Small businesses in the U.S. are having to navigate new issues like never before. The Coronavirus pandemic is creating significant disruptions to both supply chains and demand. Some of my clients have been forced to close their doors due to area-wide quarantines, while others are seeing orders stop and work not getting done. The impact of this outbreak will most likely last for months. That’s the bad news. But if you’re a small business, the good news is there are at least ten areas you can turn to for help. Here are the resources I’m relying on for my small business:
1. News Sites
I’m interested in unbiased, factual news that will help me figure out what’s going on and what steps to take to protect my business and employees. Of course you can find continuous updates on most of the major sites like The New York Times and CNN, but I’ve been relying even more on the Center for Disease Control’s website. The AP News site is also very straightforward and timely. And one you might not think to go to is LinkedIn – they’ve put together a great site with news and other information.
2. Small Business Administration Loans
The Small Business Administration is offering direct Economic Injury Disaster Loans for up to $2 million with interest rates ranging from 2.75% to 3.75% depending on the nature of the organization. The funds can be used to pay debts, payroll, payables and other operating costs for your business. The loans can be paid back over as many as 30 years and payment periods are negotiated on a case by case basis. The SBA is also making available a $10,000 “advance” on the Economic Injury Disaster Loans for all applications and the advance will be forgiven if the loan application is rejected. If you have received money under an SBA program in the past you can also quickly apply for an SBA Express Loan for up to $25,000.
3. Federal Relief
The Federal government passed the CARES Act in late March and part of that act includes $350 billion set aside to help small businesses through its Payroll Protection Program. The program allows small businesses to borrow up to $10 million (using a formula based on a multiple of historical payroll) and receive forgiveness for any amounts used over an 8 week period for payroll, rent, utilities and mortgage interest. The loans come through a bank, which are guaranteed by the Small Business Administration. Any amounts left outstanding must be paid back within two years and carry a one percent annual interest rate. If you’re looking for a loan calculator, The American Institute of Certified Public Accountants has helpful resources.
4 . Internal Revenue Service
To alleviate the burden of this pandemic, the IRS has announced an extension in tax filings for 90 days for most taxpayers. More tax relief is likely on the way, particularly regarding the tax credits mentioned above. To stay current, be sure to check in regularly on the IRS and Treasury Department’s Coronavirus updates, available on their websites.
5. State Updates
Most restrictions on commerce have been handled locally, which means that it’s imperative for business owners to check frequently with their states’ websites for updates. For example, California’s Department of Industrial Relations gives very detailed guidance on the state’s paid and sick leave requirements, which differ (like many other states) from federal rules. New York State has continued to update their residents regularly as they’ve dramatically reduced the number of businesses allowed to stay open and implemented more rules for workers who need to take time off. Pennsylvania is tracking the number of Coronavirus cases in its commonwealth and providing both employers and residents rules and guidance. Here’s a helpful listing of every state’s Coronavirus site to help you figure out what local rules apply to you.
6. Chambers of Commerce and Business Groups
Business groups around the country are pitching in to help their members through this crisis. The U.S. Chamber of Commerce has an excellent “toolkit” that provides graphics and messages you can use to communicate with your employees. The National Federation of Independent Businesses is providing live updates of legislation that will affect its members. Local chambers of commerce, like Michigan and Florida, have also set up informational sites about the pandemic that are geared specifically for members in their regions. Indiana’s IndyChamber is offering webinars, updates, answers to frequently asked questions and legal support. If you’re a merchant or restaurateur, it’s imperative to visit the Coronavirus sites that have been setup by the National Retail Federation and National Restaurant Association. These sites are full of helpful information specifically geared to your industries, and also include links to other sites that provide advice for cleanliness and safety.
7. SCORE Counselors and SBDC
Both SCORE and the U.S. Small Business Development Centers are affiliated with the Small Business Administration and provide no-cost consulting and other resources for small businesses. These organizations offer Coronavirus resources on their websites, but I think the best way to leverage them is to call on their counselors and consultants for tactical advice to help navigate you through this crisis. Many of the people working for SCORE have provided expert assistance for small businesses for years, and now is certainly a good time to tap into that experience.
Different than the 2009 economic crisis, this outbreak hasn’t yet caused a slowdown in capital availability. Many of my clients have reported that their bankers have proactively been reaching out to offer help. Large banks, as well as local independent and community banks, are offering assistance to their small business customers such as extended terms, more credit and even debt relief. My advice is to reach out to your bank and find out how they can help you through any potential cash crunch caused by this crisis. Here’s a great list of some of the largest banks and what they’re doing to pitch in.
9. Other Loans
Some local non-profit firms, like Empowering Small Business in Massachusetts or the Carolina Small Business Development Fund, have set up capital resources to help local small businesses recover from the crisis. States like Massachusetts, Florida and New Mexico have created special loan programs to assist their small businesses. Online lenders like Kabbage are offering innovative programs where people can contribute gifts to small businesses. More states and nonprofits are offering help every day, so be sure to keep an eye out.
10. Corporate America
Big companies are pitching in to help small businesses. Facebook is offering $100 million in cash grants and ad credits to help small businesses drum up demand. Microsoft, Google, Zoom and Slack are giving out free (or significantly reduced) licenses to companies that need their technology for managing the increasing numbers of work-from-home employees. Amazon has established a relief fund for Seattle small businesses and is also offering free rent at its offices. Shark Tank entrepreneur Mark Cuban announced that his employees will be reimbursed for any lunch and coffee purchases from local, independent small businesses.
Of course, none of these resources by themselves will ease the pain of this economic downturn, but a few may help. I believe this is a short term challenge and the goal is to survive all that’s thrown at us until this situation gets behind us and we can get back to business.