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Local governments, philanthropy, and non-profits across the country are coming to the aid of small businesses to help them survive this crisis. The need is urgent as more states close nearly all businesses to contain the spread of COVID-19. But access to information and resources is spotty at best, and there is an overwhelming need to fund relief for small businesses.
One hundred people joined our open zoom call on Monday 3/23 (we maxed out capacity – sorry folks who couldn’t get in!) to share ideas, introduce new resources, and learn from each other about how we help our local small businesses fast.
This post shares what we discussed and new ideas shared. The resource models at the bottom were a group effort – thank you to everyone who volunteered an idea, asked a question, and offered to help others on the call!
What we covered:
We need to think about this crisis through a framework.
It is a three step framework (with a couple of sub-points).
1) Contain: Across the nation, we are mostly still focused on containment. How do we keep people at home, make sure they have food and shelter, and keep people away from each other to limit the spread of COVID-19. This is an essential first step.
2) Relief: Our second step, which we focus on below, is to provide relief to those small businesses in need. This comes in two major forms (so far):
Unemployment insurance for those who lost jobs, lost hours, or lost contracts. This coverage must include workers who are self-employed, must kick in immediately, and should raise the maximums so people can secure food and shelter.
Small business relief for micro-businesses to the larger ones to help them retain employees and ideally pivot to provide some service or good in great need right now (more on this below).
3) Rebuild: Our third step will be to rebuild our economy. We will need to be thoughtful and purposeful about who gets the resources and what kind of economy we want to rebuild. But this step will wait a while.
There are three main challenges to small business relief.
Our effort to provide relief directly to small businesses is going to be hard to do. We have no precedent for this size of support for this length of time. And there are a number of specific challenges we need to address quickly:
1) Access and inclusion are BIG barriers to many small business owners. We have many larger small businesses that know how to access government funds, know who to ask, and know how to put together the paperwork for the loan or grant. We have even more business owners who’ve never worked with the local government on any kind of support, may not trust the system in place, and may have no idea how to access a program that could truly help.
We need to act on purposeful outreach programs in our communities to make sure that we reach micro- and small business owners who are not at the front of the line. We need to reach out to connectors in our communities and ask them to help us find these business owners. We need to work with existing non-profits, community organizations, civic and faith organizations, and others to reach everyone.
Without this kind of outreach to ensure access and inclusion for all small business owners, our rebuild and recovery efforts will leave even more people behind and hamper economic growth for a long, long time.
2) We need to understand business needs in more detail. Small cities and towns may not be able to provide the same grants and funding as the big cities (another access issue we should discuss), but every community can reach out in detail to business owners to find out what they need. Maybe it is help with a property owner, maybe it is a facilitated conversation with a bank, but whatever it is, we need to be there to help.
These conversations will also help to build relationships that will support rebuilding efforts in the future.
3) Small business owners need help with the pivot. We are starting to see this spread – how can existing businesses help provide services and products in need right now? The latest news shows how textile manufacturing businesses are producing masks and gown covers for hospitals. Makerspaces are pulling in volunteers to print 3D parts and assemble devices.
How can we help more existing businesses figure out what they can do? This needs the convening power of local leadership and the capacity to help.
We have models to build on – and probably need more.
In the last week, many cities and states launched new small business relief programs. The city programs are generally coming out of large cities with resources. How do we help smaller cities and towns support their small businesses too? What can our tech community do to help in the short-term?
The discussion centered around three main forms of assistance: grants, loans, and e-commerce/training. This list is not intended to be exhaustive but to show the different kinds of models rapidly being created. There are a few links at the bottom for organizations that are aggregating resources as they come out.
Please remember, it is not just about creating these programs. Our success as a community will depend on how we get these resources into the hands of all our small business owners.
Distribution networks such as CDFIs (check out CDFA and Opportunity Finance Network to find your local entities), existing neighborhood service organizations, business improvement districts, and main street organizations are just a few places to start. Each network will help connect more small businesses into our relief efforts, and in some cases, might be the best vehicle for distribution of funds.
1) Grants
A number of cities, non-profits, and community members have come together to support small businesses through new grants programs. Here are a few of the models:
Seattle, using CDBG funds, to provide grants to businesses with bricks and mortar space
Anchor businesses and institutions offering short-term grants (because they removed all the foot traffic) like Amazon in Seattle
San Francisco Disaster Relief Fund grants for small businesses
New York City offering zero interest loans for businesses with fewer than 100 employees and grants for businesses with fewer than 5 employees
Washington D.C. Small Business Recovery Grants
Street Vendor Emergency Fund by Inclusive Action for the City with support from the City of Los Angeles and the United Way for those who can’t access the government support
TechTown and the City of Detroit Small Business Stabilization Fund to reach lower income business owners
Community organized funding like the NY Capital Region Local Angel Funding in support of hospitality workers called, Tip Your Bartender.
State grant programs for small businesses (a mix of loans and grants) from Wisconsin, Michigan, Maryland and others.
2) Loans
There are both public and private loans being offered. A few examples include:
Small Business Administration Economic Injury Disaster Loan (make sure to only check the boxes for COVID-19 and economic distress – recommended one of our participants)
KIVA micro-loans organized by Causa Local Puerto Rico to connect micro-businesses with community investment
Economic Development Administration Revolving Loan Fund programs organized by state (scroll down for the search by state) full of existing loan programs for small businesses
State loan programs for small business – see state links above
3) E-commerce and training solutions
A number of cities and partnerships are launching new e-commerce platforms to help connect their businesses with better online sales. Additionally, some entities are opening up training platforms to help small businesses pivot to new and temporary enterprises during the crisis.
Seattle launched Catch22delivery.com and the platform Bikky.com opened up its platform to help the hospitality industry get direct orders for delivery and pick up and lose less money to third-party platforms.
Communities, economic development organizations, and tourism authorities are investing in e-commerce sites that micro-businesses can plug into to reach a wider audience. A regional example such as Sokoni Store in Chicago and the tourism supported platform in Hawaii called Popup Makeke are both worth a look (and worth copying).
Some communities are launching gift card stimulus program like Kalamazoo to help infuse some short-term cash into struggling businesses.
Some retail and startup experts are offering off the shelf trainings and facilitated conversations to help small businesses pivot and sell wherever possible. 37Oaks University and CO.STARTERS are both offering free and fee-based programs.
We have an urgent need to help our small businesses. We want to make sure they get the relief they need in the immediate term, pivot or reposition their work in the medium-term to still create some kind of revenue where possible, and then support them to rebuild when we can.
We all need to remember - it is not just about launching the programs. It is about measuring who has access to them, who uses them, and how we make sure to build an inclusive emergency response now for all of our small businesses.
For more information about all the programs out there, check out aggregators of local programs:
Institute for Local Self-Reliance