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The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
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Editor's Note: Take a look at our featured best practice, Business Continuity and Disaster Recovery Checklist (55-slide PowerPoint presentation). Over the past couple decades, Business Continuity Planning (BCP) and Disaster Recovery (DR) have become crucial for organizations. In recent years, with global crises and disruptions seemingly becoming more prevalent, the BCP and DR functions have become increasingly critical and important [read more]
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It goes without saying that it’s been a tough year for everyone, but for small businesses especially. The global pandemic has caused a huge shift in lifestyle and movement, resulting in an economic recession that’s been felt around the world. The World Bank has described the COVID-19 recession as perhaps the worst economic downturn the world has faced since the end of the Second World War, and it may be years before we’re truly able to grasp the impacts.
This downturn has hit small businesses particularly hard, which are an important part of the U.S. economy. The Harvard Business Review reports that 45% of small businesses in the U.S. have shut down temporarily due to the crisis, with total employment declining by about 40% since January 2020. These businesses make up almost half of the U.S.’ GDP, but are often poorly equipped to handle extended financial crises.
What can small businesses do to weather the COVID crisis? Previously on the Flevy blog, we wrote about how improving supply chain management strategies can go a long way in protecting your company from the worst of the shock. If you need a bit more of a buffer, you can turn to financial aids and grants for more support. While the CARES Act has set aside $349 billion in loans and grants for small businesses, there are also state grants that can help entrepreneurs keep their livelihoods afloat. Here are a few of these grants below.
If you’re a small business based in Texas, the state government offers quite a few programs to help you get back on your feet during this period. One option is the Business for All program, which provides grants of up to $50,000 for business growth. This also includes $10,000 emergency COVID-19 grants to help small businesses during this difficult period.
You can also turn to Fort Worth’s Business Resiliency Microloan Program if your company is based in Fort Worth. This program can provide at least $850,000 to eligible businesses in the city in collaboration with the PeopleFund and the City of Fort Worth.
LLCs in New York can access financial incentives from the local government. This includes the New York Forward Loan Fund (NYFLF), which is a new economic recovery loan program that focuses on supporting small businesses in New York State, including nonprofts and small residential landlords.
In order to qualify for this program, your small business must employ no more than 20 full-time equivalent (FTE) employees, have a gross revenue of less than $30 million per year, and not have received a U.S. Small Business Administration Paycheck Protection Program of greater than $50,000, or an Economic Injury Disaster Loan (EIDL) for COVID-19 of any amount, among other requirements.
The Baker-Polito Administration recently announced a comprehensive plan to grow and stabilize the Massachusetts economy amounting $774 million. This plan focuses on supporting small businesses, revitalizing downtowns, and ensuring housing stability.
Currently, The Massachusetts Growth Capital Corporation (MGCC) will be administering $50.8 million in grants to small businesses and microenterprises that have experienced economic hardship due to the pandemic. Although applications have now closed due to the volume of the applications they have received, it’s still possible to check the status of your application on Submittable.
In the state of California, most small business grants are offered under the federal government. The U.S. Small Business Administration is currently accepting new applications to the Economic Injury Disaster Loan (EIDL) from all eligible businesses. More information can be found on the U.S. SBA website, and loan applications will be processed on a first-come, first-served basis.
Small businesses with fewer than 500 employees can also get reimbursed for paid leave costs related to the pandemic. There’s also a loan guarantee program under the Small Business Finance Center’s Disaster Relief Loan Guarantee Program, which helps remove barriers for small businesses that are not typically eligible for traditional lending. You can visit the California government’s website on COVID-19 for more information.
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