SBA Steps Up to the Plate for Smallest Businesses

You know it. It’s tough being a small business nowadays. The pandemic has hit your company and hopes hard.

According to estimates, roughly 3 out of every 10 small businesses that were open in New Jersey at the beginning of 2020 are now closed as the coronavirus pandemic — and vast restrictions to fight it — have taken a big bite out of the economy.

In the Garden State, as of February 10, 2021, total small business revenue decreased by 39% compared to January 2020.

The White House and the Small Business Administration has heard your pain and is stepping up to help small businesses, especially those with fewer than 20 employees – the mom-and-pop establishments that line the Main Streets of every town.

On Monday, February 22, the White House announced a number of steps to increase lending to the smallest of businesses.

The reforms, some of which will begin Wednesday, February 24, include:

• Exclusive period: At 9 a.m. Wednesday, the SBA will begin a 14-day exclusive PPP loan application period for businesses and nonprofits with fewer than 20 employees. All applications already submitted by lenders to the SBA before the start of the exclusivity period will still be processed by the SBA.

• Help for sole proprietors: A revision of the PPP funding formula for sole proprietors, independent contractors and self-employed individuals will allow them to use the gross income line on Schedule C. The SBA is also setting aside $1 billion for those businesses without employees in low-to-moderate income communities. The White House said these businesses make up a significant majority of all businesses and include cleaning services, home repair contractors, personal care businesses and small independent retailers, among other examples. And approximately 70% of non-employer firms are owned by women and people of color, compared to 40% of employer firms. In addition, 95% of Black-owned firms and 91% of Latinx-owned firms are non-employers.

• Fairer access: The White House is promising fairer access for returning citizens by eliminating the PPP eligibility restriction that did not allow those with a felony within the previous year to apply (however, the restriction on those with an arrest or felony conviction related to financial assistance fraud within the previous five years remains).

• Increased access: The SBA will now allow those who have struggled to make and are now delinquent on federal student loan payments to apply for the PPP. It also will ensure access for immigrant small business owners who lawfully reside and pay taxes in the U.S. by clarifying that Individual Taxpayer Identification Number, or ITIN, holders can apply for the PPP.

Here are the latest numbers for New Jersey.

Loans: 50,451;

Total funding: $4,399,596,313;

Average loan: $87,205.

For more information visit https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources.

Small businesses in the Garden State can also visit the New Jersey Small Business Development Center at www.njsbdc.com.

E-commerce Sales Grew 30%-plus in 2020

It’s a no brainer but online sales expanded last year. The reason? The pandemic is keeping people at home, glued to their computers.

The US Census Bureau published the latest data that revealed Americans spent $791.7 billion during 2020 on e-commerce, up 32.4% from 2019. “That behavior translated to e-commerce accounting for 14% of total retail sales, compared to 11% in 2019,” CNBC reported.

In other words, total 2020 retail sales were up just 3% … meaning that e-commerce sales were up more than 10 times as much as total sales.

“While consumers shopped online before the pandemic, they were pushed to rely on digital retailers even more during the Covid-19 pandemic, as many physical stores were closed and people opted to stay indoors as much as possible to slow the spread of the coronavirus,” CNBC observed. 

“Consumers filled up their virtual shopping carts with products that they might not have otherwise ordered online, particularly groceries, according to a chart published by the U.S. Census Bureau. Online purchases of food and beverage items grew more year-over-year than any other category between the second and fourth quarter of 2020.”

Launching or expanding your online capabilities now would be a good idea for your small business.

 

Congress can Support the Foodservice Industry

Everyone is suffering because of coronavirus, however no other industry or sector of the economy has suffered as much as the foodservice industry, and no other industry will take as long to recover, believes the International Foodservice Distributors Association (IFDA). COVID-19 closures and the economic downturn have crippled restaurants and the farmers and distributors that supply them their food and supplies. A recent study found that 85% of independent restaurants may go out of business by the end of 2020.  Recovery has gone from a temporary challenge to a seemingly permanent industry disruption. 

IFDA is convinced that Congress can help but the lawmakers should be apprised of the dire situation faced by restaurateurs around the country.

Support the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive (RESTAURANTS) Act of 2021
The RESTAURANTS Act is bipartisan legislation that establishes a $120 billion revitalization fund to support independent restaurants and small franchisees as they deal with the long-term structural challenges facing the industry because of COVID-19.The bill provides real relief for any small restaurant that can demonstrate they lost revenue in 2020.  Federal grants under the bill can be used for everything from retaining workers to operational expenses like inventory and rent. 

What are the details?

$120 Billion Fund: The RESTAURANTS Act establishes a $120 billion “Restaurant Revitalization Fund” managed by the U.S. Department of Treasury to provide direct grants to eligible entities.
Coverage Period: Begins February 15, 2021, and ends 8 months after enactment of the program. If funds are not spent within 8 months of enactment, the entity’s funds convert to a loan with an interest rate of 1% with a maturity date of 10 years.
Who is Eligible: An entity that owns or operates—as of March 13, 2020—20 or fewer establishments (together with any affiliated business), regardless of the type of ownership of the locations and whether those locations do business under the same or multiple names. Entities can be a restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premises of a beverage alcohol producer where the public may taste, sample, or purchase products, or another similar place
of business in which the public or patrons assemble for the primary purpose of being served food or drink.

How can you help?

Share the quotes or articles below to spread awareness. Write your legislator using the IFDA Legislative Action tool. Post messages and images on social media. Visit https://www.ifdaonline.org/