In our last post, we discussed some of the tools available to small businesses that have been adversely financially impacted by COVID-19. This topic is extremely important to us at Saddock Advisory. We know that small businesses are the backbone of our society, and we know how hard this pandemic has been on so many of them. And unfortunately, there are still many difficulties to overcome in the months ahead. So, today we’ll discuss more resources available to small businesses during these trying times.
More Possibilities for Protecting Your Employees and Paychecks
In our latest post, we discussed the CARES Act, the Paycheck Protection Program and several Small Business Administration Loans available.
In this post, we will broaden our discussion to also talk about tips and resources for how to handle these very strange times as a small business owner. We will also provide an overview (with some specific examples) of financial resources – from grants to loans – available at the state and local level. We highly recommend looking into the local COVID-19 resources available in your area. Thankfully, many areas have set up very helpful programs.
First, we want to highlight the beneficial resource that is America’s SBDC (Small Business Development Centers). America’s SBDC works in partnership with the SBA (Small Business Administration). As we discussed last time, the SBA is the government entity acting as a lender for many federal loans available as a result of the coronavirus for small business relief.
In addition, America’s SBDC acts on behalf of almost 1,000 small business development centers nationwide (so it is very likely that there is one near you). As such, it continually provides free business resources and support, and especially now. They are guaranteed to know about the different COVID-19 related grants and loans available for small businesses in your area.
They are also a fountain of knowledge when it comes to the various types of loans offered by the SBA. And as a bonus, they offer free webinars with information on policy and resource updates pertaining to the COVID-19 pandemic.
What Should You Do?
Next, we thought it might be helpful to offer some advice on how to begin to handle this new reality as a business owner.
The number one priority, of course, is looking out for your employees. For many of you, the best way to do that is likely to apply for some sort of coronavirus-related loan or grant. If you are still able to keep employees on payroll, it’s important to stay up to date with current federal guidelines pertaining to pay for COVID-related sick and personal leave. And of course, try to make it possible for both you and your employees to work from home.
This brings up another key point for small business owners during this pandemic: technology. Now more than ever, technology is critical to being a business leader in almost any industry sector. You will have to make it a priority to finding and utilize the appropriate technologies to conduct work online for the foreseeable future.
And lastly, think about your clients. It is likely that the services you provide will be different from before the pandemic. As a result, you may have to make some adjustments on your deliverables. We recommend taking time and reflecting on the changes this coronavirus is forcing you to make to your business model. Luckily, doing so will really benefit you in the long term, as change is inevitable. We just did not expect to have to change everything so quickly.
Why It’s Important to Protect Your Business
Just to put this in perspective, according to the U.S. Small Business Administration’s Office of Advocacy, in 2019 small businesses made up 99.9% of businesses in the United States. Additionally, they accounted for 47.3% of U.S. employees (that’s 59.9 million employees and 30.7 million small businesses).
All this to say, small businesses matter a great deal to this country. And local, state, and federal governments have a very vested interest in helping small businesses to get through this pandemic.
What follows are several examples of initiatives to provide relief to small businesses at the state and local level. If your area isn’t touched on below, feel free to reach out to us (add link) and we are more than happy to help you figure out what resources are available to your business.
Local support for businesses
Municipal and state governments have created programs to provide loan guarantees and grants to small businesses ranging anywhere from $500 in assistance to $1 million in assistance.
At the state and local level, the definition of “small business” is often different than at the federal level. New York City, for instance, is offering a grant to cover 40% of payroll costs for two months to businesses with fewer than five employees. Another New York City initiative offers zero-interest loans of up to $75,000 for businesses with fewer than 100 employees.
There are more examples of initiatives for business owners seeking support. Wisconsin has initiated a $5 million grant program to give businesses with fewer than 20 employees up to $20,000 each. And Alabama is offering six month long, zero-interest loans of up to $25,000 to businesses with fewer than 50 employees.
Loans, banks, and deferring payments
Some local governments have come up with very creative initiatives to help their workforce. North Dakota has developed a loan program offering up to $1 million loans under market rate for primary sector companies. New York has allowed small businesses to defer paying certain insurance premiums for two months if they are struggling due to coronavirus.
Arizona is working with state banks to establish an agreement to protect small businesses from eviction and foreclosure. A loan program in California provides loans anywhere from $500-$10,000 to low-wealth business owners in disaster areas. California has also allocated $10 million of public funding for businesses to provide an additional five days of sick leave to their employees. An organization in Louisiana is starting a fund to provide relief to gig economy workers affected by COVID-19.
Even for the food and hospitality industry
Many initiatives are focused on businesses in the food and hospitality industry that have been disproportionately affected by the coronavirus pandemic.
- Colorado has created a $4 million relief fund prioritizing small businesses in the food industry.
- South Carolina is allowing bars and restaurants to delay or avoid hospitality tax payments through the end of June.
- Delaware’s hospitality loan program provides zero-interest loans to small businesses in the hospitality industry of up to $10,000 per month.
- Illinois has established an emergency grant program for hospitality businesses, giving away $14 million total.
Grants for small businesses
And if you’re not quite ready to commit to taking out a loan – even if it is zero-interest – many states are offering grant programs as well.
- An organization in Denver, Colorado is offering cash grants of up to $7,500 for small businesses.
- A program in Kansas is offering up to $2 million total to small businesses in need of emergency grants.
- A small business relief fund in Michigan is supplying up to $20 million in grants to businesses in need.
- Nebraska and New Jersey both have grant money available to small businesses adversely impacted by COVID-19.
- Hillsboro, Oregon is offering grants of up to $5,000 for small businesses in their town.
- Washington state has developed a grant program providing up to $10,000 to small businesses in need of assistance.
And the list goes on and on. This is hardly a comprehensive review of funding opportunities available, but our hope is that it provides a glimpse into the types of options that are out there for small businesses. States, the federal government, local organizations and even national, for-profit companies are offering assistance ranging from $500 grants to $1 million loans. Some opportunities are for a period of 60 days, others are for 60 months.
If one or more of these financial options caught your eye, we’d be more than happy to talk it over with you (link). With more support and funding available in the coming weeks, chances are that there is an option that works well for your business.
We Can Help
We know the challenges of owning a business, and now is a critical turning point for most. But that’s why we aim to be as open and available as possible. We hope that this post shed some light on an intimidating subject.
The Saddock Advisory team invites you to get in touch with us so you can learn more about our history, our services, and how we can help you! Fill out our contact form here and we’ll be in touch shortly.