The Paycheck Protection Program, the United States federal initiative to provide loans to small businesses, has mostly failed to reach its intended recipients. There is not enough money, and loans to date have often gone to large companies. The second round has problems because the Small Business Administration website can't handle the volume of requests.
Small businesses may want to consider alternative sources of funding to stay afloat. Here are some alternatives.
Business for everyone
In conjunction with Verizon and the collection site Hello Alice, Business for everyone offers $ 10,000 wheelchairs on a rolling basis to small businesses affected by Covid-19.
Facebook has set aside $ 100 million in cash grants and advertising credits for companies damaged by Covid-19. Up to 30,000 eligible small businesses in more than 30 countries where Facebook operates will be eligible. To be eligible, a company must have:
- Two to 50 employees,
- Been in the business for over a year,
- Experienced difficulty from Covid-19,
GoFundMe's reputation, the crowdfunding site, has been affected by some of the campaigns being fraud, especially by people requesting medical support. Recently, GoFundMe implemented stricter methods. It now has a GoFundMe guarantee that guarantees repayment to donors if the campaign proves to be a fraud or misuse of funds.
GoFundMe does not charge a platform fee for a promotion.
The company has established Coronavirus Small Business Relief Initiative. All donations are collected and administered by GoFundMe.org, the Department of Defense and Charity. Partners are Intuit QuickBooks, Yelp, GoDaddy and Bill.com.
Small businesses can receive a matching $ 500 grant provided they raise at least $ 500 from a GoFundMe campaign. In order to qualify for a matching grant, a company must show that it has been adversely affected by a government mandate due to the pandemic. The business must be owned and operated independently, and the recipient must use the funds for employees or pay ongoing business expenses.
As of April 29, the related Small Business Relief Fund had raised $ 2,377,040 in donations – with 13,138 small businesses collecting funds. There are no limits to how much a company can collect, and even if the goal is not reached, the company receives all the money raised.
Kiva, the non-profit micro-loan organization, lends mainly to small companies in third world countries. Kiva has a guarantee process and often makes loans in other countries through lender partners (ie individuals, companies, organizations).
Kiva now makes direct loans to help small businesses in the U.S. and the world over gets through Covid-19 crisis. The minimum amount from each lender is $ 25; Most loans are financed by many lenders. The loans are interest-free and are repaid monthly. US loans have repayment terms between 30 and 42 months, depending on the loan amount.
Many states and large cities are implementing grant and loan programs for small businesses. State and city websites should have the necessary information.
Local Initiatives Support Corporation Rapid Relief and Resiliency Fund offers grants to minority and women-owned small businesses.
Sara Blakely is the founder of Spanx, a female clothing company. Her "Spanx by Sara Blakely Foundation" donated $ 5 million to support women entrepreneurs and partnered with GlobalGiving (a nonprofit) to establish The Red backpack fund, to provide $ 5,000 worth of contributions each to women entrepreneurs in the United States affected by Covid-19.
For companies that have incomes that come in but need money for inventory or other operating costs, a credit line from commercial lenders can help get through the mess. However, depending on credit points and revenues, prices may be high.
Some banks change their usual credit terms to meet companies that have suffered revenue losses as a result of Covid-19.
Otherwise, online funding sources include the following.
- Blue Vine offers credit lines to companies with low credit scores, but the interest rate can be quite high. It also offers loans and invoice invoicing and is an approved SBA lender for the Paycheck Protection Program.
- Kabbage has a streamlined application and decision process. It is also an approved SBA lender for PPP; An application can be completed on its website.
- On deck offers both credit lines and, for lower interest rates, loans. OnDeck is an approved SBA lender for PPP, with an online application.