Given the economic realities of the coronavirus pandemic, around nine in ten small business owners across the country say they have been negatively affected by the outbreak.
And about half say they can’t stay open longer than two months in current conditions, according to a survey by the National Federation of Independent Business.
In the Coachella Valley, preliminary survey results from the Coachella Valley Economic Partnership suggest that about a third of businesses have closed, 70% of which were forced to close after on-site lodging orders ceased and their typical businesses ceased to operate . In the Inland Empire, about 18% of small businesses have already laid off half or more of their employees.
“How do I take care of my family and how do I take care of my business family? Those are the two challenges for small business owners, ”said Josh Bonner, CEO of the Greater Coachella Valley Chamber of Commerce.
State and federal governments have responded to the crisis with a few different options to help local businesses keep the lights on and not lay off workers, from forgivable soft loans to long-term planning efforts.
Here’s a look at what these programs can offer:
Governor Gavin Newsom announced on Thursday a sales tax relief program for small businesses in the form of an interest-free loan of $ 50,000.
Small business owners can withhold up to $ 50,000 from what would be state sales tax dollars. You don’t have to pay these taxes to the state without paying interest for the next 12 months.
The option is available to companies with less than $ 5 million in taxable sales annually, according to the California Department of Taxes and Fees.
John Kabateck of the NFIB’s California director of state said companies will be able to keep funds already raised, provided the business owners can use money immediately. He praised Newsom’s team for the plan, saying the governor’s staff were quick to respond to relief efforts.
Many small business owners have no cash flow beyond a few months, and Kabateck said the program will “be immensely helpful in giving them hope to stay alive.”
In connection with the VAT deferral, Newsom also announced a $ 50 million allocation to the California Infrastructure and Economic Development Bank. The loan program is open to entrepreneurs who are not eligible for government assistance, including companies held by undocumented immigrants.
Newsom also said it has built a business advisory team made up of “some of the best and brightest in the country.”
The team will focus on “how to get the state back on its feet,” he said.
Many small businesses are expected to benefit from a new $ 349 billion program passed as part of the federal $ 2.2 trillion grant program known as the CARES Act.
The Paycheck Protection Program (PPP) will lend up to $ 10 million to businesses with up to 500 employees. It is designed to help with instant payroll and operational costs.
The portion of the loan that was used for labor and other business expenses in the first eight weeks is waived. The remainder of the loan bears interest at 0.5%.
Bonner said he anticipates an “outrageously high” attendance rate – about 750 small business owners who have attended webinars from Riverside County’s Fourth District Leader V. Manuel Perez. Local business lawyers had information calls twice a day.
“I think you will see huge amounts coming out of the desert,” he said.
According to the NFIB survey, 63% of small business owners would consider applying for a loan program like the PPP.
According to the US Treasury Department, loan payments should be made retrospectively from February 15, 2020. This means employers can get their recently laid off employees back on and paid off.
To help distribute the funds as quickly as possible, businesses can apply to any participating SBA lender, bank, or credit union for loan approval on the same day. The federal government said the program will open from April 3.
Non-profit organizations can also apply; other guidelines are available from the Treasury Department.
The Economic Injury Disaster Loan (or EIDL, which is pronounced like “idle”) is an existing federal low-interest loan program open to companies with 500 employees or fewer. It grants loans at 3.75% interest or 2.75% for nonprofits, and repayment terms can be up to 30 years.
The recently passed $ 2.2 trillion government grants program known as the CARES Act expanded the number of organizations that could apply for EIDL – it now includes independent contractors.
A grant program has also been launched to provide an emergency advance payment of up to $ 10,000 to small businesses and private nonprofits financially damaged by the coronavirus pandemic.
Ronald Galati of the SBA’s Orange County / Inland Empire District Office recently said in a webinar that companies can apply for both PPP and EIDL.
Other local resources
In recognition of the long-term impact of the pandemic on the valley’s business climate, a group of local agencies recently formed the Coachella Valley Economic Recovery Team.
Your mission: What will the Coachella Valley look like and what will its people and economy need when the dust has settled?
Bonner said companies may no longer operate the way they did prior to the pandemic if the order for on-site accommodation is canceled. Coordinated efforts will support the region’s recovery, said Bonner.
“When this transition begins, how can we position our local economy to come back as soon as possible?” said Bonner.
The team’s economic development experts come from: Riverside County, the Greater Palm Springs Convention & Visitors Bureau, the Greater Coachella Valley Chamber of Commerce, the Coachella Valley Economic Partnership and the US Small Business Association.
In the short term, however, the main focus is still on publicizing aid programs and helping companies during this time. In Indio, the Chamber of Commerce opened a bilingual hotline in the Indio visitor center this week to answer questions from residents and companies: It is open on weekdays from 9 a.m. to 4 p.m. and can be reached at (760) 347-0676 or [email protected]
Riverside County has created a website called rivcobizhelp.org that has links to several programs that business owners can use, as well as relief funds.
The Coachella Valley Small Business Development Center also shares resources and workshops for business owners available at coachellavalleysbdc.org.
This is also the case with the city of Palm Springs, which has attached a link for economic aid to its online homepage for days.
Mayor Geoff Kors said the city had held conference calls with business owners to share information about the programs available to them.
“People have worked all their lives building their businesses,” he said. “We want to make sure our small business knows about it, but is also supported in running these applications.”
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Melissa Daniels covers the Coachella Valley business. Do you have any stories about how the coronavirus is affecting your job or business? Do you have a question about available resources? Sign up at (760) -567-8458, [email protected], or on Twitter @melissamdaniels.