The COVID-19 pandemic has been a problem in the country for more than half a year now. A lot of states in the US have been in lockdown since March, with some, like Mississippi and Nevada, easing their stay-at-home restrictions. Apart from a health crisis, the pandemic also created an economic emergency.
Small businesses everywhere either have to work from home and sell their goods solely online, operate in a limited capacity, or shut down entirely.
Small businesses troubles during the pandemic
A study of over 5,800 small businesses in America during the early days of COVID-19 found that over 43 percent of them needed to temporarily close. The paper, published in the Proceedings of the National Academy of Sciences of the United States of America (PNAS), also saw that almost all owners cited the pandemic being the main reason for their closure.
Specific causes include reductions in customer demand and worker health concerns. Because a lot of businesses aren’t making money, on average, companies reduced their active employees by 39 percent.
Employment declines also depended on the area and industry. The researchers saw that over 54 percent of businesses in the Mid-Atlantic region closed and employment decreased by 47 percent. Industries, like the arts, personal services, hospitality and food services also saw a 50 percent decline in employment.
How to Find Financial Assistance During a Pandemic
Local businesses like yours are vital to your local economy. Your work brings innovation and growth in your community by providing new products and services. You’re also helping in growing your area’s economy by providing employment opportunities.
You have customers to serve and a workforce counting on you for compensation and benefits. If you’re one of the owners having trouble keeping your business profitable because of COVID-19, there are a lot of viable options for you to keep your company afloat.
If you’re having trouble getting business loans approved from traditional banks or still working with your captive insurance attorney to make sure you comply with IRS standards. A variety of companies and organizations are offering help to local businesses grow or get back on their feet, granted that you fit their requirements.
- Verizon Small Business Recovery Fund – The telecommunications company saw that small businesses would need help with their finances during these unprecedented times. This is why it put down a $7.5 million investment in the Local Initiatives Support Corporation to create the Verizon Small Business Recovery Fund. It granted up to 777 minority-owned SMEs so far with $10,000 each.
- Hello Alice – This is a website that provides small companies with free resources for growth. It recently launched its Business For All Emergency Grant. It gained support from eBay, Silicon Valley Bank, and Verizon to provide $10,000 in emergency funds for businesses affected by COVID-19. You need to complete a grant application to get immediate support.
- Moms as Entrepreneurs – Moms as Entrepreneurs is a nonprofit organization that’s dedicated to incubating businesses by mothers. It recently started a pandemic relief fund for mom-owned companies, which grant about $500 to $1000.
There are a variety of government-backed funding options available for all types of small businesses. These include:
- Economic Injury Disaster Loans (EIDL) – The U.S. Small Business Administration (SBA) helps businesses deal with the financial effects of the COVID-19 pandemic with the EIDL program. Its purpose is to help companies pay for operating expenses and other financial obligations that they could have paid for if the recent disaster had not happened. These include employee paychecks, the continuation of worker benefits, utilities and rent.
The EIDL can provide up to $2 million to a business to help them in times of disaster. Its terms include a fixed interest rate of 3.75 percent for businesses and 2.75 percent for nonprofits. Its maximum loan length is 30 years and there are no penalties for pre-payment.
- Paycheck Protection Program (PPP) – This is part of the government’s $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act. Over $659 billion is allocated towards this program. It’s for small businesses with 500 or fewer workers. Sole proprietorships, non-profits, tribal concerns, self-employed people, and veterans organizations are also eligible.
Loans for the PPP are forgivable when used on paychecks, rent, utilities and company mortgage. Unfortunately, this program expired in August. But with the pandemic continuing to create economic damage, it’s only a matter of time before it’s renewed or replaced with a similar scheme.
Local businesses like yours are the bastions of their community’s economy, providing innovative new products and services, and offering employment for citizens. If you’re having trouble keeping profits up during the pandemic, a variety of government and private grants will be able to help you. Use these funds honestly and wisely and your business will get back on its feet in no time.