Your Small Business Short-Term Survival Guide
This morning, as the sun rose on a new day, outside my window I could hear birds singing and see trees budding. We are just short of seeing the first blooms of spring breaking through ground that was covered by a fresh blanket of snow just a week ago. Outside of humanity’s limited perspective, life is going on as usual. For those of us who are sheltering in place and seeing our livelihoods disappear like a magician’s grand illusion, life is anything but normal. None of us can predict where we will be a month from now or beyond. Will we have personally contracted the Coronavirus, and will we be added to the numbers of survivors or the growing numbers of victims? About all we can do is pray for the best and do everything possible to ensure our personal survival. This includes the survival of your small business.
We hear the news reports each day about the massive layoffs of employees in the hotel, restaurant, airline, and retail service industries. Massive retailers such as Macy’s, Kohl’s, Best Buy, JCPenney, and Gap have furloughed hundreds of thousands of employees. When shopping malls and retail stores are closed, it is difficult to keep sales associates on the payroll.
Your Small Business
The big companies and the big industries dominate the news because of their impacts upon larger numbers of people; however, there are some 45 million small businesses in the United States today, ranging from sole proprietorships with a single employee to somewhat larger businesses with fewer than 500 employees. Family campgrounds, as well as the vast majority of suppliers to the industry, fall into this small business “mom and pop” category. If you run a campground, albeit on a smaller scale, you are hurting just as badly as the airlines, hotels, and cruise ship companies. Nobody needs to tell you that your phone is not ringing off the hook with reservation requests.
Absolutely nobody asked for the COVID-19 pandemic, but we are all being impacted. As you probably know, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in late March. Several of the provisions of this economic stimulus package are designed specifically to provide assistance to businesses like yours. You simply need to file the applications, and to file them quickly. As I have mentioned, there are some 45 million small businesses in America, and probably 99% of them have been seriously impacted; however, the funds that have been allocated under this massive stimulus package will only cover approximately 1 million claims.
You Are Entitled to Assistance
The first component that is now available is the COVID-19 Economic Injury Disaster Loan assistance program that is administered by the U.S. Small Business Administration (SBA). This program involves a simple, five-page online application that will entitle you to receive a one-time $10,000 non-taxable, forgivable loan payment. It is essentially a grant that will be issued directly by the SBA and deposited directly into your bank account, designed to help your small business to weather the storm and be ready to welcome guests again when all of this is behind us. It is important for your business to survive and to return to its role as a productive component of our country’s economy, and these funds are intended to help to make that happen. Go here to apply now:
The second component that directly applies to your business is the Paycheck Protection Program. This applies to you even if you are the only employee at your campground, but it is particularly helpful for campgrounds with a number of employees, particularly full-time year-round employees who are essential to the operation of your business. I understand that many mid-sized and larger campgrounds have put their hiring of seasonal employees on hold, but you cannot be expected to find, hire, and train replacements for your management and supervisory staff at a moment’s notice. You need to do everything possible to keep these people on your payroll (and off of your state’s unemployment compensation rolls.)
The Paycheck Protection Program consists of calculated loans that will be forgiven and converted to non-taxable grants as long as the funds are used as intended. The amount of the loan is determined by your documented payroll expenses (including independent contractors who are provided with 1099’s rather than W-2’s) and a simple formula. The general idea is for these funds to be used to help you to keep as many employees as possible on your payroll for 8 weeks, even if they are unable to perform their usual responsibilities. These loans will be distributed through the SBA through local banks. The applications will be available online starting on Friday, April 3, 2020. They will be found here:
In the meantime, contact the bank (credit union, or other lending institution) where you conduct your usual business, to determine whether or not it will be participating in this program. (It is likely that it will be participating, since it will earn fees for processing these loans.) You will otherwise be directed to another nearby bank.
The Bottom Line
As we have heard it said from the many recent White House briefings, “America wants to return to work.” The only way for this to happen is if businesses, both large and small, can survive this current crisis and be ready to open their doors to their customers once again. There was a fight to include small business assistance in what could have otherwise been nothing more than a massive corporate bail-out. It is your responsibility to apply to receive your fair share of assistance. The federal government wants you to return to being a productive taxpayer, your state wants you to keep employees on your payroll and off the unemployment lines, and your campers are eagerly waiting for the time when you can welcome them to a fully operational park.
This post was written by Peter Pelland