Tobi Parks watches over drinks at his recently reopened arts and music hall, xBk, in Des Moines, Iowa.
Like many small business owners, Tobi Parks has seen his business devastated by the Covid pandemic.
Parks had to close the doors of his independent art and music come, e xBk, to Des Moines, Iowa, in March 2020. It didn’t reopen until over a year later.
âIt was terrifying,â said Parks, 44, who had been in business for just six months before the crisis hit.
She took advantage of as many programs as she could – government funding, the economic disaster loan, and the paycheck protection program. Still, that wasn’t enough to cover all of his overhead costs, including rent, insurance, and utilities.
In April, it slowly began to reopen: one evening a week and at a very small capacity – doing enough to pay for the staff, musicians, and inventory for the evening.
xBk, a performance hall in Des Moines, Iowa has been closed for more than a year during the pandemic.
Now the parks and other site owners are relieved. The Small Business Administration’s Shuttered Venue Operators Grant program began accepting applications last week for the $ 16 billion in available grants. Eligible applicants can claim grants equal to 45% of their gross income earned, with a maximum amount available of $ 10 million for a single scholarship.
The SBA said it had received more than 9,800 applications on Friday noon and was reviewing them.
Parks said the funds would save his business.
“May was when we had to tap into our bank credit lines,” said Parks, a member of the National Independent Venue Association, which lobbied for relief. She also leads her working group on diversity, equity and inclusion.
“We went through every other funding stream we could.”
Parks is lucky. Nearly 98,000 businesses have closed permanently during the pandemic, according to September data released by Yelp. This represents 60% of closed cases that will not reopen.
Typically, about 20% of small businesses fail within one year and about half survive five or more years, according to the SBA.
Today, the optimism of small business owners is starting to rise to the surface, according to a number of surveys.
Almost Two-Thirds (64%) of Entrepreneurs Now Say Their Business Can Survive More Than a Year Under Current Business Conditions, Down from 55% Last Quarter, CNBC Survey Finds | Second Quarter SurveyMonkey Small Business.
What’s more, Yelp found that there were over 500,000 new businesses that opened in the past year, down just 11% year-over-year. New business openings in the first quarter of 2021 hit their highest level in the past 12 months.
âThere is a light at the end of the tunnel – that light being the deployment of vaccines,â said Tom Sullivan, vice president of small business policy at the US Chamber of Commerce.
“It’s still a long tunnel.”
While some areas recover, others are being left behind in what is called a âK-shapedâ recovery. There is also a demographic divide, with minority small business owners struggling as well, Sullivan said.
The MetLife / US Chamber of Commerce Small Business Index survey for the first quarter found that 86% of minority-owned small businesses are concerned about the impact of the pandemic on the future of their business. In comparison, 72% of small non-minority businesses were affected.
People sit in the outdoor dining area of ââa Ruby’s Diner Inc. restaurant in Carlsbad, Calif. On Thursday, April 22, 2021.
Bloomberg | Bloomberg | Getty Images
To address this uneven recovery, more targeted aid is now needed, Sullivan said. The chamber recommends focusing on this, rather than any additional PPP funding. The P3 ends May 31, although funding may dry up earlier.
Holly Wade, executive director of the National Federation of Independent Business Research Center, believes that for the most part, those who were interested in the P3 program have already participated.
âThe paycheck protection program was the lifeline they had to get through the initial part of the pandemic and keep their businesses afloat,â she said.
Now, new programs will hopefully meet the need for additional support, she said.
In addition to the grant for closed site operators, the SBA has just opened the Restaurant Revitalization Fund. Created by President Joe Biden’s US bailout, it will offer grants of up to $ 10 million per company to replace lost revenue.
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Another source of relief is the employee retention credit, which was part of the CARES Act in 2020 and was extended and expanded in the US bailout. It’s an incredibly powerful program that’s far less well known than some of the other relief measures, Wade said.
In 2021, qualified employers are entitled to a credit equal to 75% of eligible wages up to a maximum of $ 10,000 per employee per quarter.
Although many small business owners try to avoid taking on more debt, they can apply for an economic disaster loan. They can get up to 24 months of relief, with a loan maximum of $ 500,000. Those who applied before April 6 received six months and a maximum of $ 150,000.
âThis is another great program that is readily available to small business owners looking for additional financial assistance,â Wade said.
Although not a grant and not forgivable, the loan has a low rate: 3.75% for a fixed loan of 30 years.
Another way to get funding is Community Development Financial Institutions and Minority Depository Institutions, which have secured $ 9 billion in government funding to help reach small business owners and consumers. and minorities in low income communities.
Local business owners can also find relief. The American Rescue Plan distributes $ 350 billion in emergency funds to state, local, territorial and tribal governments to help, among other things, provide assistance to its citizens and small businesses.
For help navigating the options available, Sullivan suggests contacting your local chamber of commerce, the local Small Business Development Center, or SCORE, a network of volunteer business mentors.
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