Resources For Business Owners
According to Forbes in mid-March, of the 30 million small businesses in America, roughly half harbor deep concerns about the economic impact that COVID-19 will have on their ability to survive. In March, Sequoia shared guidance to its founders and CEOs on how to safeguard their venture’s health as the coronavirus spread. Crunchbase continually updates a list of resources to help you weather the storm of COVID-19, including “ways to target recession-resistant companies,” updates on quickly-changing private market trends, and advice from others.
We’re sharing a summary of Sequoia’s advice and highlighting major resources, including government agencies, private companies, and nonprofits that are supporting small businesses at this time.
Priorities for All Entrepreneurs during the Pandemic
- Cash runway. Put in place a plan to conserve cash as soon as possible. Think about ways to trim expenses without fundamentally hurting the business.
- Fundraising. Economic downturns in 2001 and 2009 saw drops in private financing. If fundraising proves difficult in the coming year, what could you do? Remember: many of today’s iconic companies—including Google, PayPal, Airbnb, and Stripe—grew out of and during bear markets. Can you leverage constraints to find more creative approaches?
- Sales forecasts. When the economy drops, customers often react by conserving spending habits. What could you do to survive on a more conservative forecast?
- Marketing. During periods when customers spend less and fundraising becomes less certain, can you find ways to adjust marketing expenses?
- Headcount. Consider whether you can do less with more and defer plans to hire.
- Capital spending. Unless you have a reliable cash runway, think about ways to reduce your expenditures temporarily.
Shikhar Ghosh, serial entrepreneur, investor, and co-director of the HBS Rock Center for Entrepreneurship gently reminds, “startups die because they run out of cash, not ideas.” If you haven’t done so already, he advises, “create an aggressive plan to conserve cash” aiming to have a 12-month runway, if possible.
Resources can change quickly in response to COVID-19’s rapid advance. Crunchbase News provides reliable and current independent editorial coverage about private companies and trends.
Private & Nonprofit Companies Offering Help
Amazon: $5 million Neighborhood Small Business Relief Fund to provide cash grants to local Seattle small businesses.
The Awesome People List, shared by Crunchbase and developed by Julia Lipton and David Siegel, includes information on layoffs, companies still hiring, and how to help.
Candor also developed a list of companies that are freezing hiring due to COVID-19. We’ll continue to keep an eye out for helpful resources and link them here.
Crunchbase News team publishes independent editorial coverage about private companies and trends.
Facebook: $100 million grant for small businesses impacted by COVID-19. The majority of the grants will be distributed in cash, with some ad credits for business services. Businesses do not need to be on Facebook, Instagram or WhatsApp to apply. See the Business Resource Hub, which features recommendations to help small businesses stay connected to customers and stay on track.
Fattmerchant and Gift Up have partnered to help small businesses by waiving the usual 3.49% fee for Fattmerchant’s members’ first $5,000 in gift card sales.
James Beard Foundation’s Food and Beverage Industry Relief Fund geared to provide small grants to independent food and beverage small businesses in need.
JP Morgan Chase: $8 million pledge to aid small businesses.
Kabbage’s online hub helps boost sales for U.S small businesses impacted by COVID-19, including a system through which businesses can sell gift cards to consumers for use at a later date.
Kiva small business loan at 0% interest loans of up to $15,000. The company is also offering a longer grace period: new borrowers can access a grace period of up to 6 months.
MainVest’s Main Street Initiative to provide a $2,000, zero-interest, 120-day loan for restaurants or other brick and mortars affected by the shutdown, in addition to its normal fundraising offerings.
Mark Cuban Companies will reimburse employees for supporting local independent small food and beverage businesses.
Yelp’s $25 million in coronavirus relief for independent restaurant and nightlife businesses in the form of waived advertising fees, and free advertising, products, and services.
U.S. Federal Government
Small Business Association (SBA). Providing up to $2 million in Economic Injury Disaster Loans for small businesses in eligible areas impacted by the coronavirus. See the resource page to determine eligibility and learn how to apply.
Main Street Emergency Grant Program. A proposal by U.S. Senators Chris Murphy, Jeff Merkley and Chris Van Hollen would allow small businesses to apply and receive grants quickly through the Treasury Department.
Florida: The Florida Small Business Emergency Bridge Loan Program is providing loans of up to $50,000 with 1-year terms to small businesses with two to 100 employees.
Massachusetts: Governor Charlie Baker announced a $10 million relief fund for Massachusetts businesses affected by the coronavirus. Funds of up to $75,000 are immediately available for companies with fewer than 50 full- and part-time employees.
Michigan: The Michigan Economic Development Corp. received approval to implement a Michigan Small Business Relief Program that will allocate $10 million in small business grants and $10 million in small business loans to local business owners.
New Mexico: The New Mexico Economic Development Department created the COVID-19 Business Loan Guarantee Program to aid small businesses seeking emergency loans or lines of credit. The program can guarantee a portion of a loan or line of credit up to 80% of principal or $50,000.
Wisconsin: The Wisconsin Economic Development Corp. launched Small Business 20/20—a $5 million grant program that will give companies with fewer than 20 employees up to $20,000.
Atlanta: The Atlanta City Council approved Mayor Keisha Lance Bottoms’ call for a $7 million coronavirus emergency fund that will allocate $1.5 million to small businesses
Denver: The city’s business owners can apply for cash grants of up to $7,500 as part of Denver Economic Development and Opportunity’s emergency relief program. Denver Mayor Michael Hancock also announced the creation of a $4 million small business relief fund.
Los Angeles: The city’s Small Business Emergency Microloan Program is offering loans ranging from $5,000 to $20,000 with 0-3% interest rates.
New York City: The NYC Small Business Services is offering businesses with fewer than five employees grants to cover 40% of payroll costs for two months. Businesses with fewer than 100 employees and sales decreases of 25% or more will be eligible for zero-interest loans of up to $75,000.
Portland: Small businesses located in Portland’s Jade District or Old Town Chinatown are eligible to receive support through the city’s $190,000 emergency fund. Asian and Pacific Islander business owners will be prioritized.
Sacramento: The city established a $1 million economic relief fund for businesses that provides 0% interest loans of up to $25,000 per business.
Salt Lake City: Business owners based in the area can apply for 0% interest loans of up to $20,000 as part of the city’s emergency loan program.
San Francisco: Small businesses with fewer than five employees are eligible to receive up to $10,000 for staff salaries and rent.
Seattle: The city’s Office of Economic Development is providing $1.5 million in grants of up to $10,000 to small businesses. The mayor is also deferring tax payments for business-owner candidates and will set up a small-business recovery task force.
Consider Using Your Expertise to Help Others Startups
Startups won’t be spared from the economic impact of the pandemic, but entrepreneurs are resilient and resourceful. If you’re a stable startup, consider ways you might help others in your community.
Crunchbase Resources to Help Your Business During COVID-19 is a comprehensive list of tools and resources Crunchbase has compiled to help startups weather the uncertainties imposed by COVID-19. These include “ways to target recession-resistant companies,” “information about quickly-changing private market trends,” and “tips from other experts dealing with COVID-19.”
Given these uncertain times, we understand opportunities will be hard to come by and we hope these free tools will help.
8 Tips: How Startups Can Survive the COVID-19 Economic Crisis Dan Rosen advises, “any step that cuts your burn early on will have a lasting impact on the later cash balance and your cash horizon.”
Coronavirus: The Black Swan of 2020, the open letter from Sequoia to its founders and CEOs, contains pragmatic advice.
In Covid-19 Response: Big Decisions for CEOs Right Now—and Urgent Questions About the Time After, BCG provides practical guidelines that CEOs should follow to protect their team, customers, and the company.
8 ideas for startups to give back in the time of Coronavirus provides suggestions on how the entrepreneurs can help one another and their communities.