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According to a policy brief by the Institute for Local Self-Reliance (ILSR) state and local governments have so far provided $9.27 billion in small business COVID Relief.
The localized relief came through the establishment of more than 800 programs. They were aimed to not only provide financial assistance to small businesses but also fill critical gaps observed through the federal Paycheck Protection Program (PPP). So far the PPP has provided 5.2 million loans worth $525 billion to small businesses.
Local and State Governments Distributed $9.27 Billion to Small Businesses
According to ILSR, these local programs can leverage partnerships on the ground to reach the hardest-hit small businesses. It includes partnering with Community Development Financial Institutions (CDFIs) to help administer the small business relief programs. Ultimately the 800-plus localized programs had helped small businesses in their communities stay afloat. They were able to not only keep small businesses afloat but also artists, and musicians.
These localized bailouts helped addressed issues such as:
- Some cities and states put emergency aid into the hands of small business owners within days of their governors’ emergency declarations making them early responders to the plight of small businesses.
- Providing small businesses with interest-free loans, with repayment deferred for six months or longer, intended to tide businesses over until federal relief was available.
- Almost all focused on immediate needs, such as helping businesses pay their rent or mortgage payments.
- They also helped to develop or expand online storefronts, reconfigure store or office space, and buy Personal Protective Equipment (PPE).
- They helped small businesses who did not have strong banking relationships, including many minority-owned businesses that were not eligible for PPP or the payroll formula did not fit the circumstances faced by many other businesses.
Why Small Businesses Matter
Small businesses with under 100 employees are responsible for employing one-third of Americans. And the percentage is even higher in many smaller cities and towns. Small businesses are also a significant source of local and state tax revenue- making them crucial drivers of local economies.
When small businesses suffer, the ripple effects are extensive, impacting economic recovery and growth for many years.
This article, “Local and State Governments Have Distributed $9.27 Billion in Small Business COVID Relief” was first published on Small Business Trends