Navigating business ownership through a crisis: Funding, relief and resources for small businesses
Coronavirus is not only a health crisis; it's also an economic crisis and small to medium-sized businesses across America are the unintended victims of our new homebound lifestyle.
In Illinois, our "shelter-in-place" directive has impacted restaurants, fitness centers, salons, and almost every type of locally owned and operated business you can think of. These businesses are the backbone of the American economy and, if you're a business owner, the effects can be devastating. With forced closures -- both permanent and temporary -- how do you navigate business ownership during this uncertain time?
Step one is to consider government aid. In an effort to help business owners find financial relief from the COVID-19 pandemic, the government responded with the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The stimulus package is designed to help small businesses who have been impacted by COVID-19, including nearly $350 billion for small businesses to help make payroll and cover overhead expenses. This loan program from the U.S. Small Business Administration (SBA), known as the Paycheck Protection Program (PPP) provides capital through the nation's banks and other lending institutions. The program helps businesses retain employees instead of laying them off. The loans will be 100% forgiven by the government if the business retains its workers and doesn't cut their wages.
If you currently have an SBA-backed loan, the SBA is the best place to start to try to secure the PPP or one of the other available Coronavirus relief loans. You can also turn to your business lender who may be participating in the SBA program. Many banks, including Signature Bank, are currently administering the PPP loan program for their customers only. Signature chose to participate in the PPP program for two reasons: 1) we are a relationship bank and we have our customers' backs through good times and bad, and 2) we want to help stabilize the American economy. While our loan volume will possibly double or even triple over the next few months, we are committed to making this happen for our customers.
If your bank is not participating, you can discuss the loan with any lending institution that is also an SBA 7(a) lender. However, the real value of having a relationship with your bank comes at a time like this when a true crisis arises. Many middle-market, family owned businesses -- the segment that has been particularly hard hit by the effects of Coronavirus -- know the value of a relationship with their customers, and often seek out a strong relationship with their banker as well. Those businesses are better suited during a time of crisis to be well taken care of by a banker who knows them, knows their business, and can help them navigate the bureaucratic process that may come along with applying for a government-backed loan.
If you own a small business, you already know the value of relationships. We've seen the impact that loyal customers have had on their favorite businesses or restaurants during this shutdown time, from buying gift cards to ordering curbside takeout to attending online events. Businesses are finding creative ways to serve their customers in this new normal. While "this too shall pass," we aren't so naive to think things won't look a little different on the other side. However, with the available financial resources, the creativity and grit of business ownership, and some good thoughts for an end to COVID-19, we will get through this.
• Bryan Duncan is co-founder and executive vice president for Signature Bank.
How can your business participate in the Paycheck Protection Program? For more details on the Paycheck Protection Program and other loan assistance programs, check out the resources below: U.S. Small Business Administration Paycheck Protection Program
U.S. Department of the Treasury
Coronavirus Emergency Loans Small Business Checklist from U.S. Chamber
Talk to your Business Lender or any SBA 7(a) Lending Institution