States And Local Governments Can Help Protect Workers And Small Businesses From The Economic Impacts Of The Coronavirus
There are basic policy steps that state and local policymakers can take immediately to help local economies and working families weather the coronavirus outbreak.
- Andy Green
The failures of the Trump administration to deploy a transparent and effective national-level response to the coronavirus, which causes the disease COVID-19, means that state and local governments are left picking up the pieces. While the public health response is the most urgent, the economic response will be no less challenging. The rapid, large-scale measures that will be needed to blunt a recession will be impossible without federal support that engages state and local governments greater capacity and person-power. Yet there are basic policy steps that state and local policymakers can take immediately to help local economies and working families weather the storm.
Local Relief Fund With Financing Options
Many small businesses cannot get the loans to continue or expand their business activity. The local government can set up relief funds where business owners can access low-interest loans or grants.
- Jersey City announced on April 2 that it would redirect The Community Development Block Grant funds to match those awarded to non profits and small businesses by the state economic development agency, which amounted to $10,000 for every business.
- San Francisco announced on April 2 that there would be a $12 million loan fund with 0% interest.
Where To Find Business Grants
Below is a list of some of the most robust resources for finding grants that can aid your business:
- SBA.gov is one of the top places to search for grants. The government site is filled with various grant and financing opportunities.
- Grants.gov is the ultimate database for federal grants. You can search for grants by funding type, eligibility, category and agency. Be forewarned: Sorting through the database will require some effort, but the potential payoff is that you may find a grant opportunity that is perfect for your company.
- The Economic Development Administration administers grants for economically depressed communities to stimulate new jobs and commercial growth.
- Similarly, Small Business Development Centers offer local resources that can help your business.
In the wake of the coronavirus, there are resources, including federal and private funding sources, that are helping businesses cope with the drastic economic contraction that is affecting the world.
- Economic Injury Disaster Loans are administered by the SBA and can provide businesses with working capital to pay employees, rent and other expenses.
- In addition to government loans, companies like Verizon have created funds that provide grants to small businesses.
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Read The Eligibility Requirements Carefully
It sounds obvious, but its not hard to overlook aspects of grant eligibility requirements and end up putting a ton of effort into applying for a grant youre ineligible for. Read the requirements carefully and evaluate whether you qualify for the grant. If youre unsure whether you qualify, contact someone from the organization and ask.
The Government Can Give Them Access To Capital
Banks are often reluctant to lend money to small business owners because they are too risky for loans. Hence, most small businesses rely on personal savings when they need capital for expansion or equipment purchases. The Small Business Administration helps fill their financing gap by guaranteeing loans up to $5 million from participating lenders with variable interest rates through Lender Match.
Another program in 1958 was the Small Business Investment Company, where the SBA licensed and provided funds for privately owned investment firms through its Investment Division. These institutions specialize in providing long-term debt and equity investments for high-risk small businesses.
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Know What Youll Be Spending The Grant Money On
Some organizations may stipulate what grant money will be spent on, but even when they dont, its still important to have an idea of how you plan on using the money. When an organization is determining whether to issue your business a grant, having a business plan and knowing how the money will be spent will help them understand more clearly how your business aligns with their mission.
How Do I Qualify For A Small Business Grant
Each grant has specific qualifications youll need to meet in order to apply. Its important to review these first so you dont waste your time applying for grants you arent eligible for.
Some may require you to be in a certain industry. Others may require you to be in business a certain amount of time or be generating a certain revenue. You may have restrictions on how you use the funds.
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How To Apply For A Small Business Grant
Work smart AND hard. Instead of filling out an individual grant application, do what every job applicant does and create a resume for your business that outlines your answers to the common questions business grant-givers ask of their applicants. While grants are technically free money, that doesnt mean they come without hard work on your part.
Some applications will vary based on whats required. For example, a local government grant will likely require an explanation of how your businesss growth and development will benefit local commerce directly, while a grant from a private company like FedEx may require a persuasive video.
Here are a few common details you may need to provide when applying for a business grant:
How To Find A Grant For A Small Business
A quick Google search will pull up millions of results for business grants. So many possibilities are out there that it can seem impossible to narrow down the prospects. But there are a few resources that can not only help you find the right grants for your business, but even assist in the application process, and help you identify grant opportunities that cant be missed.
Published Online Resources And Information
The local government has provided online resources and information through guides and other materials available on their website. The information included are SBA loan applications, contracting lenders from the SBA, and other supporting organizations.
- Boston City created a guidebook and other resources on transitioning from street-side physical businesses to takeout and delivery.
- Birmingham City started a website to share resources and information beneficial for small businesses.
Business Grants Vs Business Loans
As discussed above, with a grant you do not have to repay the funds. However, if you have just launched your business or youre in the early startup phase, you may not be eligible for many grants. Another potential limitation with grants is that many grants have strict requirements concerning the grant application process and the grant proposal. If your application or proposal doesnt meet the specific requirements mandated by the agency, your request will be rejected.
If youre just starting out in business and its unlikely that you will be awarded a grant, you may want to consider finding a loan provider.
One advantage of a business loan is that you can secure the capital you need to meet your needs, whereas with a grant, the amounts are fixed and may not sufficiently meet your companys needs. Another advantage is that some lenders may have more relaxed requirements, such as a lower minimum monthly income or lower minimum time in business.
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Need Help Finding Canadian Government Funding
Are you uncertain of your eligibility for any of the Canadian government funding programs listed above? The majority of government grants for small businesses are reserved for established SMEs . If you are established, please send us a message or register for an upcoming small business funding event. From here, we can further evaluate your eligibility for specific Canadian government funding programs and help you choose the funds most optimal for your business growth plans.
Why Are Government Grants For Small Businesses So Important In 2022 And Beyond
Government grants for small businesses are particularly important for developing a countrys micro, small and medium enterprises sector. Because these grants are funded by tax dollars, they have more restrictions than grants offered by private entities like FedEx and Cartier, as well as foundation grants like WomensNets Amber Grant.
Chief amongst these restrictions is an emphasis on how the money will be used to help the business make a meaningful impact in the community. Grants from the federal government were created to encourage businesses to be community builders and contribute to economic growth. A business that focuses on community development and innovation is sustainable and respected. This is the primary reason government grants for small businesses will remain relevant in 2022 and beyond.
Furthermore, many grant opportunities tend to reward innovation and scientific research. More grants tend to be offered in these categories because they give the country a competitive advantage. After all, it pays to stay ahead of the game.
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Ways The Government Could Help Your Small Business
For business owners, it can be easy to think of the government as a giant hassle. Theres all that red tape you have to fight for necessary permits, then of course theres paying taxes, certifying employees, complying with all local, state, and federal laws, and the list goes on.
Still, despite the day-to-day hurdles that take up so much time and attention, our government traditionally has found many ways to support small business and foster growth. Heres a list of the ways, large and small, that local, state, and federal government work to help your business.
Some local governments will take direct measures to help small businesses in their area, such as offering low interest loans so that business owners can upgrade the facades and exteriors of their stores,increase their energy efficiency, and more. Check with yourlocal government office to see what kinds of assistance services are available.
Also, if you havent already looked into your localSmall Business Administration site or office, you may be missing resources the U.S. government offers on a local level to assist small businesses and help them thrive. The SBA has an office in most of the cities in the U.S. you can find the one closest to you on the website and your regional office can provide you with help navigating relevant business laws, as well as guidance and direction on topics like local incubators, financing programs, and nearby networking events.
Government Grants For Small Businesses In 2022
Daymond John, renowned Shark Tank investor, once said, No matter what business youre in, business is business and financing and money are critical.
Business financing is often a sore point for small business owners because it is difficult to acquire. Get a loan and pay high interest rates. Get an investor and reduce your equity. The gains of sourcing financing can be lost when the stakes are so high.
Thankfully, small business grants provide a solution that removes the risks associated with high interest rates and lost equity.
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Canadian Government Grant Loan And Funding Programs Mentor Works Can Write For Your Business
Canadian government funding programs can support small businesses, large corporations, non-profits and post-secondary research institutions. However, the key to accessing these programs is knowing which ones provide the best fit for your organization and upcoming projects.
Mentor Works team of Canadian government grant & loan application writers have an average success rate of 86% across all government funding programs and provide our clients with an average of 95% time savings. Speak with a member of our team to find out what programs your business may be eligible for by calling us at or visiting our Get Funding Help page.
Good For: R& d Companies
The DoD offers grants to small businesses through the STTR program and a number of other initiatives, like the Defense Enterprise Science Initiative. The Office of Naval Research, the Air Force Office, and the U.S. Army Research Institute are all looking for research and development of technology that will help them reach their goals.
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Supporting Canadian Business Through The Canada Account
The government is changing the Canada Account so that the Minister of Finance would now be able to determine the limit of the Canada Account in order to deal with exceptional circumstances. The Canada Account is administered by Export Development Canada and is used by the government to support exporters when deemed to be in the national interest. This will allow the government to provide additional support to Canadian companies through loans, guarantees or insurance policies during these challenging times.
Equity Crowdfunding For Small Businesses
Equity crowdfunding is similar, but a little different from ordinary crowdfunding. With equity crowdfunding, everyday people commit smaller sums of money to your business in exchange for equity.
Until recently, new businesses could only sell shares to accredited investors, meaning that there was strict net worth criteria that kept members of the public from being able to invest. The restriction also acted as a huge barrier to entrepreneurship, since newer merchants are less likely to have built a network of wealthy investors.
With equity crowdfunding, investment and entrepreneurship have become more accessible than ever.
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What Are Small Business Grants
A small business grant is a predetermined sum of money that government agencies and/or private entities give to small businesses. It can loosely be called free money. Its important to note, however, that nothing in life is truly free. Small business grants are filled with caveats that specify how the money should be spent. Additionally, a lot of work goes into creating grant proposals and meeting the requirements for winning the grant.
State And Local Government
State and local government agencies also offer assistance and advice to community businesses. Most agencies have a hotline to help companies understand and adhere to legal statutes when starting or running a business. The federal government does not give grants to businesses, but it does distribute money to the states. State government then usually give this money to charities and foundations that fund small businesses.
Supporting Jobs And Growth In All Communities
As Canada builds back better, no community will be left behind. From the outset of the pandemic, regional development agencies have been on the ground across Canada, helping businesses weather the effects of the pandemic. Through the $2 billion Regional Relief and Recovery Fund, they have been providing liquidity to businesses, helping bridge them to the recovery, and preserving more than 125,000 jobs. To ensure businesses in every corner of Canada have the support they need to get through the pandemic and that they are brought along in our economic recovery:
Helping Businesses Keep Their Workers
To support businesses that are facing revenue losses and to help prevent lay-offs, the government is proposing to provide eligible small employers a temporary wage subsidy for a period of three months. The subsidy will be equal to 10% of remuneration paid during that period, up to a maximum subsidy of $1,375 per employee and $25,000 per employer. Businesses will be able to benefit immediately from this support by reducing their remittances of income tax withheld on their employees remuneration. Employers benefiting from this measure will include corporations eligible for the small business deduction, as well as non-profit organizations and charities.
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Why Should The Government Help Small Businesses
The small business sector is an essential part of economic growth, and the government must help these businesses succeed. Aside from that, small businesses employ about 47% of employees in the private sector, according to the 2017 Small Business Administrations economic profile.
The SBA also stated that in 2019, small businesses contributed about 44% of the GDP. These small companies were also responsible for creating more than 1 million jobs yearly, which accounted for 64% of new jobs in the U.S from 1993 to 2011.
Here are some other reasons why the government needs to help small businesses:
Government Help For Business Owners During Covid
Heres your at-a-glance guide to federal support
The federal government rolled out a massive aid package for businesses affected by Covid-19, including billions in wage subsidies and credit.
See the table below for a summary of programs that continue to be available to business owners during the pandemic.
The Canada Emergency Business Account and loan programs listed are part of the governments Business Credit Availability Program that provides direct lending to small and medium-sized businesses. BCAP is administered by Export Development Canada and the Business Development Bank of Canada , with loans co-ordinated through banks or other financial institutions.
Also note that the government extended layoff periods in response to Covid-19 to allow employers more time to recall laid-off employees.
For targeted business funding, including support for Indigenous and Black-led businesses, businesses in the territories and certain sectors, and women and youth entrepreneurs, see the governments economic response plan for Covid-19.
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