Two weeks ago, Delores Tronco-DePierro celebrated her highest week of sales ever at her West Village restaurant, the Banty Rooster.
Now, she’s laid off the entirety of her 33-person staff and has been on the phone with loan agents, insurance companies and suppliers to try to stay afloat during the coronavirus pandemic. She closed the Banty Rooster indefinitely on Sunday, sending her employees off with food and some rolls of toilet paper from the restaurant.
As she watches news reports of airline and cruise ship companies possibly receiving bailout money from the federal government, she’s left wondering what will become of all the small businesses struggling to pay their bills since people across the U.S. have been advised to stay home and owners have been forced to close their doors.
“Right now, I’m not able to see or point to anything that says small businesses are going to be included” in the bailout, Tronco-DePierro tells CNBC Make It. “Will we be included? Or are we going to be left behind?”
This is the harsh reality for small business owners across the country now that the novel coronavirus has upended life as people know it. More than 50% of small business owners in the U.S. say they will only be able to keep operating for up to three months under the current conditions, according to a new Goldman Sachs survey of more than 1,500 small business owners. Almost all owners, 96%, say their businesses have already been impacted by COVID-19.
With government officials across the country ordering restaurants and bars to close except for takeout and delivery, restaurant owners are especially vulnerable. Tronco-DePierro doesn’t have the infrastructure to deliver food, and she’s worried the cost of doing so would keep her from reopening in a few months.
“I had to really ask myself if it was worth it try to set up those systems, change the menu, order the packaging, figure out the channels for fulfilling those orders when day to day everything is changing,” she says. “It could be the next day they say ‘shelter in place,’ and all of that was for nothing.”
The Federal government is debating ways to help struggling small business owners like Tronco-DePierro, including making available $300 billion in small business loans to employers with 500 employees or fewer. In the meantime, here are some suggestions for what to do now if you need immediate financial help.
Small Business Administration loans
The U.S. Small Business Administration (SBA) has increased its funding pool from $20 billion to $50 billion in response to the virus.
It is currently offering low-interest disaster loans of up to $2 million for small businesses suffering losses due to the coronavirus. These loans, per the SBA, can be used to pay debts and cover payroll and other bills. You can apply online or by mail once the governor of your state submits a declaration of emergency.
You can also reach out directly to your local Small Business Development Center (SBDC) and your SBA district office.
“You might have to call to get the most up-to-date information, since government websites don’t always keep up with developments,” says Anna Serio, loans writer at Finder.com. “Many business financing opportunities available right now are local, so it’s better to stick with resources that serve your area.”
If you currently have a loan backed by the SBA, reach out to see what additional help you can receive. Tronco-DePierro spoke with her SBA loan officer right away to explain her situation, and she was able to workout a deferral program for both principal and interest payments for at least the next three months.
Some states, like Florida, have also set-up their own small business loan programs. Go to your state government’s website for the most current information, and to learn how to apply. Chicago, Denver, Los Angeles, New York City and other cities have also set up relief programs.
Treasury Secretary Steve Mnuchin announced that individuals and many small businesses will have until July 15 to pay the income tax they owe up to $1 million. Take advantage of this window in order to free up some cash to pay other more pressing bills, Jordan Strauss, a former Department of Justice official and current managing director at Kroll, a global risk consulting firm, tells CNBC Make It.
Now may also be the time to talk to your CPA, or other tax professional, to see if there are other tax credits you can take advantage of or additional things to claim, says Strauss.
The government may also suspend payroll taxes, which would be helpful to every small business owner right now, says Kathy Petronchak, director of IRS practice and procedure at Alliant Group, a tax consulting firm.
If you’re already on a repayment plan with the government from past tax bills, Petronchak, who worked at the IRS for 29 years, including as commissioner of the Small Business Division, advises owners to contact the IRS as soon as they can, and see if they can be put on an installment plan for their tax bill, or ask the IRS to put them in “currently not collectible” status.
“If you’re unable to pay at this time because of a hardship, you can ask that they delay collection,” says Petronchak. “It’s really just a holding pattern until there is an ability to pay.”
Private loans and grants
Some lenders and companies are offering discounted businesses loans and grants during the coronavirus outbreak. Finder.com has been keeping track of offers from U.S. Bank, Amazon, Facebook and others.
Kabbage also has an online hub to help businesses; the Restaurant Workers’ Community Foundation set up a relief fund to help workers and owners.
Additionally, check with your business’s bank about your options. Citi, for example, announced that it will waive monthly service fees and remote deposit capture, as well as penalties for early CD withdrawal.
There are other things small business owners need to keep in mind, beyond immediate financial relief. Here’s some additional advice from experts on how to manage the current situation.
While it’s normal to focus on what is happening right now, especially in light of the constantly changing situation, Strauss says small business owners also need to spend time thinking about how to rebuild once this is all over.
Take a few minutes every day to think about the coming opportunities.
“Take a few minutes every day to think about the coming opportunities,” he says. For example, “if your lease is coming up, you may have more room to negotiate rent.”
Seek out the expertise of a financial professional to help you plan how much reopening will cost, and start devising a plan for making that a possibility. If you are cash-strapped, Strauss says most communities have free legal resources for small business owners. You can search for those online or call your local SBA office.
“I almost think of it as taking 10 minutes to do mindfulness every day,” he says.
Contact the people you rely on
Tronco-DePierro also recommends immediately getting in touch with your bank, vendors and anyone else you rely on or work with regularly.
“Be straightforward and be honest,” she says. “On Monday, I made a list of basically every vendor we have, made notes on everyone we have to get in touch with and made calls or sent emails to them all.”
She also recommends connecting with any small business communities you’re a part of, or look for local organizations or alliances to join now so that you can all share resources and advice. Networking with other business owners online can also be helpful.
While different communities have different types of resources for different types of small businesses, Tronco-DePierro says she got a lot of help from the New York City Hospitality Alliance. “It was easier to follow them and their updates than it was to follow the New York Times and the governor’s website.”
Most importantly, treat your employees and community members well.
“I am cautiously optimistic that we will be able to reopen,” says Tronco-DePierro. And when she does, she plans to rehire her entire team.
Until then, she wants to be a voice for the small business community and work with other owners to get through the next few months. “We’re going to have to come together as a society,” she says.