but Sea-Long’s is the only helmet available in the U.S. that meets requirements of the Food and Drug Administration and has been validated in a clinical study for acute respiratory syndrome. No studies have yet been done, however, examining the effectiveness of the devices in treating COVID-19 patients.

Austin’s team has been working around the clock for the past several weeks. The workforce has at least doubled to more than 10 people, Austin said, and volunteers have been showing up in droves.

“We have people showing up that we don’t even know that say: ‘We’re here to help. What can we do?'” Austin said. “They don’t ask for anything. They don’t expect anything. They just say, ‘Whatever you want me to do, we’ll do it.'”

“It just about brings tears to my eyes,” Austin added.

The attention has led to some other acts of extraordinary generosity.

Austin said he recently got a surprised call from Virgin Galactic CEO George Whitesides offering to help him produce more devices.

“Chris, I saw what you do, and we want to help,” Whitesides said, according to Austin. “Whatever it takes.”

Austin told him he needed more machines to manufacture the devices but didn’t have the cash to pay for them. Later that day, Austin got a call from his New Jersey-based supplier.

“Somebody just paid your bill,” Austin said he was told. “They’ll be shipping tomorrow.”

With the four additional machines, Sea-Long expects to produce thousands of helmets a week. The goal is to produce 50,000 per week.

“This is the classic sort of American story,” Patel said. “It’s the little engine that could.”

Download the NBC News app for full coverage and alerts about the coronavirus outbreak

James Vanderploeg, Virgin Galactic’s chief medical officer, said the company is working with Sea-Long “to help them expand their capacity, helping with recruiting additional people and getting equipment in place and helping with the logistics and so forth — anything we can do to help them expand their throughput.” Virgin Galactic is also modeling potential prototypes for its own design of helmets used for ventilation, Vanderploeg said.

Major U.S. medical centers are now stocking up on the helmets, including Massachusetts General Hospital and the Hospital of the University of Pennsylvania. Austin said he’s also received orders from Canada, Mexico and several countries in Europe, including hard-hit Italy.

A Mass General spokesperson said the hospital has ordered five Sea-Long helmets but has not yet received them.

A Penn Health spokesperson confirmed that the hospital has ordered the devices.

With so much of the world in need and so many orders coming in at once, Austin has faced a difficult question: Whom to prioritize?

“We really look at where is the need,” Austin said. “We know New York has a stronger need. We know Boston. We know Chicago. … But we also know that we have to get what we can to Italy.”

For now, the company is shipping only a limited number helmets per order, “because we still can’t afford the volume of a huge order,” he said.

Amid the worsening pandemic, Sea-Long isn’t planning to raise the price in part because it doesn’t want to limit who has access to the devices.

“This probably sounds sappy,” Austin said, “but we think of what if that was our son or daughter or grandfather sitting there in that bed gasping for air and we have to explain to him: ‘I’m sorry. We don’t have anything for you.'”

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