COVID-19 has been devastating for most businesses in the United States. When the virus started spreading across the nation earlier this year, local governments had to enforce a lockdown. Stores, therefore, had to close which meant that, for several weeks, business owners had no profit. While there was available financial aid for those who were negatively affected, for many, it was a little too late. Although restrictions have already been lifted in most places, businesses are still struggling to stay afloat.
The pandemic is hurting the small businesses owned by women, immigrants, and people of color the most.
Pandemic Effect on Businesses Owned by Women, POC
The National Bureau of Economic Research found that, between February and April 2020, the number of active business owners fell from 15 million to 11.7 million. That is a 22% decrease within just three months. For comparison, during the Great Recession, there was a 5% decrease in the number of active business owners.
Businesses owned by African-Americans (41%), Latinxs (32%), Asians (26%), Immigrants (36%), and women (25%) suffered tremendous losses. Experts suggested that these businesses tended to be in industries that were heavily battered by the pandemic, including restaurants, hospitality, construction, and transportation.
When small businesses disappear, it will be devastating for the economy. They are going to need all the help they can get in order to survive the ongoing public health and financial crisis.
Loans and Grants for Businesses Affected by COVID-19
There is still hope. Entrepreneurs should start looking for grant writers for hire who can help them secure the funding they need in order to continue operation.
Grants, unlike, loans, are not required to be repaid. They are practically free money given by organizations to support people whose vision aligns with theirs.
Getting a grant can lift a business up. Not everyone is bound to receive it; only a selected few will get the chance to be supported with a grant. Businesses can, therefore, use the grant in marketing materials and campaigns to boost integrity and prestige.
Loans, on the other hand, have to be paid eventually. However, many organizations have created flexible payment options for borrowers.
Loans are easier to apply for and get compared to grants. The criteria for borrowing funding are often much lower and, typically, the money requested is disbursed much quicker.
The Amber Grant Foundation
The Amber Grant Foundation specifically supports female entrepreneurs. Born in memory of Amber Wigdahl, a young woman who died before she was able to realize her dreams, the organization has been awarding at least $10,000 every month to business owners from all over the country. By the end of the year, those who apply may receive $25,000.
A board selects the recipients based on their ideas and passion for business. The winner of the grant is announced every first week of the month.
IFundWomen is a platform that offers a variety of grants that are, specifically, open to female entrepreneurs. Right now, it has several funding opportunities for businesses that are severely affected by the pandemic.
Currently, a COVID-19 relief grant is open for applications. It will provide “microgrants” to businesses. Grants are given on a rolling basis.
In addition, IFundWomen is also offering free coaching and daily encouragement to female entrepreneurs as they navigate through a recession.
Accion is a non-profit organization that was founded with the aim to help small business owners make their dreams a reality. It offers flexible loans, as well as professional connections and access to resources, that will enable entrepreneurs to grow their businesses.
Right now, the organization is accepting applications from minority-owned small businesses. Borrowers can receive thousands of dollars to fund the purchase of necessary supplies, upgrade necessary equipment, hire more employees, and market a venture.
Although the organization does not cater to minority groups exclusively, most of the people they help are people of color.
Foundation for Business Equity
Foundation for Business Equity, or FBE, is an initiative that supports Black and Latinx business owners. This year, it launched a COVID-19 Emergency Fund which is open for ventures that have at least $250,000.
In addition to loans, the initiative also offers response support teams made of strategic advisors and crisis management expert consultants to provide guidance to business owners impacted by COVID-19. The goal is to minimize the damages of the pandemic on businesses and ensure that the business continues to thrive.
Those who were not able to find grants and loans that are applicable to them should browse Grants.gov for federal grant programs and SBA.gov to find lenders.
Small businesses are the backbone of the U.S. economy. Without them, millions of people will be left unemployed.