The novel Coronavirus pandemic has forced millions of small businesses around the country to shutter — either by local or state government order, or on their own accord to help stop the spread of the deadly virus. Saving these small businesses from permanent closures, and helping the tens of millions of workers they employ, will require a federal response many times larger than any government disaster relief program in our lifetime — and likely as large, if not larger, than the massive New Deal programs in the wake of the Great Depression.
So far, only $7 billion in emergency lending power has been granted to the Small Business Administration — far less than what will be needed to save Main Street stores and other small firms. Congress must act quickly and at scale; cities and states must help support businesses and working families until the federal response is able to meet the scope of the COVID-19 crisis. In some places, that’s already happening. Here are the steps local and state governments have taken so far to shelter small businesses from the virus’s vast economic turmoil.
Grants and Loans
While ending evictions and utility disconnections is crucial, what most workers and business owners need now is cash — financial relief to keep afloat as the most disastrous economic effects of the crisis take hold. While Congress and the White House negotiate relief packages, local and state officials are moving quickly to deliver at least some assistance to small businesses. New York City has jumpstarted two emergency small business relief programs. The Department of Small Business Services is offering business retention grants to businesses with fewer than five employees that would cover 40 percent of payroll for two months; and the city is offering $75,000 no-interest loans to businesses with under 100 employees. Meanwhile, the state government in Massachusetts has offered similar $75,000 emergency loans for small businesses hurt by the coronavirus crisis. Florida, Washington state and other local and state governments are also extending emergency loans to small business owners. Most of these are modest given the potentially severe and long-term nature of the crisis, but they represent significant stopgap measures until federal assistance arrives. Several state governors, including those in Texas, Georgia, Illinois, Vermont and elsewhere, have asked for declarations of economic injury statewide to help small business owners access federal disaster assistance from the Small Business Administration when federal relief funds do arrive.
Tax Deferral
Cities and states are also allowing businesses to defer on tax payments. San Francisco is allowing businesses to defer payment of first quarter 2020 business taxes until February 2021 and delaying its collection of business license and permit fees. Seattle has allowed businesses with $5 million or less of taxable income to defer payment of city business license taxes.
Eviction Moratorium
At least three states and a number of cities have taken steps to prevent small businesses from facing eviction as the effects of the crisis take hold. Seattle’s mayor has halted evictions of small businesses and prohibited late rent payment fees for two months, while asking for landlords to negotiate payment plans with commercial tenants in need. Two states, Kansas and New York, have enacted statewide moratoriums on commercial evictions — as well as residential evictions and foreclosures. New York’s court system halted all eviction cases indefinitely after considerable pressure from housing justice advocates; in Kansas, Governor Laura Kelly issued an executive order this week ordering banks to halt foreclosures and courts to stop all commercial and residential evictions until at least May. California meanwhile left the decision to halt evictions up to cities. Thus far San Francisco and Los Angeles have done so.
Utility Shut Off Moratorium
Similarly, cities around the country have also ordered utility companies to keep lights on and water running as small businesses weather the COVID-19 crisis. San Francisco suspended power and water shutoffs for its commercial tenants, and waived all penalties and interest for late payments. In Seattle, the city pledged to keep lights and water on for all residents and commercial tenants during the crisis, and allowed residents who lost jobs and wages during the crisis to set up deferred payment plans for their utilities. The response elsewhere has been similar, as local governments and utility companies have pledged to keep services on for customers through the crisis. Utilities in South Carolina, Kentucky and elsewhere have temporarily stopped disconnections or shut-offs for small businesses during the crisis. State and local officials can and should stop shutoffs for public utilities and compel private utility companies to do the same.
Throughout the crisis, we’ll continue to track what cities and states are doing to help small businesses and workers weather the crisis. Stay tuned. And if you have tips and news to share from your community, please let us know at rknox@ilsr.org.
