The economic slowdown caused by the COVID-19 pandemic is affecting businesses of all shapes and sizes. While individuals and families worry about losing their income as a result of this crisis, business owners are desperate to find ways to stay afloat and survive this financial fallout—especially those who have been forced to close their businesses or alter their operations to support public health initiatives.
Fortunately, federal, state, and local governments have recognized the dire straits facing many businesses. Other businesses are also doing their part to offer whatever support they can to keep their partners and customers in business as long as possible.
If your business is hurting, you’ve got options to seek out help. Here are five tips to take advantage of resources available to you.
1. Apply for a PPP loan.
One of the biggest features of the recent federal stimulus bill is a new loan program aimed directly at businesses with 500 or fewer employees. The Paycheck Protection Program (PPP) loan allows small businesses to seek a low-interest loan equivalent to 2.5 times their average monthly payroll.
The primary purpose of this program is to offer businesses money to keep their workers employed, but you can also put the money toward other critical business expenses, such as covering mortgage interest payments, rents/leases, and utilities. Better yet, this loan is eligible for forgiveness if you meet certain conditions, such as retaining your employees for a set period of time. This can be a great option for securing much-needed financial relief for your business.
2. Apply for an Economic Injury Disaster Loan (EIDL).
The Economic Injury Disaster Loan Program offers up to $2 million in low-interest loans to small businesses and nonprofits that have been severely impacted by COVID-19. The low rate loan can be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. To apply, please visit https://covid19relief.sba.gov/.
3. Check with state and local governments for additional funding and support.
In addition to the federal stimulus bill, state and local governments are offering their own programs to help support small businesses. In Missouri, for example, the Missouri Department of Economic Development is offering disaster relief loans sponsored by the U.S. Small Business Administration.
It’s worth contacting your state and local government offices to find out if additional support is available beyond the federal stimulus plan. They may be able to offer additional resources for direct, immediate relief.
4. Cut other costs to a minimum.
Review other recurring costs for your business and determine whether certain services and costs can be reduced. For example, are you paying for software or other services that can’t be utilized while your store is closed? Can you halt spending on new inventory until you have a timeline for when your business will be reopened?
Hitting pause on these costs, even temporarily, can extend the runway for your business.
5. Take advantage of ad credits, free software offerings, and other limited-time support from partner businesses.
In the wake of the COVID-19 pandemic, many businesses are making small but meaningful gestures to help support other businesses. Facebook, for example, has launched a Small Business Grants Program that offers both cash and ad credits to qualifying businesses. Hootsuite, meanwhile, has made the Professional version of its software free to all users through the end of June.
Dozens of other companies are offering similar programs and services to small businesses, all in hopes of supporting those companies and giving them tools to survive this economic crisis. Explore which programs are being offered by current vendors and partners for your business, and consider taking advantage.
By leaning on a patchwork of relief programs and support services, you can help your business navigate this challenging time and stay afloat until normal life resumes. Just make sure you follow the rules of whatever relief you accept—otherwise, you could face even more problems once the COVID-19 crisis is over.