Like many small business owners, Tobi Parks has seen his business devastated by the Covid pandemic.
Parks had to close the doors of its independent art and music venue, e xBk, in Des Moines, Iowa, in March 2020. It didn’t reopen until more than a year later.
“It was terrifying,” 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, economic disaster loan and 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 night a week and at very low capacity – allowing staff, musicians, and inventory to be paid for the evening.
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 earned income, with a maximum amount available of $ 10 million for a single grant.
The SBA said it received more than 9,800 applications as of noon Friday and is reviewing them.
Parks said the funds would save his business.
“It was May that we were going to have to draw on 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 all the other sources of funding that we could. “
Parks is in luck. Nearly 98,000 businesses have closed permanently during the pandemic, according to September data released by Yelp. This represents 60% of closed businesses that will not reopen.
Typically, about 20% of small businesses fail within a year and about half survive five or more years, according to the SBA.
Now, optimism among small business owners is starting to return, according to a number of surveys.
Almost two-thirds (64%) of entrepreneurs now say their business can survive for more than a year under current business conditions, up from 55% last quarter, according to the second-quarter CNBC | SurveyMonkey Small Business Survey.
Additionally, Yelp found that there were more than 500,000 new businesses opened in the past year, down just 11% year-over-year. New business openings in the first quarter of 2021 hit their highest levels in the past 12 months.
“There is a light at the end of the tunnel – that light being the deployment of the vaccine,” said Tom Sullivan, vice president of small business policy at the US Chamber of Commerce.
“It’s still a long tunnel.”
While some sectors are recovering, others are being left behind in what is called a “K-shaped” 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.
To address this uneven recovery, more targeted aid is now needed, Sullivan said. The chamber recommends focusing on this rather than 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.
“The paycheck protection program was the lifeline available to them to get through the initial part of the pandemic and keep their businesses afloat,” she said.
Now, new programs will hopefully fill the need for additional support, she said.
In addition to the Shuttered Venue Operators grant, the SBA 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 extended 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, eligible employers are entitled to a credit equal to 75% of eligible wages up to a maximum of $ 10,000 per employee per quarter.
While 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 maximum loan of $ 500,000. Those who applied before April 6 were granted six months and a maximum of $ 150,000.
“This is another great program that is readily available to small business owners looking for additional financial assistance,” Wade said.
Although it is not a grant and non-repayable, the loan has a low rate: 3.75% for a 30-year fixed loan.
Another way to get funding is through community development finance institutions and minority depositories, which have received $ 9 billion in government funding to help reach small business owners and minorities. and consumers in low income communities.
Local business owners can also find relief. The US bailout is distributing $ 350 billion in emergency funding to state, local, territorial and tribal governments to help provide assistance to its citizens and small businesses, among others.
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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Disclosure: NBCUniversal and Comcast Ventures are investors in Tassels.