The demand for delectable vegan and gluten-free cakes is on the rise, with small businesses like Erin McKenna’s Bakery in Manhattan meeting the needs of niche dietary requirements. This cozy bakery, adorned with pink walls and an array of mouth-watering desserts, has become a go-to spot for customers like Alessandra Fabiani, who appreciate the bakery’s inclusive menu catering to various dietary restrictions.

Established in 2005, Erin McKenna’s Bakery quickly gained popularity among food-allergic, kosher vegans in New York City. McKenna’s appearance on a popular TV show further propelled her business, leading to nationwide recognition and a significant increase in orders. By 2019, McKenna expanded her business to multiple locations across the country, including New York, Los Angeles, and Disney World.

Despite her success, McKenna faced a setback when the pandemic struck, forcing her to close a newly opened store in Santa Monica, California, due to financial challenges. The burden of a hefty loan taken to fund the expansion added to her struggles, especially when faced with the prospect of high-interest rates that could potentially jeopardize her entire business.

The current economic landscape, characterized by pandemic-related disruptions, inflation, and rising labor costs, has further exacerbated the financial woes of small businesses like McKenna’s. With interest rates soaring and businesses grappling with mounting debts, the future looks uncertain for many entrepreneurs trying to navigate these challenging times.

Julia Pollak, an economist, suggests that escalating interest rates could push small businesses to the brink of bankruptcy, especially in sectors like leisure and hospitality that have been severely impacted by the pandemic. As companies face the dilemma of refinancing loans at exorbitant rates, the risk of closures and job losses looms large, painting a grim picture for the business community.

Despite the challenges, McKenna remains resilient, exploring new opportunities like a potential collaboration with Disney for its cruises. However, the financial strain persists, forcing her to make tough decisions like streamlining her menu and cutting costs to stay afloat. While the road ahead may be daunting, McKenna’s determination and entrepreneurial spirit continue to drive her forward, underscoring the resilience and adaptability of small business owners in the face of adversity.