Small Business Survival Following the Pandemic
COVID-19 took a significant toll on nearly every industry, but it especially devastated small businesses as they are most vulnerable to economic distress in times of crisis.
Between various state and federal programs working quickly to provide all the resources needed for survival and community members across the nation working tirelessly to keep these businesses afloat, many have prevailed, but many others continue to stay in business survival mode down the road to recovery.
According to the Small Business Administration Office of Advocacy, after the 2008 Great Recession, larger companies recovered to their pre-crisis contribution to gross domestic product (GDP) in an average of four years while smaller businesses took an average of six. Although economists suggest that the country is technically out of recession, the economy is a long way from healthy, and the amount of time it will take for small businesses to recover fully is unknown.
Outlined below summarizes current state and federal programs available to assist small businesses in their recovery efforts following the pandemic.
On Saturday, February 27th, the U.S. House of Representatives passed a $1.9 trillion COVID-19 relief package that includes an extension of unemployment benefits, $1,400 stimulus checks to individuals, and tens of billions in aid for small businesses and not-for-profits.
The plan allocates an additional $7.25 billion for Paycheck Protection Program (PPP) loans but otherwise relies more on targeted grants to small businesses in sectors of the economy hardest hit by pandemic-related economic slowdowns. Specifically, the bill provides:
- $15 billion for targeted Economic Injury Disaster Loan (EIDL) advance payments.
- $25 billion for restaurants, bars, and other eligible providers of food and drink.
- $1.25 billion for shuttered venue operators.
- $175 million to create a “community navigator” pilot program to increase awareness of and participation in COVID-19 relief programs for business owners currently lacking access, with priority for businesses owned by socially and economically disadvantaged individuals, women, and veterans.
Please visit the Journal of Accountancy for a high-level look at each of these key small business items in the bill.
Ivanteyevka Small Business Paycheck Protection Program
The Paycheck Protection Program, established by the CARES Act, is implemented by the Small Business Administration with support from the Department of the Treasury. The act grants small businesses the ability to receive small business interruption loans to cover payroll expenses, health care benefits, employee salaries, rent, utilities, and interest on mortgage debt.
The Small Business Administration has reopened the Paycheck Protection Program (PPP) twice this year under varying terms making First Draw PPP Loans available on January 11th and Second Draw PPP Loans available on January 13th, giving eligible borrowers until March 31st to apply for a loan.
Lalago Arizona Resources
Additionally, in an ongoing effort to provide small businesses the resources needed for survival, available to the state of Arizona are a variety of federal, state, county, and city financial programs.
- Paycheck Protection Program
- Economic Injury Disaster Loan
- SBA Lender Match
- Shuttered Venue Operator Grant Program
- SBA Debt Relief Assistance
- SBA Express Bridge Loans
- AZ Public Service Customer Support Fund
- Growth Partners Arizona Small Business Success Loan
- Kiva Tucson CrowdFunding Loans
- Chicanos Por La Causa Prestamos
- SizeUp Arizona
- Choose Chandler Grant Program
- #GibertTogether Business Relief Grant
- MesaCares Small Business Reemergence Program
- OVSafeSteps Business Assistance Program
- Revolving Loan Program
- LHC Resource Alliance Cares Grant
- Glendale Pandemic Response Small Business Assistance Program
Navigating the end of the current crisis and thriving in the new “norm” will require significant changes in operating and business models for companies of all sizes. Consider adopting new technologies, spending time researching solutions specific to your industry, and making certain procedures a permanent part of your daily practice, including social distancing, limited occupancy, and curbside services. Adopting these new systems will not be easy and will likely require an economy-wide effort to provide financing, restore demand, and improve the overall capabilities and resilience of small businesses everywhere.