In the News: Federal COVID Relief Programs: Who Needs More Aid & Who Was Left Out?
Here are this week’s top news stories for small business owners.
In the U.S., we’re diving into COVID relief funding as businesses in hard-hit industries press Congress for more support. Meanwhile, there is money left in some SBA disaster relief programs. Are you looking for additional funding? Or do you think business owners should rely less on government programs?
In Canada, indigenous businesses struggled to access relief programs like CEBA, which negatively impacted their recovery. One major issue: Many didn’t qualify due to financial requirements. How are these businesses doing now? And what can we do to help? Read the story here.
🇺🇸 Hard-Hit Businesses Lobby Congress for More Financial Relief
The background: Since the pandemic started, Washington has provided almost $800 billion in relief funding to small businesses via the Paycheck Protection Program, all of which is forgivable if the loan proceeds were used as intended.
But that’s not all. Other programs offered relief, too, like the Restaurant Revitalization Fund and Shuttered Venue Operators Grant Program, which has approved $531 million in grants thus far.
The news: But business owners in some of the hardest hit industries—restaurants, gyms, travel, amusement parks, and horse shows—are still struggling to make up losses from a year plus of restrictions and social distancing. And they’re asking Congress for more money.
Trade associations like the Independent Restaurant Coalition and the American Hotel & Lodging Association are pushing for replenished or new grant programs for their industries, as many businesses look ahead with uncertainty.
Proposed legislation includes:
- $60 billion in grants for restaurants
- $20 billion for hotel worker payroll
- $30 billion for gyms and fitness centers
Current economic rebound isn’t enough: As restrictions ease, there’s an influx of customers wanting to dine out, travel, and spend money. But for many of these at-risk businesses, it’s not enough.
For example, even though there’s an uptick in personal travel, the lack of in-person conferences, business travel, and events are still preventing full recovery in the lodging industry.
What’s more? The shortage of available workers and supplies adds to the burden. The result is that more businesses are at risk of going under if they don’t get relief fast. In fact, one of our recent polls showed 35% of small businesses fear they won't earn enough to stay afloat this summer.
On the other hand, some business owners and lawmakers think enough is enough. Rather than spending billions of dollars on pandemic aid, some would rather focus on the employee issue instead.
And...there’s still money out there: According to the SBA, there’s money left. There’s $30 billion in grants for businesses in low-income areas and $16 billion left in grants for venues.
What do you think? Do you need or want more government relief from the pandemic? Or do you think it’s time to stop relying on the government?
📣 Sound off in the comments.
🇨🇦 Many Indigenous-Owned Businesses Didn’t Qualify for or Apply for Govt. Aid
The background: Canadian federal and provincial governments created COVID relief programs to help small businesses survive. These programs offered everything from interest-free loans (CEBA) to rent relief (CERS), with many provincial programs providing additional support.
In December 2020, the federal government announced an economic relief package totaling $77 billion U.S., the largest since WWII, with a portion going to help small businesses.
The news: Despite providing programs to help small business owners of all kinds, indigenous business owners struggled to access them, says a recent report from the National Aboriginal Capital Corporations Association, the National Indigenous Economic Development Board, and the Canadian Council for Aboriginal Business.
The biggest barriers to access were the financial requirements that came along with the programs, which were based on number of staff and percentage of financial loss, numbers many didn’t meet. In fact, a survey found that more than 25% of indigenous business owners who applied for assistance struggled to hit the requirements.
A big problem with many of these programs is that they didn’t take into account the unique challenges that indigenous businesses face. For example, CEBA was contingent on having an existing relationship with a bank, something many indigenous businesses didn’t have.
Other structural issues, like having the government as a shareholder in your business, made many indigenous businesses ineligible because they were set up according to the Indian Act. While that issue was resolved, it delayed the flow of aid going to indigenous businesses, putting them at a disadvantage.
The impact: Nearly half of indigenous-owned businesses state that they’re at-risk of failing in the next 6 months without additional help.
What do you think? Are you an indigenous business owner who has struggled to access financial relief during the pandemic? What was your biggest barrier? For the rest of the community, how can we come together to help these businesses get through?
📣 Sound off in the comments.
Want to learn more about the small business issues that matter most? Check out these reads:
Comments (1-10)
Small sole proprietorship and single unit owner limited liability companies with maybe 1-10 employees were completely ignored for the most part.
Many businesses have been hit very hard. There is no more money to fund businesses from taxpayers pockets. Its not sustainable, enough welfare and enough lockdowns now. Time to get back to work and pay down the massive debts we have accumulated.
Covid is and was unquestionably real. However, the reaction was far more politically based than science-based. The politicians who pushed for the massive shutdowns lied and continue to lie about the severity and true reporting of the actual cases. From the get-go, there were far more recoveries than deaths but they only focused on deaths and pain. Should any and all politicians be found to financially benefit from this massive devastation by buying up or into real estate deals and business deals created from or made off of the artificial cause of foreclosures and bankruptcies, they should be penalized to the farthest extent of the law. Yes, the feds need to be a very active financial helper in the restaurant industry, small mom and pop businesses, and America's small local businesses.
I am sure there is still a lot of needs out there but that needs to be addressed properly, not with a large blanket like they did in the past. It has to be very focused, controlled and managed properly to avoid waste and abuse. Also looks like no one understands why there is shortage of employees. If a business wants to grow or return to pre-pandemic level but no one to do the job, any financial aids will be a waste (most likely). This demonstrates a very key principle: no business can exists without "employees" and "clients". May be businesses who have taken their employees as "disposable" are paying the price now and maybe should not get more assistance.
Enough is enough! We can't grow our business now that everyone is still sitting on the couch. Except us. We worked twice as hard through the pandemic to keep our revenues up. AND, I'm not sure I want to hire those people that are still choosing to sit on the couch. Says much about work ethic.
Time to stop the Federal unemployment money. It’s impossible to find employees and they are expecting higher wages due to being paid a large amount for not working.
Stop the spending! None of this is sustainable. Taxes will rise, wages are going stupid crazy, hard working people will see there dollars shrink, while those that didnt want to work will recieve twice the pay to go back. We have seen our president spend 8 trillion in 5 months, and no end in site.
I have bad timing. I launched about the time COVID started to be a thing, so I do not qualify for any PPP or other aid because I have no business revenue prior to Apr 2020.
So I have been struggling to make enough money to come up with an advertising budget. Nevermind being able to hire employees!
It is time for people and businesses to rely on themselves. No additional aid should be provided.
After being invited by the SBA for a loan increase which we did in January, we are still waiting and all we’ve heard is it’s being processed and to be patient until we are contacted. It’s hard to be patient while working 100+ hours a week , constant exhaustion, and stressed beyond comprehension, and barely staying afloat , snd no reason to believe the increase will be approved ir hear anything and we have to shutdown. Empty promises and backs turned on “essential “ small businesses. Politicians , talking heads on TV , and liars giving our country away and killing small businesses!