Small Business In A Crisis - Funding and Support Programs to Get You Through COVID-19
It was only a few weeks ago that our entire world changed. COVID-19 has impacted every community and business in some way.
Fear and anxiety have been the drivers for social media posts and articles lately and without any concrete answers at this moment, how we live now will be the new norm for a far longer period than we imagined.
What does this mean for the economy?
For many, non-essential business shutdowns have caused a massive increase in unemployment. For businesses that are still able to operate, there have been reports of unprecedented income loss.
COVID-19 HAS IMPACTED BUSINESS IN SEVERAL WAYS. HERE ARE JUST A FEW:
1. Access To Capital
In crisis situations like COVID-19, small businesses can really feel the strain of being able to meet their payroll and inventory obligations. As well, there could be extreme fluctuations in market demand. The US Small Business Administration (SBA) can offer some options for funding during these times. You can visit their resource page here.
2. Changes To Workforce Function and Capacity
Being able to protect your employees during this time is critical. The extra precautions you will have to take could create setbacks in work production and flow. Being prepared for extra wait times and slower production and service is important to take into consideration. It’s also important to be prepared for any shortages of staff stemming from COVID-19.
3. Changes to Inventory and Access to Chains of Supply
Ensuring you have enough supply to meet demand will help minimize the impact to your business’ function and overhead. If you receive a lot of your inventory through importing, now is the time to reconsider your options and look into suppliers that are more local.
4. Cleaning Schedule Changes and Accessibility
During COVID-19, your janitorial services could be disrupted. It’s important to review your contract with them and contact them to discuss any changes they might have made to their schedule and/or overall service. If you clean in-house, extra precautions need to be made for disinfecting and cleaning during the time of the pandemic.
5. Insurance Coverage Changes
It’s extremely important to understand any changes or restrictions to your insurance policy. This is the time you should contact your agent to discuss your coverage and go over any and all options.
(We highlight some of these insurance companies and what they are offering to their policyholders and communities here).
6. Market Demand Changes
In anticipation of the newly imposed “stay home” protocol to flatten the curve of COVID-19, market demand changes are unavoidable but, you can work to provide solutions to your customers without impacting your bottom line.
HOW TO STAY UP TO DATE WITH COVID-19
Because COVID-19 is constantly bringing forth change it’s important to keep up to date as the situation unfolds.
The government website provides the most accurate and up to date COVID-19 information and can be a reliable resource for new funding opportunities that might be available to you. You can find that link here.
We’ve put together this quick resource guide to help you navigate through some of the options available.
Coronavirus Preparedness and Response Supplemental Appropriations Act
The Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (H.R. 6074) came into effect March 6, 2020.
It provides emergency financial support for the 2020 year to help combat the spread of the coronavirus (COVID-19).
It provides emergency supplemental funding for food and drug administration, centers for disease controls and prevention, national health institutes, and public health and social services emergencies.
Coronavirus Aid, Relief, and Economic Security Act (CARES Act)
On March 27, 2020 a new program was launched to help address COVID-19. Some of the coverages under the CARES Act include:
Paid sick leave
Insurance coverage for coronavirus testing
Nutrition assistance
Capital Access Programs
Note: For each of the listed programs below, we will describe what they are and how to apply for them/access them.
7(a) program
Geared towards small businesses, the 7(a) loan programs vary in the percentage of coverage and terms and conditions. The full list can be found here. Ready to apply? The application forms can be found here.
Community Advantage loan pilot program
This program runs from March 2, 2020 to September 30, 2020. The CA Pilot Program was created to help businesses in underserved areas.
504 loan program
This loan program is geared to providing financing to fixed assets. The 504 program works by dividing the loan in 3 ways; the company owner puts in a minimum of 10%, a conventional lender puts up 50% and a CDC (Certified Development Company) puts up 40%.
Microloan program
This program provides loans up to $50,000. The loans are geared to not-for-profit childcare centers. On average, the loans granted average $13,000. You can visit the SBA website here for more information.
OTHER RESOURCES:
Kiva provides crowdfunding loans to the underserved. Kiva can help students pay for their tuition, help women start their businesses, to farmers so they can get new and/or improved equipment. The process of applying for a KIVA loan starts with the application which is then reviewed by the underwriters and approval team.
The loan is posted on Kiva and lenders can review and support. After the funding campaign completes, the borrower is expected to pay back the loan through a repayment schedule.
Due to the COVID-19 situation, KIVA has made some immediate changes making their loans more accessible to those impacted by the crisis. Kiva has expanded their eligibility requirements so that more businesses in the US can acquire a KIVA loan.
They’ve also increased their borrowing amounts by $5000 bringing the loan amount to $15,000 instead of $10,000. Kiva has also added an extended grace period.
This means new borrowers can have up to 6 months of grace which gives them more financial flexibility. To get started you can visit their website here.
Founded in 2005, Prosper was one of the first peer-to-peer lending platforms in the US. Prosper provides investment opportunities at fixed rates for fixed terms. The amount allowed to be borrowed ranges from $2,000 - $40,000. It’s backed by some of the leading investors and individuals and institutions can invest themselves and earn returns. You can find more information about Prosper here.
Kabbage is a platform that provides support and assistance that helps you apply for SBA loans that target relief and critical access funds. You can access Kabbage’s website and find out how to apply for funding here.
GRANTS FOR WOMEN-OWNED BUSINESS
Here are our Top 3 Recommended Grant Programs focused on helping women-owned businesses struggling right now.
The Red Backpack Fund
Website Link: https://www.globalgiving.org/redbackpackfund/
Spanx and The Spanx by Sara Blakely Foundation have been supporting women through entrepreneurship. The foundation has stepped up to the plate to offer assistance to Womenpreneurs who have been affected by the COVID-19 crisis.
They’ve partnered with GlobalGiving and established The Red Backpack Fund. GlobalGiving will be overseeing the funding.
There will be 1000 grants of $5,000 each to US-based female business owners to help their immediate needs and support them during the crisis. A bonus “feel good” gift comes along with the grants and there’s a story behind the gift which inspires the name of the fund altogether - a red backpack.
When Sara founded her company Spanx, she brought her “lucky” red backpack from college along for the ride. It stayed by her side every step of the way and now she wants to pay it forward with this small reminder that you can “start small by dreaming big”.
MasterClass also steps up with a donation of All-Access Passes to the 1,000 women who receive the fun. The first round of applications closed April 12 but each month, new applications are being accepted. You can find out more about this program here.
Women’s Business Centers
Website Link: https://bit.ly/SBAforWomen
The Small Business Association (SBA) sponsors several Women’s Business Centers across the nation. It’s designed to help provide access to capital for women entrepreneurs developing their business.
Amber Grant
Website Link: https://ambergrantsforwomen.com/
Every month the Amber Grant program awards several $4000 grants to women-owned businesses. At the end of the year, 12 of those grant winners are awarded an additional $25,000. This grant program is available to both US and Canadian businesses.
Facebook Ad and Cash Credits Program
Website Link: https://www.facebook.com/business/boost/grants
Facebook recently announced its assistance to the COVID-19 situation by offering $100 million in ad credits and cash credits to businesses affected by the pandemic.
During this difficult time, it’s important to know all of the options available to you to help you sustain and grow your business under these trying circumstances.
At HipTen, we have a team of certified experts with industry knowledge and expertise to help guide businesses towards robust solutions that enhance productivity, improve ROI, aid partner-client collaboration, and maximize the organization’s profit potential. To learn more about how to increase your sales and productivity with HipTen, you can contact us here.