What Monetary Assist For Small Companies Is Accessible Throughout The Restoration From Covid?
Tobi Parks interviewed drinks at her recently reopened arts and music venue xBk in Des Moines, Iowa.
Like many small business owners, Tobi Parks saw their business destroyed by the Covid pandemic.
Parks was forced to close the doors of her independent arts and music company e xBk in Des Moines, Iowa, in March 2020. It didn’t reopen until more than a year later.
“It was terrifying,” said Parks, 44, who had only been in the business six months before the crisis hit.
She took advantage of as many programs as possible – government funding, the disaster loss loan, and the paycheck protection program. However, it was not enough to cover all overheads including rent, insurance and utilities.
In April it slowly began to reopen: one night a week and with very little capacity – enough to pay for the staff, musicians and inventory for the evening.
xBk, a performance theater in Des Moines, Iowa, was closed for more than a year during the pandemic.
Now parks and other venue owners have some relief. The Small Business Administration’s Shuttered Venue Operators Grant Program began accepting applications last week for the $ 16 billion available grant. Eligible applicants can qualify for grants equal to 45% of their gross income, with a maximum of $ 10 million available for a single award.
The SBA announced that it had received more than 9,800 applications by Friday noon and is reviewing them.
At the end of the tunnel there is a light – that light is the use of vaccines. It’s still a long tunnel. “
US Chamber of Commerce
Parks said the money will save their business.
“We had to tap our bank credit lines in May,” said Parks, a member of the National Independent Venue Association, who campaigned for relief. She also heads the Diversity, Equity and Inclusion Task Force.
“We went through every other funding stream we could.”
Parks is lucky. Nearly 98,000 businesses closed permanently during the pandemic, according to data released by Yelp in September. This equates to 60% of the closed business that will not reopen.
In general, about 20% of small businesses fail within a year, and about half survive five years or more, according to the SBA.
According to a series of surveys, optimism is creeping back into small business owners.
Almost two-thirds (64%) of business owners say their business can survive for more than a year under current business conditions, up from 55% in the last quarter. This comes from the CNBC | SurveyMonkey Small Business Survey for the second quarter stands out.
In addition, Yelp found that more than 500,000 new businesses opened in the past year, down only 11% year over year. New openings in the first quarter of 2021 reached their highest level in the last 12 months.
“There’s a light at the end of the tunnel – that light is vaccine use,” said Tom Sullivan, vice president of small business policy for the US Chamber of Commerce.
“It’s still a long tunnel.”
While some sectors are recovering, others are lagging behind what is known as a “K-shaped” recovery. There is also a demographic split, with minority small business owners also struggling, Sullivan said.
The MetLife / US Chamber of Commerce Small Business Index survey for the first quarter found that 86% of minority small businesses are concerned about the impact the pandemic will have on the future of their business. In comparison, 72% of non-minority small businesses were affected.
People are seated in the outdoor dining area of a Ruby’s Diner Inc. restaurant in Carlsbad, California on Thursday, April 22, 2021.
Bloomberg | Bloomberg | Getty Images
More targeted help is now needed to counter this uneven recovery, Sullivan said. The Chamber advocates focusing on this and not on additional PPP funding. PPP ends May 31, although funding may dry up sooner.
Holly Wade, Executive Director of the National Research Center for Independent Businesses, believes that most of those interested in the PPP program have already participated.
“The Paycheck Protection Program was the lifeline available to them to weather the first part of the pandemic and keep their businesses alive,” she said.
Now, hopefully, new programs will meet the need for additional support, she said.
In addition to the Shuttered Venue Operators Grant, the SBA has just opened the Restaurant Revitalization Fund. It was created by President Joe Biden’s American bailout plan and offers grants of up to $ 10 million per company to replace lost revenue.
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Another source of relief is Employee Retention Credit, which was part of the CARES Act in 2020 and expanded and expanded in the American Rescue Plan. It’s an incredibly powerful program that is far less well known than some of the other relief efforts, Wade said.
In 2021, Qualifying Employers are eligible for 75% of Qualifying Wage credit up to $ 10,000 per employee per quarter.
While many small business owners are trying to stop borrowing, they can apply for a disaster loan for economic injury. You can get up to 24 months of relief with a maximum loan of $ 500,000. Those who applied before April 6th were given six months and a maximum of $ 150,000.
“This is another great program that is readily available for small business owners looking for additional financial assistance,” said Wade.
While the loan is not a grant and is not forgivable, it has a low interest rate: 3.75% for a 30 year fixed loan.
Another way to get funding is through community development financial institutions and minority depositaries, which receive $ 9 billion from the government to reach small business owners and consumers in low-income communities.
Entrepreneurs can also find relief locally. The US rescue plan provides $ 350 billion in emergency funding to state, local, territorial, and tribal governments to help support its citizens and small businesses, among other things.
For help navigating the options available, Sullivan recommends contacting your local Chamber of Commerce, the local Small Business Development Center, or SCORE, a network of volunteer business mentors.
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