By Jon Westerlin, MBA
Small businesses are already feeling the impact of COVID-19 in the United States. As people take refuge from COVID-19 many small businesses are looking for ways to survive this temporary situation and come out of it for the better. Businesses will be judged by how they respond when times are difficult. Billionaire Mark Cuban recently pointed out that “how companies respond to (COVID-19) is going to define their brand for decades.” He also points out that this is a temporary situation. The economic fallout from the Coronavirus will certainly be high, however it will only go on as long as there is danger from COVID-19.
The necessity of Social Distancing is real and will be short lived. The economy will quickly bounce back after the pandemic ends. The U.S. Treasury Sectary Steven Mnuchin said last week that he expects the economy to bounce back to levels seen before the coronavirus outbreak began. He went on to say that he hoped small businesses used the funding provided in the $2.2 Trillion dollar coronavirus relief package to help assist them during this hard time. The Federal Government recently passed the Coronavirus Aid, Relief, and Economic Security Act (CARES) to not only help individuals and families but also small businesses. This unprecedented relief act has 350 Billion set aside to assist small businesses during this difficult time. This bill is designed to help small businesses maintain employees and give them capital to keep things running.
The CARES act offers emergency loans to allow small business to borrow as much as 10 million dollars to help cover payroll. This is known as the Paycheck Protection Program and guarantees and interest rate at no higher than 4%. These loans can even be forgiven if you business meets conditions such as maintaining or restoring your average payroll. So, under the right conditions your loan can essentially be a grant. These are backed by the Small Business Administration or SBA. All small businesses are eligible for one of these SBA loans and can be applied for here. SBA Loan