As much of the current news cycle has focused on the widespread effects of the novel coronavirus, more focus has been given to some of the smaller markets that are being hit hardest.
A large portion of Americans are looking forward receiving their stimulus checks, if they have not already, given that they meet the IRS qualifications. But small businesses may be even more dependent on federal relief than the individual consumer, and a funding gap is preventing them from getting relief.
A few weeks after the passage of the government stimulus bill, over 70 percent of the $300 billion in loans available to small businesses have been depleted.
Miles Ward, sophomore marketing major at California Baptist University, said his parents and other family members were able to apply and were helped by the small business loan program for their own medical billing company in Riverside. Those loans can be forgiven, provided their spending qualifications are met.
“It’s basically free money with no liability,” Ward said, adding that passage of further federal funding is still a necessity.
Around a month after the program began, all of the funds were gone, and Congress was out of session.
Financial predictions indicate that around half of all small businesses in the country could face closure by summer if there is no further intervention, according to data from Goldman Sachs.
Nolan Gouveia, professor and lecturer of entrepreneurship at California Baptist University, said that recession caused by those widespread closures will be severe. But as for when to actually get small businesses back into operation, that question is more difficult to answer.
“If we start to see signs of the coronavirus dissipating or even at a manageable level for hospitals, then I believe we should start opening businesses as soon as possible,” Gouveia said.
This varies largely on how impacted each community is by the virus, as areas considered hotspots have seen harsher restrictions imposed on residents.
Riverside is feeling this impact. Riverside Mayor William ‘Rusty’ Bailey has said the city is working to have all businesses in compliance with prevention measures. That includes a forum for local businesses to post information about their operations to residents willing to support them, outreach from the city’s business resource centers and an anonymous tip line to report non-essential businesses defying health orders.
After proactively ordering restaurants and bars to close in mid-March, Bailey emphasized that the city has tried to be ahead of the curve in keeping remaining essential workers safe.
“Things are changing hourly, and at every level of risk there is a different practice,” Bailey said, noting that firefighters have seen especially high levels of exposure and risk when dealing with emergency situations.
Many businesses will remain closed for the foreseeable future because of social distancing and will lean on all the support they can get from both the public and private sectors. The mayor reiterated, as have other local leaders across California and the country, that social distancing should not stop us from supporting businesses, essential workers and one another during the pandemic – but it is best to stay six feet apart.