Moneda Moves (57) : Accessing the $349 billion going to small businesses💵
We've made it through another week, mi gente. It's no small feat.
(Credit: Reuters)
Much of the country is on lockdown, and with social distancing, parks closed and a pandemic still underway, this spring holiday season will be far different from many in the past. The end of this week will also the mark the start of $349 billion in "forgiveable" loans making its way to the bank accounts of small businesses. If you're on the employer side of this spectrum, you know firsthand that the last month has been difficult. According to a recent Goldman Sachs study, more than half of business owners say they would only be able to continue running their businesses for zero to three months in a COVID-19 environment.
(Source: Goldman Sachs)
When the research was published at the end of March, more than two-thirds of small business owners also indicated they were not sure how to access and apply for emergency funding.
On the employee side, many "non-essential" workers have been laid off in company cuts or as businesses have closed their doors for the time being. These layoffs disproportionately affect the the Black and Latino communities, according to a USA Today report. Not only are they overrepresented in low-wage jobs, they also more often have jobs that require them to be at work in-person. That means that if they haven't lost their job because they cannot telework, they are still commuting to work and exposing themselves to coronavirus several times a week, as VICE observes.
The silver lining is that while big companies are furloughing workers, smaller businesses are leaning into their niche communities for help. By pivoting to digital or takeout, seeking help via fundraisers and applying for grants, these businesses have a shot at remaining afloat to see the pandemic through.
We discussed this and how businesses are managing money overall in a Instagram Live conversation with the brand for female entrepreneurs, Rawly Bold, earlier this week. My colleague and reporter Jill Malandrino & I spoke about the latest headlines, personal finance tips and much-needed resources for small business owners. Take a look at just a few of them below. We lead with government assistance, but it's also necessary for many to tap into private and separate resources as funding is expected to run out quickly with a high influx of applications:
Small Business Administration: There are several programs run by the SBA and following the CARES Act, the $2 trillion economic relief bill signed by the administration, there are a few options small business owners can tap into.
Among them is the Paycheck Protection Program, which provides loans of up to $10 million to cover eight weeks of payroll plus some additional expenses, like rent and utilities. There is also Economic Injury Disaster Loans, offering low-interest loans of up to $2 million for businesses that have suffered losses from some kind of disaster.
A full breakdown of these programs is in The Mujerista and The New York Times
Independent funding by companies and resources by nonprofits: A decent list put together here by Inc Magazine which offers companies that have stepped up to offer tools and grants for small business owners.
As for personal finance tips, Jill offered to start by:
Prioritizing debt: Start by paying off loans with the highest interest rate first
(Sub bullet: Federal student loan payments are suspended through September 30 and collection is on pause)
Invest based on your time frame, risk tolerance and goals
We emphasize this: Start where you can. We are all in different financial situations right now. Some of us may be working remote and still have a job, family also secure. Others may have a job but be heavily supporting their family now or vice versa.
And to all business owners and those with family members serving as essential workers (if it's not yourself) out there, I hope you can find a moment this weekend for mental rest. Keep your loved ones close, even if just digitally. The ever-changing news and implications around COVID-19 have been ruthless. But community is stronger than you can imagine.
Con poder✊🏽,
Lyanne
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