Last updated on September 8th, 2023
Generally, small businesses don’t have the financial reservoir that can help them survive for long especially when a pandemic like COVID-19 strikes. Entrepreneurs have personal savings that barely last for a few months even for themselves. So, they can’t pay salaries to employees which compels them to fire their existing employees from jobs. Fortunately, there are many financial resources available that can help them to combat such a crisis.
Small businesses are the backbone of any country’s economy, including the U.S. Nearly half of the population in the U.S work or own small businesses.
Karen G. Mills, a senior fellow at Harvard Business School and former administrator of the U.S. The Small Business Administration said, “Half the people who work in this country own or work for a small business. So that’s half of our jobs,”
After the markets and public places deserted due to COVID-19 impact, business owners are suffering huge losses. Their little savings are no more effective to keep with a wide range of payments to survive.
According to the Harvard Business Review, franchising is bound to lose 26,500 small businesses due to coronavirus outbreak alone. Brick and mortar businesses such as restaurants have to spend heavily on high overhead costs.
They need to spend money on rent, taxes, fixtures, dept, utilities, service contracts, payroll, insurance, and other things. Many such businesses are forced to take unwanted hard steps such as laying off staff.
But, fortunately, government and private companies, individuals, and organizations have come forward to help small businesses with funds and other kinds of assistance.
Here Is The Key List Of Financial Resources That Small Businesses Can Explore To Beat Such Crisis Without Affecting The Most Valuable Assets Called Employees
01. Get The Federal Government Loan
The U.S federal government has created a relief package under its new Coronavirus Aid, Relief, and Economic Security Act. The Act created a $350 billion loan program to provide financial assistance to small businesses with fewer than 500 employees.
These employees include self-employed, sole proprietors, and independent contractors. With the loan, a small business can meet expenses toward payroll, utilities, insurance premiums, etc. Such businesses can get a loan assistance of up to $10 million.
The federal government has responded by offering tax relief to small businesses. They can get employee retention tax credit. They also are eligible for a refundable 50% tax credit on wages up to $10, 000 per employee.
02. Find Out Loans From Your Cities
Not only the federal government, but your city might also be providing loans to small businesses. For instance, New York was planning to offer interest-free loans to the businesses reeling under the crisis. Those businesses having fewer than 100 employees will be offered loans.
Then, some cities are offering grants of up to $6000 for businesses that had fewer than five employees. Such loans are also available to the freelancers from their Small Business Administration office.
03. Avail Loans From Small Business Administration
The SBA has come out with loan programs, especially because of the coronavirus outbreak.
Here Is The List:
i. SBA Disaster Assistance Loans
Small businesses can access low-interest loans of up to $2 million to mitigate the impact of COVID-19. They can use the funds to cover expenses such as rent, utility bills, payroll, payments to independent contractors, and fixtures.
ii. SBA-Backed Paycheck Protection Program Loans (which will be from your bank)
Small business owners can convert these loans into grants so that they do not have to pay back. These are useful loans to meet expenses like payroll and rent. Private lenders, backed by SBA, will provide you these loans.
iii. Economic Injury Disaster Loans And Loan Advance
Small businesses can also apply for the SBA Economic Injury Disaster Loan. They can take a loan of up to $2 million to overcome the loss of revenue due to the COVID-19 outbreak. Businesses can get the funds within three days of applying for the loan advance.
iv. SBA Express Bridge Loans
Businesses can also opt for financial resources such as Express Bridge Loan Pilot Program created by the Small Business Administration for the crisis.
Under this program, the applicants can access up to $25,000 immediately with less paperwork. It is a bridge loan because it helps bridge the gap until the time businesses apply and get a direct loan.
04. Take Advantage Of Waivers From Export-Import Bank Of The United States
The Export-Import Bank of the United States [EXIM] has also announced many remedies to give small businesses relief during the coronavirus crisis. The bank has announced waivers, streamlining of processing, deadline extensions, and many other relaxations.
Here Are Some Of The Major Programs For Small Businesses From The Bank:
● Working Capital Guarantee Program.
● Multi-Buyer and Single-Buyer Short-Term Insurance Program.
● Medium-Term Single-Buyer Insurance Policies Issued to Exporters.
05. Explore Banks And Credit Card Companies
Small businesses can also access the much-needed financial assistance from banks and credit card companies as per requirements.
Here Are The Major Such Resources:
● Capital One, Citi, and Wells
These credit card companies have provided relief in the form of waiving of fees such as monthly service fees and early CD withdrawals. Wells Fargo has offered $6.25 million aid toward the relief packages.
● Bank of America
Bank of America has offered payment deferral on credit cards and will help through its payroll protection plans.
● JP Morgan Chase
JP Morgan Chase has pledged $50 million for small businesses and nonprofits to deal with the crisis.
● Kabbage
Kabbage is an online lending program for small businesses. It is helping by providing a gift certificate program to businesses. You can create innovative cards using gift certificate templates.
06. Get Grants And Other Assistance
Small businesses can also access financial assistance in various ways from social media platforms and other private organizations.
Here Is The List:
i. Facebook
Facebook has offered $ 100M in cash grants and ad credits. This assistance is available in over 30 countries.
ii. Amazon
Amazon launched a $5 million Neighborhood Small Business Relief Fund for businesses that have fewer than 50 employees and need financial help.
iii. Intuit Quick Books
Intuit Quick Books is coming out with several resources for small businesses. These include a $ 1 million fund and employee-directed contributions.
iv. Google AdCredits
The search engine major also has created a $340 million fund to help small and medium businesses in the pandemic. This fund will be utilized by businesses that directly advertise with Google or its partners.
v. Yelp
Yelp has announced funds, particularly for restaurants and nightlife businesses. These businesses can get assistance from the $25 million funds created by Yelp.
vi. Restaurant Worker’s Community Foundation
This foundation has created an RWCF COVID-19 Emergency Relief Fund to help restaurant owners during the coronavirus crisis.
vii. KIVA Loans
Kiva provides interest-free loans of up to $15000 to the small businesses.
viii. GoFundMe
Your independently owned small enterprise can get a small loan of up to $500 from this site.
So, these are some of the major financial resources your small business can get to meet urgent expenses due to the coronavirus disaster. Apply for one of the loans that suit best to the size of your business and meet all expenditures immediately. The loan repayment terms are also made easier for the applicants, which also is a great relief.
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Wrapping Up
Financial resources are the need of the hour for small businesses when COVID-19 has destroyed many enterprises in terms of their incomes and prospects. Fortunately, the government and its bodies, as well as private organizations, including social media platforms, have come to rescue the businesses. Many loans are now available to the small companies at zero interest, and repayment also is flexible.
