According to the National Federation of Independent Business, it is estimated that about 70% of small business owners have attempted to apply for the $350 billion Paycheck Protection Program or PPP. Those that did apply, 20% reported that their application for the loan had been approved and that those funds were deposited into their account on April 17. However, it was found that 80% were still waiting to hear on the status of the application.
About 50% of small business owners applied for the Economic Injury Disaster Loan Program or EIDL, which offers loans for disaster assistance. NFIB’s survey discovered that, out of those who applied for this loan, only 10% reported that they had received funding.
In March, Congress passed a $2 trillion Coronavirus stimulus package that included the two aforementioned loan programs. Yet, since the application’s announcement to the public, it has been rife with problems. For example, the PPP ran out of funds in mid-April, after the Small Business Administration (SBA) approved 1.66 million loans coming from 5,000 lenders. Close to four billion small businesses have applied for the EIDL funds, which averaged about $380 billion. Although Congress only set aside $17 billion for the program.
Knowing this, what is a small business, struggling to stay afloat, supposed to do? Where else can they turn for assistance? Despite the dismal panorama, small business owners shouldn’t panic. There are options. Take a look at a few below.
What You Can Do Right Now To Stay Financially Sound
- Keep Generating Business: It’s easy to get caught in the frenzy and panic of your situation, but don’t. Focus on creating a plan of action and determining which steps should take priority. Many businesses have moved to sell their wares from storefront to online. Get educated by taking online courses or if money is really tight, find some free YouTube videos to pivot your business to keep generating sales.
- Tighten The Purse Strings: It’s time to get radical and cut all expenses that are not essential to your business. Begin by getting rid of company credit cards, travel, and contributions to employee retirement funds. You must also do away with employee bonuses, raises, and overtime pay. Inventory purchases must also be cut back.
- Don’t Do This Alone: Reach out to your network of expert professionals who can give you advice to help steer you in the right direction. This can include your certified public accountant or your lawyer. It’s critical to receive the most up-to-the-minute information as this changes daily. You can also get in contact with your local business associations to connect with other colleagues to exchange advice and ideas.
- Offer Other Services: It’s time to get creative and think outside the box. If you are not able to sell the same merchandise as you did before you were forced to close doors, sell something else. See what is most in demand, try to offer something similar or better. Again, you will need to sell your new merchandise online or find a way to provide non-contact delivery.
- Seek Options Outside EIDL and PPP Loans: Since these loans have received much attention, there are still other options to consider. For example, the U.S. The Chamber of Commerce has launched the Save Small Business Fund, which offers $5,000 grants to small businesses that employ between three and up to 20 workers.
As many across the world are weary and waiting for this coronavirus pandemic to subside, businesses continue to wonder about their future.
For the time being, small business owners must remain proactive and take a closer look at their financial position. Once that is established, they need to take advantage of every opportunity available.