In 27 years running The Rochester Hotel and The Leland House, Kirk Komick said dealing with COVID-19 is by far the toughest environment he’s ever faced.

Joe Lloyd, owner of Durango Joes Coffee, is eating through his cash reserves to keep his employees on the payroll, even with 25% of his employees, mostly college students, leaving Durango to return to their parents’ homes across the country. All his stores remain open, but if COVID-19’s dine-in ban and stay-at-home orders remain in place, at the end of April he anticipates he’ll have to start closing stores.

Dave Woodruff, general manager of El Moro Spirits and Tavern, tried to keep the restaurant open at the onset of the dine-in ban, but the restaurant, more known for its sit-down fine dining, lacked the sales volume it needed from take-out orders and closed its doors about a week into the dine-in ban.

Woodruff, who also serves as president of the Durango chapter of the Colorado Restaurant Association, said it’s not out of the question that 10% to 20% of Durango’s restaurants will be unable to open their doors on April 17, when the dine-in ban is scheduled to be lifted.

“Restaurants work on a 1 to 6% margin nationally. In Durango, maybe some restaurants operate on an 8 to 10% margin,” Woodruff said, “It takes two to five years for a restaurant to become profitable. You’re opening at a loss if you’re a new restaurant. What you’re doing is building your business. For a new restaurant, this is incredibly tough. Some of them are not going to come back.”

While it’s clear small businesses, especially restaurants and inns, still face a steep climb before the path to escape COVID-19 restrictions eases, the nature of relief is coming into focus.

Eric Eicher, president of Alpine Bank in Durango, said Alpine has put in place a three month loan-deferral program for its small-business and consumer loans. The deferrals were made possible by state and federal bank regulators that have eased up on regulations for capital requirements and loan delinquencies even before President Donald Trump signed a $2.2 trillion coronavirus relief bill on March 27.

Even better news, Eicher said, is that Alpine is not alone in adopting some type of loan-deferral program: “We’re not alone. Virtually everyone I’ve talked to has said their bank has adopted a similar (loan-deferral) program.”

It’s too early to tell how many customers will need to use the loan-deferral program, but Eicher anticipated restaurateurs and innkeepers would be among the first business users to seek loan deferrals. Alpine’s loan-deferral program, he said, is open to almost all of its commercial and consumer loan clients.

Woodruff said perhaps the best relief restaurants might get during the crisis is payments from business interruption insurance policies. Unfortunately, most business interruption insurance includes clauses that do not cover losses stemming from viral pandemics.

Woodruff suggests federal legislation that would provide “bailout” funds to insurance companies to pay business interruption insurance to restaurants to cover losses taken during the COVID-19 outbreak.

“It would be easier to bail out a dozen or 20 insurance companies than to bail out millions of restaurants across the country,” he said.

First Southwest Community Fund has established a COVID Emergency Loan Fund to offer $5,000 to $10,000 low-interest loans at 2.5% interest rate to nonprofits affected by the crisis. The loans are designed to help nonprofits continue operating.

Region 9 Economic Development District of Southwest Colorado is offering low-interest disaster-assistance loans of between $1,000 and $10,00 to cover essential business expenses such as payroll, rent and utilities. The loans have a three month draw down period and are 0% interest if paid back in less than six months and 1% interest if paid back within six to 12 months.

Region 9’s Executive Committee approved the use of much of its unrestricted loan funding for providing emergency funds to businesses in the form of deferred and low interest loans for businesses closed or services impacted by COVID, said Region 9 Director Laura Lewis Marchino.

Brian Ross, deputy director of Region 9, said $125,000 is now allocated for the disaster-assistance loans. “That’s only a drop in the bucket to start,” Ross said. He added he was hopeful passage of the Coronavirus Aid, Relief and Economic Security Act, or CARES Act, by President Donald Trump on March 27, will include new funding to bolster Region 9’s disaster-assistance loan fund.

“Loans aren’t right for all businesses. They’re not always the best option when you’re struggling as a company. They’re just a tool,” Ross said. “We’re encouraging all business owners to talk with their vendors, their landlords, their lenders. Keep the lines of communication open, and this will end eventually and we will move forward.”

Region 9 also has been approved by the state for an emergency Enterprise Zone Contribution Project to take donations that will go directly to help small businesses.

Donations to Region 9’s Enterprise Zone Contribution Project, will go to Region 9’s Business Support Fund to help businesses in La Plata, Montezuma, San Juan, Dolores and Archuleta counties. Region 9 is collaborating the Community Foundation Serving Southwest Colorado and the Community Emergency Relief Fund to provide assistance for individuals, small businesses and nonprofits that have suffered losses during the COVID-19 pandemic.

Region 9 also is compiling resources for small businesses as it learns about them on its homepage at www.scan.org.

The CARES Act signed by Trump provides the following assistance to small businesses:

A $350 billion forgivable loan program designed to ensure that small businesses do not lay off employees.A 50% refundable payroll tax credit on worker wages to offer incentives to businesses, including ones with fewer than 500 employees, to retain workers.Looser net operating loss-reduction rules that will allow businesses to offset more losses.A delay in employer-side payroll taxes for Social Security until 2021 and 2022.Sole proprietors and other self-employed workers could be eligible for the expanded unemployment-insurance benefits the bill provides.A portion of the $425 billion in funds appropriated for the Federal Reserve’s credit facilities will target small businesses.Komick remains optimistic that on the other side of the COVID-19 restrictions Durango will be well-placed to see its tourism sector rebound with more vigor than many other tourist destinations.

“We’re pretty confident that at some point, perhaps by the end of summer, there will probably be strong travel demand from people who probably had planned to go to Europe or had planned to go on a cruise, and they might not feel like going on a cruise anymore.

“And they might not feel comfortable getting into an airplane, but we’re such a very strong drive market for so many people, and they will probably want to get in to enjoy the outdoors,” he said.

While small businesses face many issues ahead, Lloyd said, his biggest concern is for his employees.

“I have a lot of employees who are in their early 20s. They’re young, and there’s a lot we don’t know about this. They fear the unknown,” he said. “We’re working hard to make sure everyone stays calm and is in good spirits. Because we will get through this.”

parmijo@durangoherald.com This article has been updated to note that First Southwest Community Fund has established a COVID Emergency Loan Fund.