As businesses across the country face today’s repayment deadline to qualify for partial forgiveness of pandemic-related loans, one business owner is crediting her survival to “an angel.”
When Julia Foley opened her business six years ago, she expected to face hardship. But despite warnings that “the first five years are the toughest,” she said the last three have been “quadruple” the difficulty.
Owner of Julia Foley Events Inc., Foley originally ran an event-planning business, bridal boutique and event venue in Perth. Now, when she looks back on the years since the pandemic, she can’t believe how much things have changed.
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When the pandemic hit, the wedding industry saw clients cancel and postpone their big days. As a result, Foley closed her event-planning and venue business. In May 2020, she tapped into the Regional Relief and Recovery Fund (RRRF), an equivalent to the Canada Emergency Business Account (CEBA) loans made available to businesses during the pandemic.
Foley used the $60,000 to pay back deposits to clients who had cancelled their weddings and to pay the fees associated with closing portions of her own business.
The only portion remaining, Ever After Bridal Boutique, barely allowed her to stay afloat.
“There was no benefit to Ever After. I couldn’t (use the loan) to (build up) the bridal store and grow at all, it just kept my head above water,” Foley explained. “It just allowed me to survive.”
Through the pandemic, Foley said she did what she could to survive, taking courses in social media, offering online services, and paying her staff out of her own pocket. In October 2023, she finally had to lay off most of her staff. She says she hasn’t paid herself since the pandemic started.
Given the restrictions for in-person gatherings, elaborate weddings simply weren’t possible, let alone a bridal party showing up at Ever After to shop in-person.
“People weren’t buying dresses online because they wanted to come in, they wanted that experience of saying yes to the dress with their friends and family. I tried (an online store) and it just didn’t work,” explained Foley. “(Clients) were stressed also. I had girls getting married and they didn’t care who was there but they needed a dress.
“I couldn’t take them into the store. So I rented the conference room at the local hotel, trucked the dresses there, only half a block away, and set up appointments.”
Brides were permitted to bring one person with them to their appointment and Foley was only able to offer the in-person shopping experience to select brides.
“The hotel gave me a bargain for renting because they were struggling as well with no events, so there was that small-town mentality. It’s really what helped me through 2021,” Foley said. “I didn’t do it for everyone, just those last-minute brides who needed something to wear down the aisle to get married with three people in a backyard.”
Not in a position to repay the RRRF
But despite her creative solutions and an industry almost back to normal, Foley said she wasn’t in a sustainable position, let alone one of growth. So as she watched the CEBA/RRRF repayment deadlines approach, she wasn’t sure if she’d be able to make it.
Nearly 900,000 organizations applied for and received a CEBA loan during the COVID-19 pandemic. A total of $49.2 billion was disbursed through the program, which offered up to $60,000 in interest-free loans to help businesses and non-profits survive pandemic-related shutdowns and slowdowns. Up to one-third of the loan can be forgiven if businesses pay back the outstanding amount by today’s deadline.
Businesses that miss the deadline lose out on the forgivable portion of the loan and see their debt converted to a three-year loan with interest of five per cent annually. Businesses were also offered the chance to refinance their loans with a financial institution. Those that did were given until March 28, 2024, to get that in order and be eligible for the forgivable portion of the loan.
Foley didn’t have the money on-hand to repay in full, but said she tried refinancing with her bank.
“The problem is that not a lot of businesses have a lot of income themselves, so even if they tried to get financing, they couldn’t, because they had no income,” she said. “Banks weren’t helpful for loans or line of credit because there was not enough income.
“So it was very stressful … the pressure of either $40,000 today, or a loan at $60,000 tomorrow,” she continued. “No bank could help me, even though I have investments and was willing to cash in all my RRSPs, because I didn’t have enough income.”
In the end, it “came down to the dime.” At 4:30 p.m. yesterday, the day before the deadline, Foley secured a private loan from a supportive individual and was able to pay off the $40,000.
“There was absolutely no way I could see myself affording what they wanted in the next few years, paying the interest to pay back that loan without the forgiveness … I was sitting there thinking, ‘Can I do a blow-out sale on all my inventory? How long will that hold me over?’” she said. “I wasn’t necessarily thinking about bankruptcy, but closing or selling had come up.
“Thankfully, I had an angel come into my life and make that happen for me,” Foley continued. “Without that angel, I don’t know what I would have done. I was running to the bank at 4:30 p.m. last night.”
Community generosity came through
Looking ahead, Foley said she’s “full of thankfulness.” The private loan has an open payment plan, so Foley said she’ll be able to pay it back on her own terms. She’ll also be “getting her hands dirty” as the sole employee at Ever After until she can afford to hire staff again.
“We haven’t reached the new normal as of yet because of where we are right now with the recession and people are tight with their money, but they still want to get married,” she said.
She admits her current situation is better than the alternative.
“I did fear I’d have to close,” Foley said. “And I know in my little town there are people that will close their doors in the next month.
“But really, the stress, the anxiety, the pressure of all of this … if I’d had an extension to the end of this year, I could have done it, but they couldn’t give us that,” she said.
Ultimately, Foley said she credits the appearance of her angel to community generosity and her willingness to share her struggles and experiences. While many business owners might hesitate to share their financial troubles, Foley said that talking freely about the challenges facing Ever After is “absolutely” what led to the private loan.
“People are too scared to do that, but it’s OK to say you aren’t doing OK. It should be the first thought, ‘How can I help?’” she said “Be an ear, and that helps. There is huge weight and value in that.”
