The pandemic has taken a heavy toll on US small businesses as many non-essential establishments were forced to shut down their operations or close their venues to reduce the velocity of the virus’s spread.
In fact, recent statistics from the National Academy of Sciences of the United States of America show that, prior to the release of small business financing options from the federal government, the median firm had only enough cash to cover their expenditures for two weeks.
However, the government’s response, primarily through the Coronavirus Aid, Relief, and Economic Security (CARES) Act, along with other subsequent fiscal packages, has helped businesses in surviving the downturn, even though the persistent nature of the health emergency keeps weighing.
Were these loans enough to aid small businesses?
Around 70% of the respondents surveyed by the National Academy of Sciences said that they have taken advantage of programs like the Paycheck Protection Program (PPP) – which is parts of the CARES Act – along with other forms of aid such as the COVID-19 Economic Injury Disaster Loan – which is a program supported by the Small Business Administration (SBA) that aims to provide small business financing to firms within the US as well.
Moreover, other forms of small business financing such as the online loans offered by Camino Financial have also helped companies in strengthening their cash positions to remain current on their financial obligations.
That said, a recent report from the US Chamber of Commerce indicated that nearly 74% of the owners surveyed indicated that they will require further small business financing to survive the pandemic, as the crisis has endured for longer than initially expected.
Interestingly, that percentage goes up to 81% when it comes to minority-owned small businesses, which highlights the somehow unequal situation that these companies face when it comes to securing small business financing compared to their peers.
Is the government preparing more aid?
The Biden administration is moving to approve a $1.9 trillion stimulus bill that seeks to cushion the impact that a prolonged virus situation has had on the US economy.
This package includes a $1,400 paycheck for Americans on top of the $600 recently approved by Congress and around $15 billion in grants for small businesses.
Additionally, the government is seeking to expand the aid to as much as $175 billion in small business financing by partially guaranteeing loans taken out by these companies through financial institutions.
A survey from CNBC indicated that 63% of small business owners supported this bill even though confidence among this segment of the US economy is at all-time lows due to the slow pace at which vaccinations are moving forward.
If the bill were to be approved, small business owners will have the possibility of tapping this lifeline to possibly survive the downturn caused by the virus crisis until vaccinations accomplish their goal of reactivating the economy.
The US Congress could move to approve this $1.9 trillion as soon as this week, which would set the wheels in motion to extend these benefits to American small businesses on short notice.
The bill has already been passed by the House of Representatives and it is now awaiting the ‘yes’ from top lawmakers who would convene this week to discuss the last details and hopefully sign off on the aid with a minimum of 51 voters required to send it over to the White House.
Is your company in need of further small business financing?
Are you looking forward to the approval of this bill?
Leave us a comment and check out Camino Financial’s website to learn about other forms of small business financing you can tap if you currently own a small or mid-sized company.