Maine small businesses are reeling as revenue evaporates amid the state’s aggressive measures to control the spread of coronavirus and policymakers scramble to provide financial assistance and ward off economic catastrophe.

Restaurants, bars and retailers across the state have curtailed operations or shut down entirely as residents increasingly stay home and towns and cities enact curfews.

Christian Hayes, who owns The Garrison restaurant and Dandelion catering in Yarmouth, planned to serve only take-out this week in an attempt to save his business. It’s been a tough winter, and he initially borrowed hundreds of thousands of dollars to open the restaurant last summer.

Hayes had to lay off his restaurant staff, at least 11 people, in the last few days. He was was cooking alone Tuesday when he learned the enforcement arm of Maine Revenue Services might close the business for unpaid sales taxes.

“Chopped” winning chef Christian Hayes, right, works in the kitchen of his new Yarmouth restaurant, The Garrison, last summer. A drop in business because of coronavirus concerns, coupled with financial pressures, prompted Hayes to lay off his staff of 11. Other small businesses are in similar straits as they try to navigate the impact of the pandemic. Kate Irish Collins / The Forecaster

Maine Revenue Services did not respond to an interview request asking about its current tax enforcement policy.

“It made me feel like, ‘What am I even doing here?’ I just sat on the floor and cried,” Hayes said. “I don’t know what else to do, that was the ultimate – I felt like a fool for even trying to survive at this point.”


The economic reverberations of the coronavirus pandemic have hit a broad swath of small and independent businesses in Maine and across the country.

Measures designed to slow the virus’s spread by asking people to stay at home and out of public have had an immediate impact on the state’s mammoth food and beverage industry, and have sent ripples through varied businesses such as farms, barber shops and salons, law firms, medical offices and many more, as well.

Threats to Maine’s service businesses and tourism industry prompted Sen. Susan Collins, R-Maine, to draft a plan for forgivable business loans strictly to cover payroll.

In an interview, Collins said she has worked with Sen. Mark Rubio, R-Florida, on the proposal, and Treasury Secretary Steven Mnuchin has reacted positively to it.

The proposal, which may go into a new stimulus bill, would provide a critical infusion of capital to small businesses and help prevent an unemployment tsunami, Collins said.

“I am very concerned that if we do not act quickly to provide cash assistance to small businesses they will have no choice (but) to lay off their employees,” she said. “My goal is to prevent what I believe could be massive layoffs of literally millions of workers because the businesses for which they work have no revenue coming in.”



In Maine, companies with fewer than 100 employees account for about 99 percent of all businesses, according to a 2019 profile from the Small Business Administration. More than 289,000 Mainers, more than 56 percent of the state’s workforce, work at small companies.

On Monday, more than 200 small businesses, including many breweries and restaurants as well as retail, service and other industries, wrote to Gov. Janet Mills asking the state to consider deferring debt payments or make no-interest loans available to keep them afloat.

Many businesses with 20 or fewer employees are vulnerable to economic shocks, said Dana Connors, president of the Maine State Chamber of Commerce.

“Your small businesses typically do live on the edge, they live on very small margins, don’t have a large base of reserves to weather storms,” Connors said.

“Here is an example that goes beyond the norm, this really puts them in jeopardy of really causing hardship – the extent of it could force bankruptcy or put them out of business totally.”


Foundation Brewery, on Industrial Way in Portland, like many other breweries in Southern Maine, has closed its taproom to the public and sells canned beer for take-out only.

The economic standstill has come at the worst possible time, owner John Bonney said. January and February are slow times for sales, but March is when beer making ramps up, orders increase and companies get ready for the summer season.

Foundation had an instant drop-off in demand for its beer from out-of-state distributors as reaction to the coronavirus spread. Consequently, it is scaling back its brewing this week, Bonney said.

Foundation Brewing saw a dramatic drop-off in out-of-state sales as soon as reaction to the coronavirus spread. Photo by Carla Jean Lauter

He plans to keep all 16 staff paid and ride the crisis out as long as possible, but it is unclear if social distancing and closures will last a few weeks, a month or longer.

“What we have right now is there is so much unknown that it is causing paralysis within the industry,” Bonney said.

“If this all becomes not a big deal in the next couple weeks, then OK, it is a bump in the road,” he said. “If this goes on longer than a couple weeks, it is definitely going to impact folks.”



Farmers dependent on selling products at the state’s many farmers markets are also on edge.

Abby Sadauckas, who owns Apple Creek Farm in Bowdoinham with her fiance, said 90 percent of their business comes from in-person sales at farmers markets.

It’s unclear if those markets will still be able to stay open, Sadauckas said. Many of her customers are vulnerable to severe cases of COVID-19, the respiratory disease caused by coronavirus. Her business, raising organic eggs, chicken and beef, also relies on sales to tourists, which may not arrive in their typical droves this summer.

That could make it hard to keep paying the mortgage on 75 acres of her farmland and hire a critical summer employee, Sadauckas said. She and local farmers are trying to set up an online marketplace and get at-farm sales started, but everything is uncertain.

“If the impacts of this continue and persist into May and we lose our market season it will be very, very detrimental to our business.”


Knack Factory, a Portland-based video production and communications firm, was forced to lay off its three full-time employees as clients delayed or dropped projects.

“Every client we have, in one way or another, saw the impact of this coming and pulled back,” said Alex Steed, co-founder of the company. “It was just crazy dominoes – every contract on indefinite hold.”

Steed said he felt the economy was due for a cooling off, but the pandemic deepened the economic slump he foresaw.

“We prepared for a rainy day, but not a nuclear winter,” he said.


Tom Gangewer, principal at Local Economy Payroll in Portland, said businesses are scrambling because they don’t know what’s to come.


Restaurants are shuttering, manufacturers are reevaluating business and everyone is looking to the government to take decisive steps, Gangewer said.

On Monday, the Small Business Administration approved a request from Mills to open low-interest emergency loans to small businesses to pay for payroll and other business costs.

“If we all knew it was two weeks, with a little help from the SBA we could make a go of it,” Gangewer said. “There are some businesses that can absorb two weeks and there are others that can’t. Closing for a month is very difficult for most small businesses to imagine.”

The SBA emergency loans of up to $2 million are available to most companies to cover essential business functions. Long-term loans of up to 30 years have a 3.75 fixed interest rate for businesses and 2.75 percent for nonprofits.

Maine was one of the first states in the country to request assistance from the loans; businesses can begin applying immediately, Regional Administrator Wendell Davis said.

However, even with an expedited online loan process, it can be weeks before money becomes available. There are some restrictions, but Davis encouraged all businesses to contact the SBA and ask.


Maine’s community banks also are moving to reduce businesses’ debt burden by restructuring loans or payments. Bangor Savings Bank is constructing new low-interest, fast-application loans to help employers bridge this economic crisis, CEO Bob Montgomery-Rice said.

State agencies are working on other financial tools to assist businesses caught in the crisis that may be released later this week.

“I would always encourage every business or consumer, if they feel they are going to have problems, reach out to their banker and talk,” Montgomery-Rice said.

He said the financial sector luckily entered this crisis in a strong and stable position and has the resources to keep banking services running and provide assistance.

“I think the system was in good shape. I think there is going to be some pain, but the system is prepared to handle it.”

Staff Writer Edward D. Murphy contributed to this report. 

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