Webinar recap: COVID-19: Demystifying Financial Programs & Resources
On March 30, IEDC hosted a webinar entitled, "COVID-19: Demystifying Financial Programs & Resources" in which economic developers provided details and advice on the recently-passed CARES Act and other financing programs for businesses.
Robin Barnes, Principal at Resilience Resolutions; Vincent DiCara, Founder of DiCara Training and Consulting; Brett Doney, CEcD, FM and President/CEO of Great Falls Montana Development Authority and John Zakian, National Disaster Resilience Grant Program Manager with the City of Minot, ND presented. The Honorable Jane Campbell, President/CEO of the US Capitol Historical Society, served as moderator.
The webinar kicked off with a government official describing small business funding programs from the $2 trillion CARES Act. Businesses can now apply for such programs as the Paycheck Protection Program - designed to help businesses retain employees during the pandemic - and the Economic Injury Disaster Loan - which provides loans of up to $2 million, with a $10,000 advance that won’t need to be repaid. Businesses can apply through any 7(a) government lender and other federally-insured lenders. For a full list of CARES Act programs, visit the Small Business Association’s website.
John Zakian - Minot, ND: Zakian focused on assistance for small to mid-sized businesses. He reminded participants that this is the most unusual form of disaster we’ve encountered in generations, so there will be certain elements of the response that will be different from previous disasters.
Most impactful perhaps is that unlike in other disasters, traditional technical support offices, such as the SBA and FEMA, likely will not be able to heavily deploy workers to all impacted areas. Most assistance will be provided remotely. This means that EDOs will be in high demand to provide resources - if not direct technical assistance - on financing programs. Zakian recommended becoming very connected with regional offices of SBA and EDA now if you’re not already. He also advised EDOs to create a list of all local lenders that work on SBA loans and make this a shareable resource to business owners.
Finally, he recommends all EDO staff to read the CARES Act legislation so they are in a good position to assist, or at least refer business owners to appropriate resources.
Brett Doney - Great Falls, Montana: Doney advised EDOs that have existing revolving loans funds (RLFs) to continue doing all they can to allocate resources to these funds. RLFs will play an important role in filling the gaps that other loan programs can’t.
Doney also recommended that EDOs prioritize how they’re selecting businesses to receive funding from a RLF, by perhaps focusing on businesses that were operating well prior to the pandemic, but saw a sudden drop in revenue. Also, for EDOs considering launching a RLF, he suggested not to start from scratch. There are models EDOs can use as a guide.
Finally, Doney said that all EDOs should be keeping in touch with their business community as much as possible, to understand needs.
Vincent DiCara - DiCara Training and Consulting: DiCara stressed three important points about small businesses: 1. Businesses need money and they need it now; 2. The most efficient way for businesses to receive funding will be on the local level; and 3. Entrepreneurs play many roles and will be especially strapped for capacity now, so programs that offer the easiest access to financing will likely be the ones they choose.
DiCara noted that the Department of Housing and Urban Development’s (HUD) Community Development Block Grants (CDBG) may be a useful program for EDOs to use to support businesses. These grants are often focused on low to moderate income areas and used to meet community needs. DiCara suggested EDOs become well-versed in these grants. CDBG programs are detailed here.
Dicara also noted that technical assistance for business owners may be available locally by SBDC or SCORE. EDOs should be reaching out to these providers if they’re not already familiar.
Robin Barnes, Resilience Resolutions: Barnes agreed that the immediate focus for businesses will be cash flow. But she stressed that for EDOs, it’s never too early to consider the future. EDOs can help businesses today by preparing them for tomorrow. While most efforts will be focused on recovery, EDOs should also build in capacity to address resilience.
Barnes offered these strategies:
- Conduct needs assessments on business conditions. Survey businesses. Don’t forget places that are unseen. This helps you build programs that address needs.
- Help business access programs. Partner with local entities people if you can. Build online resource guides if you can, so businesses can best access the information.
- Drive as many federal resources to your community as possible.
- Leverage private philanthropy to help with resources such as technical assistance.
- Investigate how businesses can contribute to recovery efforts by repurposing products or services.
- Provide market research to small businesses, which will help businesses that survive meet the new reality.
- Monitor global climate and health trends and determine how businesses may be impacted. Remember, many businesses may start to reopen during this year’s hurricane season. What challenges might that present?
- Don’t overlook the under-resourced communities.
- Help businesses that will not succeed. These businesses will need assistance developing an exit strategy.
- Find the silver lining. Be a positive influence for your business community.
Q&A
In the Q&A following the speakers’ presentations, the conversation continued to focus on small business assistance, but also touched other areas.
Brett Doney suggested that if EDOs currently don’t have an RLF that now is the perfect time to start one, because there will always be gaps between business owner needs and what’s available from government programs. In regards to applying for grants from the Economic Development Administration (EDA), Doney stressed to always speak with your local Economic Development Representative (EDR) or the EDA Regional office before starting an application. (EDA contacts are here.)
When asked about basic steps that EDOs can help businesses recover:
John Zakian reiterated that most CARES Act loans will go through established SBA lenders, but there’s also discretion to work with others. So building that network of lenders will be essential. He suggested reaching out to other banks and credit unions to inquire if they will participate in CARES Act loans.
Zakian said EDOs will initially be a technical resource for business owners, working to direct important and relevant information. He noted that great EDOs will help put business owners in a place to make good decisions. And he reminded that EDOs should try to remain optimistic and calm the waters, given the highly unusual situation.
Brett Doney added that debt may not be the right answer in a time of crisis. His organization is developing strategies to help businesses adapt to new operations due to COVID-19, and also help businesses enter a “hibernation mode”, by temporarily cutting costs and generating cash where possible.
Robin Barnes offered the following advice on addressing duplication efforts from local entities. She said this is always a challenge, but more so during a disaster. Barnes’ advice is that the largest EDO should become the conveener/coordinator of other groups, by scheduling weekly calls, gathering resources to develop resource guides, and being a main point of contact that can refer to other organizations.
At the end, the panelists shared closing thoughts:
Robin Barnes: “It’s not too early to start to think about recovery and next year. Because the decisions you make today need to take in account assumptions for the future.”
Vincent DiCara: The more local you can be to get small business assistance, the better off you will be. It will get you quicker results. Keep in touch on the local level. “
Brett Doney: “Take care of yourself. Your partners. Your clients. This will be a long haul. This isn’t a sprint. It isn’t a marathon. It’s an ultra distance. But we will make it through.”
John Zakian: “Take advantage of IEDC resources. They have a wealth of resources. EDOs are going to be a clear point of contact. Remain calm. Don’t get overwhelmed. We are in the middle of a firestorm, but we will get through this.”
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