Beginning in 2020, small businesses across the US took a hard hit. Around the globe, companies struggled to survive. During the peak of the crisis, unemployment numbers were at all-time highs. In modern history, there has never been anything like what we've been experiencing as a result of the coronavirus. That said, since last March numerous businesses have had to close—some temporarily, some permanently. The government PPP helped some companies make it through, but even that proved too little too late for many. And once those PPP funds did run out, many business owners were simply out of luck and forced to find other means to survive, economically speaking.
The impact of the pandemic was harder on some industries than others. The restaurant, hospitality, and entertainment sectors for example are still in recovery mode with many unsure as to what exactly the future does hold. In the restaurant industry, job losses were over sixty percent and continue to climb even as the pandemic seems to be slowing. Business owners are still in many ways in limbo, wondering what is going to happen in the coming months, not to mention the next few years. Will they be able to fully rebound from the effects of the crisis or will many of them have to shutter for good?
Experts cite studies that suggest that most small businesses only have enough in reserves at any given time to last them approximately just under a month. This is one of the main reasons the CARES Act was created—to get cashback into those small businesses who'd long run out of money after a month of being on lockdown. Between loan forgiveness and low-interest loans, the federal government did indeed get companies the money needed, but again, for many businesses this only proved a temporary stopgap. State and local leaders also stepped in with low-interest loan programs, grants, and other such financing options, and yet many small business owners still found it difficult to keep their heads above water. More and more though, we have been seeing local government as well as state governments step up and try and bail out businesses that are quickly sinking in the aftermath of the pandemic. With the next federal stimulus package uncertain, localstate government help is needed more than ever, especially at this crucial juncture. Below are a few of the key steps that some local and state governments around the countries are taking to try and help their smaller businesses survive and make it through these next few critical months.
Deferring some of the financial obligations that small businesses are facing
One thing many businesses are facing even right now is the fact that their revenue is at an all-time low. For some sectors and industries, the customers just haven't come back in terms of the numbers they were at pre-pandemic. This makes it nearly impossible for some companies to handle even day-to-day bills and financial obligations. Local government do have the ability to defer or even cancel some of the financial obligations burdening these small struggling businesses. As far as rents, utilities, taxes, and licensing costs go, for example, many cities and some states have made accommodations for smaller businesses during this difficult time.
Establishing local relief funds
We have seen many local and state governments offering various financial relief packages and options to businesses. While yes, some governing bodies are waiting on the federal relief package, more local governments are being proactive and using city resources, development grants, and money raised through philanthropic efforts to issue grants and low or zero-interest loans to businesses in need right now.
Helping small businesses apply for SBA loans
Increasingly, businesses in need of money are turning to SBA-related resources during this challenging time. However, SBA loans can involve a long and tedious process. Cities in some areas are offering assistance to those business owners who are seeking funding through the SBA. Many area governments are also making special efforts to assist minority and women-owned firms who are otherwise often underserved in terms of commercial funding. With business owners whose first language might not be English, local governments across the country have been offering additional services to help them get the money they require.
Issuing surveys to better understand the financial need and economic impact
By simply asking business owners what they need, how hard they have been hit, and what the odds are that they can remain open in the short and long term, local and state governments have been gathering much-needed data to assist their recovery and relief efforts. Several cities are issuing such digital surveys to paint a more accurate and comprehensive picture of where their city's businesses stand. This can then help them with federal advocacy efforts as well.
Offering more resources via a centralized hub
One fairly basic thing that local governments have been doing to help struggling businesses is to make access to information and resources more readily accessible. With new websites and centralized hubs and platforms, municipalities can offer small business tools and info that can help them during this critical time. From strategies for pivoting, to SBA resources, to how to apply for certain grant and loan programs, these hubs have proven invaluable for some smaller companies.
First Union Lending is here to help! We offer a variety of fast and flexible loan programs all geared to helping small businesses thrive and survive. We understand how difficult the times are right now for many companies. This is why we take a different approach versus that of a more traditional bank or lender. Even if your credit score for example is not where you'd like it to be, we still have programs that can help you. With short-term loans and lines of credit, among other financing solutions, we cater to small businesses who need funds fast. Call today!