‘This is a new reality’: Small business support needed now more than ever
MONDAY, MARCH 30, UPDATE: On the afternoon of March 27, after this story published, President Trump signed into law the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act — or the CARES Act.
The law, among other things, waives the “credit-elsewhere test” for businesses looking to apply for an Economic Injury Disaster Loan, meaning that small businesses that have credit available elsewhere are now eligible.
Initially, when an economic emergency was announced March 17 and loans were made available, only small businesses without credit available elsewhere were eligible to apply.
The original story from the morning of March 27 is below.
RENO, Nev. — For years, Ann Silver has touted the importance of supporting Northern Nevada’s small businesses, which she has called the “key lifeblood” of the community.
Now, with the global economy hit hard by the COVID-19 outbreak, prompting Gov. Steve Sisolak to order all nonessential businesses in Nevada to close for 30 days, that support is needed more than ever, Silver said.
“We’re encouraging people to buy gift cards, do takeout, call for delivery … support local businesses,” Silver, CEO of the Reno-Sparks Chamber of Commerce, told the NNBW last week.
Truth is, many small businesses in Reno-Sparks and beyond are hemorrhaging money and scrambling to stop the bleeding.
According to a March 23 report by the National Federation of Independent Business (NFIB), 76% of small businesses are negatively impacted by the COVID-19 pandemic. Ten days prior, only 25% of merchants reported having negative impacts, NFIB says.
In other words, small businesses are feeling ever-growing impacts of the coronavirus pandemic with each passing day.
“We’ve had many small businesses that, depending on the how long this lasts and the severity of the state mandate, they may simply have to close their doors,” Silver said. “If you look at two years ago and think about this incredibly robust economy, with a lot of people — younger and older — starting their own businesses, these are folks with a lot of grit and determination, and they put their savings into opening a small business … and they may not make it.”
EMERGENCY SBA LOANS MAY HELP
With many business owners feeling anxious, Silver said the chamber’s call and email volume from its members has tripled since the governor mandated a statewide shutdown.
“We had a call from one place that said, ‘I have a lot of fresh vegetables and meat in the refrigerator that will go bad, may I sell them in the parking lot?’” Silver said. “Every scenario you can imagine, we are getting calls about them. We’re taking their calls and helping them with decisions.”
The chamber, Silver said, is keeping its business members informed via daily email briefings that provide resources and holding conference calls for their members with government entities like the Small Business Administration and the state labor commissioner.
“A lot of companies are worried about 401(k) plans, a lot of employees are worried about what’s happening to their retirement funds,” Silver said. “The list is endless, as we’ve never faced anything like this. This is a new reality that is playing out with things changing by the hour.”
Silver said the SBA’s Economic Injury Disaster Loans, which offer up to $2 million in assistance per each business at an interest rate is 3.75%, could be a viable way for some Reno-Sparks small businesses to stay afloat.
According to the SBA, loans may be used to pay fixed debts, payroll, accounts payable rents and/or other bills that can’t be paid because of the disaster’s impact.
“There’s $8 billion allocated to the state of Nevada for the SBA loan, so I would say the sooner you get in line, the sooner you get the money,” said Silver, before adding: “It is not a grant. It is a loan; so if people think they may have to default, don’t apply for this. And if you already have a line of credit, you’re not eligible.”
‘BUSINESSES ARE IN SHOCK’
Meanwhile, the Downtown Reno Partnership has been focused on, among other things, reaching out and educating downtown’s small businesses, property owners and stakeholders with all relevant information and resources, said Alex Stettinski, executive director of the DRP.
“I think businesses are in shock and just trying to watch the news and make sure they comply with the changes and requirements happening every day,” he said. “I don’t think they’ve had enough time to truly lick their wounds and assess the damage. I think that will come in the next couple weeks or so.”
Stettinski said the first thing the DRP did after nonessential businesses statewide were shut down was put together a guide to downtown take-out dining and curbside retail.
He noted that the DRP’s Facebook post of the guide — which you can view at downtownreno.org/covid — has reached nearly 30,000 people and counting.
“It shows you how needed these kinds of services are right now,” he said. “For us, it’s to promote our businesses and tell people to support our businesses and utilize their services.
“I do believe that we have a healthy economy and we will, hopefully, go back into a healthy economy out of this,” he continued. “But, the short-term impact is pretty dramatic for some. There are a lot of layoffs, people are losing their jobs, some businesses are just hanging on to make sure they are capable of opening doors again and continue business after this.”
To that end, Stettinski said he thinks it will be challenging for closed businesses to start back up again after dealing with the short-term costs and steep drop in revenue during this pandemic.
“With the rent and overhead, and they have to start the business up again literally from zero?” he said. “That re-ignition process will be one of the harder things to do.”
“While I cannot say with certainty what the business landscape will look like after the dust settles, I do believe it will never get back to the way it was before the shutdown,” advises Mike Bosma.