Federal Assistance For Small Businesses – In normal times, small businesses are constantly being built and destroyed. This turbulence makes entrepreneurship a risky journey for individual business owners, but can be good for regional and national economies to the extent that it represents “creative destruction” that creates economic development.[i]
Destruction. At the peak of the crisis, April 2020, 90% of small business owners said that COVID-19 had a negative impact on their operations. [ii] Some small businesses are better prepared, but overall, businesses are struggling because of the regulations needed to protect them. Public safety. Consumer demand is limited – not because they are less productive than their competitors. Simply letting a business fail through no fault of its own will not only cost you money, but destroy all the intangible learning and expertise that small business owners have developed alongside their employees. This “company-specific capital” can be lost quickly, and is very difficult to transfer to another business or to rebuild through additional business.[iii] As a result, widespread small business failure can be extremely long-lasting. . The market recovered.
Federal Assistance For Small Businesses
In other words, for various reasons, relief is still needed to prevent further business damage. But there are still not enough public resources to finance it
Process Of Applying For Government Funding Infographic
Small businesses, which means relief should be targeted at businesses hardest hit by COVID-19. Evidence suggests that three target factors are important:
Size: Young micro businesses—those less than five years old and with fewer than 10 employees—tend to contract and close during economic downturns. For example, during the Great Recession, young micro businesses experienced a 22% decline in employment, compared to a 7% decline for young businesses with 10 to 250 employees.[iv] We expect the same trend to hold during COVID-19.
Location: During the COVID-19 period, the rate of business closures varies between neighborhoods. The rate of closure was higher among small businesses in minority neighborhoods (36%) compared to businesses in white neighborhoods (22%).[v]
Industry: One reason minority neighborhoods have higher closing rates is because businesses in industries disrupted by COVID-19 are disproportionately concentrated in those neighborhoods. Unlike the 2001 or 2007-08 recessions, the COVID-19 economic crisis hit food service, retail, and lodging—all Main Street industries that employ millions of low-wage workers (see Figure 4). While employment rates have largely increased for high-wage workers, employment rates for low-wage workers are 28% below their pre-pandemic peak.[vi]
Continued Wage Support Tops Budget Wish List For Smes: Uob Survey
Local leaders should understand the three streams of resources they can use to support small businesses during the relief period. First, the American rescue plan provides local, state, and tribal governments with $350 billion in the Coronavirus Fiscal Recovery (CFR) to give them the flexibility to respond to the negative effects of the pandemic, including direct support to small businesses. Second, there are federal grants that small businesses must compete for, including the Restaurant Recovery Fund ($29 billion), the Payment Protection Program ($7.25 billion), the Economic Injury Loan Program ($15 billion), and the Closed Location Grant ($1.25 billion). . Together, the federal government has provided about $50 billion in new aid to small businesses. Third, the ARP also includes a new $24 billion Child Care Stabilization Fund that works with states to provide assistance to child care providers.
Understanding the landscape of ARP programs and how those allocations are distributed is the first priority. As an example, we chose Birmingham, Ala., population 210,000. If Birmingham gets its share of competitive federal programs and state-run child care subsidies, it could get about $50 million in small business aid. That amount equals one-third of the CFR’s $149 million in flexible allocations, so it’s important that local governments work to get their fair share of federal matching funds and state control funds.
Many cities have created technical assistance and outreach networks for their small businesses to apply for loans from the Paycheck Protection Program (PPP) or the Economic Disaster Loan Program (EIDL). They must now allocate CFR funds controlled locally to support those networks through grants to chambers of commerce, community nonprofits, and entrepreneurship support organizations—entities with connections and confidence in small business owners, especially small businesses in historically underserved communities. These networks can bring trusted brokers to connect small businesses with federal relief programs, let them stay until consumer demand returns in the summer and fall, and ensure their debts are forgiven to avoid large debts. Another provision of the ARP—the Small Business Administration’s Community Pilot Program—is designed to support these local networks with competitive grants.[vii] In order to secure a local fair share of state-regulated child care assistance, districts must expand theirs. Small business. Outreach networks to connect community intermediaries with child care providers, incl. All Associations for the Education of Children (AEYCs); Child Care Resources and Referral Agencies (CCR&Rs); and Shared Service Alliances (SSAs).[viii]
3. When necessary, use flexible local funding to provide direct assistance to small businesses. As federal small business aid programs expire this fall and summer, local government officials will decide whether they want to directly fund small businesses with their CFR funds. We recommend exhausting other options first, because allocating variable local capital directly to small businesses means that those funds cannot be used in other important areas of economic support. Local governments should coordinate with their states to ensure that they do not duplicate efforts. A reasonable division of labor is for states to use their CFR funds to provide funding while local governments invest in outreach infrastructure and technical assistance to ensure that the disadvantaged have access to that fund.
Small Business Federal Government Contracting ([i] Decker, Ryan, et al. “The Role of Entrepreneurship in US Job Creation and Economic Policy.” Journal of Economic Perspectives 28.3 (2014): 3-24. [iii] Hamilton, Steven. “From Survival to Recovery: How to Help Small Businesses Through the COVID-19 Crisis.” The Hamilton Project (2020). [iv] Liu, Sifan, and Joseph Parilla. “What the Great Recession Can Tell Us About the COVID-19 Small Business Crisis.” Institute (2020). [v] Safaa Amer, “2020 – a challenging year for SMBS”, Facebook, 2021; Opportunity Insights data analysis.
Additional Millions In Relief Funding Available For Small Businesses[viii] Falgout, MK. “Optimizing the Distribution of America’s Rescue Plan Funds to Strengthen Child Care.” Center for American Progress (2021)
The Institute is a non-profit organization dedicated to independent research and policy solutions. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative and practical recommendations for policymakers and the public. Therefore, the conclusions and recommendations of any publication are solely those of the authors, and do not reflect the views of the institution, management or other academics.
This report was made possible by the Kresge Foundation and the Shared Prosperity Partnership, to which the authors are deeply grateful. We would also like to thank colleagues who provided valuable comments on the report: Alan Berube, Annelies Goger, Pam Lewis, Tracy Hadden Loh, Rob Maxim, and Mark Muro. The authors also thank Michael Gaynor for editing, Luisa Zottis for layout and design, Alec Friedhoff for his interactive data design, David Lanham for his communications leadership, and Jade Arn and Rowan Bishop for assistance with publicity. Small business grants: 21 options to apply for free funding for your business by Siege Media, contributed to
No matter what type of small business you own, there are grants available to help your business grow. Read on for details on 21 options and databases.
Small Business Workforce Recovery Grant Program
Small business grants offer funding to grow your business in a number of ways. In many situations, you can use the grant for things like operations, marketing, or expanding your team. Knowing what you may be eligible for is very important so you can start applying.
In this article, we’ll cover the basics of grants and give tips on how to get more.
Small business grants are seed money given to entrepreneurs to build their businesses. The grant is considered a “gift”, and you do not have to pay it back. Sometimes, you may have to pay taxes on the amount received, so please consider this and talk to a tax professional.
Tip: Search grant databases, such as GrantWatch, to find grants available in your industry. GrantWatch is an online hub for more than 26,000 grants in the US and Canada where you can easily find different funding opportunities by filtering your details.
Financial Assistance Tracker For Businesses
A loan is money you have to pay back to the creditor who lent you the money. On the other hand, a grant is a “gift” of money that you don’t have to pay back.
You will need to apply for both the grant and the loan, but the loan application considers your ability to repay while the grant application considers your merit as it applies to the conditions of the grant.
Grants of many types are available to small business owners and are grouped into four main categories. Eligibility for these grants depends on your products and services, how you own your business and your business mission.
There are many grants for entrepreneurs. Find funding from the following sources to help your business. These aids are available at the time of publication and may not be available.
News Flash • Mesquite, Tx • Civicengage
The United States Department of Health and Human Resources created Grants.gov in 2002. It is an electronic government program managed by the Office of the Administrator.
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