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Princeton businesses received over $200M in PPP loans. Some are still struggling.

Princeton companies struggling.png
Harsimran Makkad / The Daily Princetonian

For Princeton Record Exchange owner Jon Lambert, March 21 is a date he’ll always remember. That’s when Gov. Phil Murphy signed New Jersey’s stay-at-home-order, mandating the closure of all non-essential businesses.

The executive order came just a day after the record store’s 40th anniversary.


“We opened up a bottle of champagne,” he recalled. But the very next day, Lambert shuttered his business and laid off his entire staff, including 16 full-time employees and two part-time employees.

For Lambert, his staff “really is a family.” Eight members have been there for over 20 years, he explained.

Overnight, sales plummeted to levels he had never seen before — in Lambert’s case, to a mere half of one percent of what the store was doing prior to the shutdown.

Like hundreds of businesses in the Princeton area, Lambert turned to the government for help.

The Paycheck Protection Program (PPP) is a $35 billion support package for small businesses, and was signed into law on March 27 as part of the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act, the largest stimulus bill in American history. 

On July 6, the U.S. Small Business Administration, alongside the U.S. Department of the Treasury, disclosed the names of small businesses that received loans of more than $150,000 from the Paycheck Protection Program — including 353 businesses in Princeton. The businesses included the Princeton University Store, Tower Club, McCarter Theatre,  Princeton Theological Seminary, Small World Coffee, Labyrinth Books, Jammin’ Crepes, and the Princeton Record Exchange.


Tower, an independent not-for-profit, received a PPP loan somewhere between $150,000 and $300,000 — the only eating club to receive a loan of over $150,000. All 11 of the eating clubs will be closed for the fall semester, for the first time since 1918, in light of the ongoing pandemic. 

Club Manager Jim Forkel declined to comment for this article. 

In total, businesses in Princeton received between $208.7 million and $440.25 million from 1,027 loans collectively based on the categories provided by the Department of Treasury. According to this data, 48,959 jobs were retained from the combined 1,027 loans to companies based in Princeton. 

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Pioneer Consulting Services; Above and Beyond, an organization that provides business tools and services for entrepreneurs; and the accounting and advisory firm WithumSmith+Brown PC received the largest loans, between $5 million and $10 million, resulting in a collective 1,399 retained jobs, according to government records. 

Princeton Theological Seminary and the Hun School of Princeton, a private boarding school, both received over $2 million and retained 407 and 219 jobs, respectively. 

Princeton Pi & Hoagie and the shoe store Ricchard’s, two longtime Nassau Street stores that have closed for good since the start of the pandemic, were not on the accessible list of companies receiving PPP loans.

For many of the small businesses that did receive PPP funding, the loans were essential but still far from enough.

Lambert said that reaching his retail milestone of 40 years was “almost unheard of,” especially for a record store in this day and age. 

Even before the store’s employees had “everything completely ripped out from under [them],” the emergence of streaming services and online vendors had forced the record store to adapt. The main reason for his business’ recent success — and what made the shutdown all the more devastating — was a pivot from being a “commodity-driven store” to an “event-driven store.”

“Yes, you can browse online. Yes, you can stream,” he told The Daily Princetonian in a phone interview. “But it’s rather sterile and cold, compared to that really interesting and fun experience in the treasure house and being in the stacks, talking to people with like interests, and hearing music you haven’t heard before. That whole mystique of being in a store, physically touching things, that’s the primary reason we’re still around.”

“And of course, that’s exactly what was ripped away.”

Even as he scrambled to list some of his high-priced items on Discogs — the largest aggregator of private sellers of music and a sort of “Wikipedia for musical pieces” — Lambert never saw sales beyond seven or eight percent of his usual.

He said that the limited income he was able to generate allowed his store to “limp along a little bit,” but went straight to his employees’ health insurance.

“We didn’t want to cut out health insurance in a pandemic,” he explained.

As a result, Lambert applied for a PPP loan, but was rejected in the first round. In his second attempt, he was approved for $151,500 — with strings attached.

“They were essentially saying, ‘yeah, hire your people back for eight weeks, even though you’re not open.’ And now you’re out of money,” Lambert said. “So I had this hunk of money but I didn’t have anything to do with it.”

The Princeton University Store — a not-for-profit cooperative society run by a board of students, faculty, administrators, and alumni — saw similarly devastating drops in sales.

“This is the greatest financial challenge the U-Store has faced in its 115 years of operation,” Jim Sykes, president of the University Store (U-Store), told the ‘Prince.’

The U-Store saw total sales plummet by 80 percent for the months of April, May, and June, with losses of up to 50 percent estimated for the upcoming year.

Sykes said that the U-Store’s PPP loan of approximately $330,000 has been applied to all designated options including payroll costs, rent, and utilities, but he does not anticipate the amount will cover the operating loss for last year and the expected loss for this year.

The U-Store furloughed temporary employees hired for the school year in late March, as the University sent students home for the semester. Management wage increases were cut across the board, with compensation reduced for senior staff by 10 to 20 percent, in addition to eliminating all 401(k) contributions beginning this month.

Though the 36 University Place store has remained in continuous operation, the location at 114–116 Nassau Street was closed from late March until late June.

Next door, at Labyrinth Books, the majority of the store’s $236,000 loan has gone to paying employees, according to owner Dorothea von Moltke. In March, the entire staff of Labyrinth was put on temporary furlough, which legally allowed them to remain employees and to continue receiving healthcare benefits.

“We initially had a minimal crew of part-time employees who continued to work with us as we figured out how to increase website sales, handle phone orders for delivery and then curbside pickup, and take our events programming online,” explained von Moltke.

In anticipation of the “drastically changed coursebook rush” in the fall, she said Labyrinth has been working closely with the University since April. Students studying remotely will receive their books in the mail, with the University covering up to two free shipments per student. For those returning to campus, coursebooks will be ordered exclusively online, with pickups scheduled by appointment only.

“Because the logistics of this hybrid semester are far more complex than anything we have done before and to ensure that students studying remotely get their books in a timely fashion, we will be asking all students to order their books in time-windows designated by academic year,” von Moltke added.

Amin Rizk, one of the co-owners of Jammin’ Crepes, laid off 45 of his employees, but was eventually able to rehire 10 to keep up with existing operations. Despite the fact that they are currently only generating half of last year’s sales, Rizk referred to PPP as a “life-saver” and a key element of their ability to stay afloat.

The largest loan of any organization located within Princeton’s campus went to McCarter Theater, totaling $1.2 million. Still, the theater experienced mass layoffs. 

The independent non-profit organization leases its space from the University and shares its facilities with the Lewis Center for the Arts, the Triangle Club, and the Office of the Dean of Undergraduate Students (ODUS), in addition to other campus groups.

“Our biggest challenge at the moment is to manage the extraordinary amount of change that is happening,” said Mike Rosenberg, McCarter’s managing director. “Addressing the twin pandemics of COVID-19 and racism are top priorities.”

Prior to the pandemic, the theatre maintained a staff of 74 full-time employees.

McCarter maintained employee salaries for the first nine weeks of the shutdown. But in the wake of economic difficulties and the government-mandated closure, it eventually made the decision to lay off 57 members — over three quarters — of its staff.

While its doors remain closed during the ongoing global health crisis, McCarter has pivoted to a “virtual stage,” called “McCarter@HOME,” a digital platform. Each week, the theatre emails over 80,000 patrons a menu of curated interviews, behind-the-scenes videos, and creative content.

“McCarter@HOME has allowed us to transition our education programs online where we offer a variety of weekly classes for children and adults,” Rosenberg said. “These classes have proved to be extremely popular, and we will be extending them into the fall and perhaps beyond.”

Though state guidelines prohibit McCarter from resuming public performances at this juncture, Rosenberg said he looks forward to the day when the theatre can welcome people back.

“For now, we will keep engaging with audiences, artists, and students online.”

Murphy’s executive order was finally lifted in June, allowing some businesses to resume operation with certain restrictions in place. 

For the record store, reopening meant changes, and lots of them. It meant implementing a maximum store capacity, creating plexiglass shields around the cashier counter, and formulating cleaning schedules.

It also meant uncomfortable interactions, most surrounding mask etiquette. 

“I’m running two ugly encounters, maybe six mildly uncomfortable encounters a week. Not terrible, but it’s not fun,” Lambert remarked, adding that some patrons refusing to wear masks would then give the store one-star reviews online.

“So I went to my lawyers … and now I have my script prepared,” he said. “But it’s all very alien, you know?”

For Jammin’ Crepes, the ban on eating indoors still means a limited amount of outdoor seating, available on a first-come, first-serve basis. Rizk says that they are also looking to use their food truck for “reasonably sized, COVID-safe private events” and hope to be able to bring it on campus in the fall, as they have in the past.

Even as Labyrinth brings in additional staff to process orders, von Moltke is committed to managing capacity within her store and to ensure social distancing throughout the process.

“We will ... have several days when the store is closed to the public and open only to students,” she said, adding that there will be many more days with “minimal hours” during which the store will be open to the public.

Despite the inevitable impact on non-coursebook revenue, von Moltke said that this decision was made with students’ well-being in mind.

“The priority in this period simply has to be to make sure students get their books when they need them and in a safe way,” she said.

As many businesses attempt to adapt and revolutionize their presence online, Labyrinth is no exception. A new online subscription service allows customers to sign up for new arrival alerts tailored to their fields of interest, and von Moltke said she is trying to make it as easy as possible for customers to “stay connected with the store” and shop without going in. 

In their physical location, the store has gone through a complete redesign, from a reintegration of the downstairs area, to the removal of several display tables and all chairs. A greeter in the store will ensure that all customers are wearing a mask and sanitizing their hands on their way in, while ensuring that the store capacity remains “quite a bit below the current legal limit.”

Businesses in the area are bracing for a fall like no other. 

The sudden departure of most students in March, as well as a sharp decline in tourists coming to Princeton, have already led to some drastic changes in how the U-Store operates, according to Sykes. Preparing for a fall semester with few tourists, no sporting events, and only around half of the student body on campus means it will need to adapt further.

The University Place location is currently undergoing a renovation, with a self-checkout option available starting this fall. In addition to free shopping on the online store with enhanced chat and communication options, Sykes promised “expanded food and convenience assortments” by late August.

In anticipation of the “drastic curtailing of the University’s operations,” record store owner Lambert said he remains “cautiously optimistic.” 

“We’re gonna have to wait and see,” he said. “After six weeks of being open … it’s not enough data to plan for the future.”

For Rizk, the co-owner of Jammin’ Crepes, the return of half the student body is not ideal, but certainly “better than none at all.”

“We are optimistic that Princeton University’s limited reopening plans will have a positive impact on our business,” he told the ‘Prince.’ “We have worked hard over the years to develop strong ties to the student and staff populations at Princeton University.”

Even so, Lambert said he has been overwhelmed by and is immensely appreciative of the local community’s support — especially the hundreds of individuals who purchased gift cards to his record store during the shutdown, “not knowing if we were going to open again.”

Rizk felt similarly, saying that his restaurant would not have been able to survive the effects of this pandemic without the support of the local and University community. Through gift-card purchases, payments for Zoom cooking classes, and donations to a GoFundMe campaign for Jammin’ Crepes employees — which raised $7,221 — community members buoyed the restaurant. 

Similarly, Sykes said that he is “grateful and proud” to see the outpouring of support from the hundreds of members who have “contributed to help the U-Store survive during this pandemic.”

But despite all the aid, from federal legislation and local community members, the businesses still face uncharted waters. In the words of Labyrinth’s owner, “The challenges we have faced in the past, such as the onset initially of chain bookstores and then of, pale by comparison with the challenge posed by the pandemic.”

Amid a “shocking absence of a national strategy to contain the virus,” von Moltke said she is extremely worried about what the coming months will bring as the PPP money runs dry and unemployment benefits diminish. Lawmakers have yet to reach an agreement on what the next stimulus package might look like.

Rizk advocated for a third round of PPP loans for small businesses, especially as they go into a season when “outdoor seating may not be an option.”

“This is going to be critical for survival of small, local businesses like ours,” he remarked.

“I know it’s being discussed in Washington,” he said, “[but] we … need it to happen.”

Von Moltke expressed similar uncertainty about the strict reopening parameters — and the cold weather’s impact on them. 

“But we are fortunate in lots of respects,” she continued. “To have an amazing staff, to have the support of the University, and to be in Princeton, where the municipal government and the local merchants as well as cultural institutions have been working closely from the beginning and throughout to collaborate and create the safest and most sustainable path forward.”

As a member of Princeton Mutual Aid — a network fundraising to meet individual residents’ needs during the pandemic — von Moltke placed an emphasis on housing and food insecurity in Princeton.

“I’m convinced that it won’t mean much if isolated businesses and institutions manage to survive the pandemic but the overall social and economic fabric frays,” she said.

“It has never been more obvious that a community only is as strong as its weakest link,” she added. “There are many who are working to find solutions, but I don’t think we have begun to take the full measure of the level of need among our neighbors, and we all have to commit to continue to come together for the common good.”

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