As mom-and-pop shops and small businesses throughout the world feel the impacts of the COVID-19 pandemic, several local consulting firms are offering assistance to those in need, while relief measures have been taken by the federal government.
For the third time in as many weeks, Sen. Hannah-Beth Jackson was joined on a conference call by Assemblywoman Monique Limon and Rep. Salud Carbajal and other field experts to provide an overview on the services available.
Economic Development Collaborative serves small businesses throughout Santa Barbara and Ventura counties. The team of 30 consultants provides free consulting services to about 900 firms annually, though in the past two weeks has been in contact with nearly 1,000 businesses seeking assistance and access to capital, said Clair Briglio, communications and business disruption resource director for EDC.
“(They) are asking the question that’s on everyone’s mind: what program is actually best for my business?” Ms. Briglio said.
“We wholly anticipate that number to continue to grow, as we estimated the total unemployment for Ventura and Santa Barbara counties will be around 25% in April. Just to give comparison, it was around 4.6% in February,” she said. “That’s a huge shift. That doesn’t even include the approximate number of self-employed individuals we have in both counties, and we estimate that number to be about 80,000.”
The EDC recommends business owners should contact their insurance provider and those who have business disruption insurance — even if they are told that pandemics are not included in the coverage — are advised to “wait this out, because we don’t know how or if the federal government will step in to encourage or require insurance companies to cover losses,” Ms. Briglio said.
The EDC further recommends business owners to track their losses during this moment of disruption in order to better apply for assistance. Those who are self-employed are advised to continue trying to apply for unemployment benefits if they are eligible under the CARES Act recently signed into law.
Women’s Economic Venture, a nonprofit that serves Santa Barbara and Ventura counties, recently started a quick-response loan a few days after Gov. Gavin Newsom issued the stay-at-home order. The loan offers up to $10,000, said Nicki Parr, associate director of strategic initiatives with WEV, who added that applications have already been submitted for some $650,000.
“We’re hearing that the need for working capital is the primary concern for small business owners,” she said. “While the government provisions are coming…. It’s helpful to have a local resource that could get funds into the hands quicker.”
At the state level, Gov. Newsom recently signed an executive order that provides tax, regulatory and licensing for businesses, allowing the California Department of Tax and Fee Administration to offer extensions up to 90 days for tax returns and tax payment for all businesses who are filing a return for less than $1 million in tax obligations, said Ms. Jackson, who added that small businesses have until the end of July to file first quarter returns.
“That may sound like a long way away, of course it isn’t, but it is certainly a breath of fresh air given that it is April 1 and tax obligations would otherwise be due,” she said.
On the federal level, the $2.2 trillion stimulus package, known as the CARES Act, provides a number of relief measures for small business, explained Mr. Carbajal.
“Certainly our country, and the entire world, are experiencing a public health crisis unlike any other in recent memory,” he said. “The impact on all of our lives has been unprecedented and we face trying times ahead. However, while reconciling all that has happened and is yet to pass, we can get through this together.”
There are currently two loan processes currently in progress for small businesses: Economic Injury Disaster Loans and the Payment Protection Program, said Victor Parker, district director for the Los Angeles District Office of the U.S. Small Business Administration.
EIDL covers up to $2 million in assistance for small businesses and can be used to pay debts, payroll, accounts payable and other bills that can’t be paid currently due to the pandemic. These loans offer repayment processes up to 30 years and the interest rate for small businesses is 3.75% and 2.75% for nonprofits, Mr. Parker said
All businesses, including nonprofits, veteran organizations and self-employed individuals are eligible for PPP, which offers a maximum of $10 million. There is a loan forgiveness component to the loan if the proceeds are used for payroll or other designated business operating expenses for eight weeks following the date of the loan origination. All the loans under the program have an interest rate of 0.5%, with a maturity date of two years and first payments delayed for six months, Mr. Parker said.
Those interested in the PPP who already have an established business account with a lender are advised to contact them immediately, said Xiomara Pena, program director with Small Business Majority.
“Call them now — call them yesterday, really — and make sure you connect with them and let them know you are interested in this product because we are getting responses and getting emails from folks saying that folks still have to be trained and there’s a whole process,” said Ms. Pena, who added that small businesses in California create two of every three jobs.
Some loan programs start as early as April 3 for businesses with employees and as early as April 10 for those who are self-employed. To learn more, visit www.smallbusinessmajority.org
To access a resource guide or view weekly webinars hosted by the EDC, visit www.edcollaborative.com/covid19. To contact the business resource hotline, call 805-409-9159.
To learn more about WEV, visit www.wevonline.org. The nonprofit has also established a phone line dedicated to answering small business concerns, which can be reached by calling 805-456-2342. For Spanish, call 805-908-0096.