Farmgirl Flowers CEO on How PPP “Failed” Small Businesses

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Amid public outcry and pressure from the Small Business Administration, some companies that received funding in the first round of the Paycheck Protection Program loans – including Shake Shack, Ruth’s Chris Steak House, and Potbelly Sandwich Shop – have agreed to return the money.

Meanwhile, many smaller businesses that missed out on loans in the first round are still looking for help.

Christina Stembel is the CEO and founder of a direct selling flower company called Farmgirl Flowers. She told “Marketplace” host Kai Ryssdal that the paycheck protection program “failed” companies like hers by not preventing companies with other funding sources from getting credit.

“I think it’s failing everywhere,” she said. Not only has the government failed to prevent companies that may not have needed it from getting credit, “it has also been a failure by CEOs who did not have the integrity to know that this was not set up for them was “called her.

Stembel told Ryssdal that Farmgirl Flowers only had eight weeks on the runway when San Francisco (where the company fulfills 85% to 90% of its orders) placed an order for on-site accommodation.

“With just 12 hours to shut down an entire facility, we had to throw away $ 150,000 worth of flowers, we had to take nearly 200 people off, and then I had to figure out how to turn around very quickly,” she said.

For Stembel, this meant looking to open new sales and fulfillment centers outside of San Francisco to keep the company going before its most important holiday of the year – Mother’s Day.

“This vacation gets us through the very slow summer months,” she said. “Especially since we did not get the PPP loan, we have no safety net.”

In a video message posted on the company’s YouTube and Instagram accounts, Stembel explained why bootstrapping e-commerce companies like theirs often don’t have close ties with banks. This may have made it harder for them to get a PPP loan at first, as banks gave priority to their existing customers.

If Farmgirl Flowers doesn’t get funding from the Small Business Administration, Stembel told Ryssdal that she hopes she’s creative enough to come up with another path.

But as with so many companies, the success and survival of their business depends on the health of the overall economy.

“I’m probably at my 18th pivot point now,” she said. “But you know, I don’t know what kind of recession we might get into, and it’s so much beyond my control that I can’t plan because I don’t know what it is.”

Click the audio player above to hear the interview.

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