Will Government Grants & Financing Be Enough to Save Small Business Worldwide?



Will Government Grants & Financing Be Enough to Save Small Business Worldwide?
There’s no arguing the fact that starting a business in a pandemic , or even just keeping it afloat through its challenges, is hard. However, there are tools you can use to help you achieve any ambitious goals. Technology definitely is at the foremost of that list because adding more innovation to your small business can help solve many problems and adjust to the new consumer needs. The issue is financing as the majority of small businesses are suffering from the lack of cash flow in a crisis. Governments are trying to solve this problem by offering a wide range of relief and financing options. Small business grants, in particular, are doing a lot of good to keep economies going by keeping SMEs alive.

Every government has its own approach to COVID-19 small business relief.


How Governments Fight the Pandemic by Supporting Small Businesses: Global Overview The USA


Small businesses in the US have a wide range of grants they can use as support for various purposes. The majority of those were running for a while. Therefore, they weren’t instituted specifically to help relieve the coronavirus crisis, like the Paycheck Protection Program was. However, a savvy business owner definitely needs to know all of their grant options.

The Small Business Administration did announce the launch of the Shuttered Venue Operators Grant program in response to COVID-19. This grant can offer the most hard-hit small businesses and non-profits up to 45% of their gross earned revenue. The program’s budget is $15 billion.

Other small business grants that US business owners could apply for include:

  • Small Business Innovation Research Program

  • Businesses that participate in federal research are eligible to apply. This program is extremely competitive.

  • USDA Rural Business Enterprise Grant Program

This program specifically supports the smallest businesses in rural areas.

  • Small Business Technology Transfer Program

This is another highly competitive program with a focus on R&D. Only businesses that officially collaborate with research institutions are eligible.

  • SBA State Trade Expansion Program

This program offers support for small businesses trying to start exporting their products.

  • US Department of Commerce Minority Business Development Agency.

This body offers a variety of targeted grants that should help minority-owned small businesses. Those were hit the hardest by the pandemic crisis and struggle to get access to other financing and support programs.

However, while US small business grants are versatile, the main focus of the government response to the COVID-19 crisis was the PPP. It’s currently approaching the third round of funding and the sum total of this program is nearing a trillion dollars. The program is facing a lot of criticism. However, the sheer scope of it is unmatched by any other country.


Australia


The Australian government didn’t provide such an exorbitant amount for the COVID-19 rescue programs for small businesses. However, its varied financing and relief programs currently total at around $200 billion. Leading coronavirus financing efforts in Australia include the SME Loan Guarantee Program, rescue packages dispensed through multiple banking measures, boosts to employer cash flow (tax-free), support for training and apprenticeship programs (up to 50% of the trainee/apprentice salary), and an extensive business investment support program.

In Australia, the government is very active in offering a variety of support measures that aren’t focused on direct funding. It’s not a surprise seeing how hard the country’s economy had been hit. Australia’s GDP is expected to contract greatly plunging the country into a deep recession. In spite of this, small businesses can find some support using programs like:

  • JobKeeper Payment

This program will help small business owners and sole traders pay salaries if they are deeply affected by the COVID-19 crisis.

  • Business Resilience Package

This is a small business help program in Victoria that includes cash grants, cash flow support, and tax relief.

  • Northern Territory in Australia has grants for business improvements, hardship packages, and a separate branch of support for affected tourism businesses.

  • Queensland government also offers various packages for relief and support as well as resilience grants for fishing businesses. Also, there is a dedicated support program for tourism and hospitality businesses.

The list goes on as every territory in Australia has a wide range of local support grants as well as tax and debt relief options.


The UK


The UK government offers different financial support programs for businesses affected by the COVID-19 pandemic . The options vary and aim to offer help with specific business needs. The programs include:
  • Coronavirus Job Retention Scheme.

This program helps employers cover salaries during lockdowns.

  • Claim back for Statutory Sick Pay paid to employees due to coronavirus.

  • Tax relief programs that allow businesses to defer payments of certain taxes on account of being affected by the COVVID-19 pandemic.

  • Self-Employed Income Support Scheme.

This scheme offers grants to the self-employed who will experience a significant reduction in profits due to the pandemic.

A complete list of grants and loan options offered by the UK government is truly extensive. Therefore, small businesses in Britain need to research them thoroughly as they can apply for several types of grants and other support. Note that support options for being affected by the pandemic, in general, are different from those offered for the businesses affected by the government-issued lockdowns and other restrictions.

There are also multiple local authority payments and grants you might be eligible for. Overall, the UK government clearly offers one of the most well-rounded response programs to fight the effects of the pandemic crisis.


Canada


The government of Canada is also very thorough in offering a wide range of loans, grants, and subsidies to small businesses affected by the coronavirus . The most prominent of these programs are:
  • Canada Emergency Business Account.

Offering emergency loans with zero interest.

  • Canada Emergency Rent Subsidy.

The program can be used to relieve or get support for rent and mortgage payments.

  • Canada Emergency Wage Subsidy.

Businesses can use it to pay wages or to rehire employees lost due to the lockdowns.

Like many other countries, Canada also offers special loans and relief options for the highest-affected sectors.

There are also specialized lending programs to support minority-owned businesses, such as the Black Entrepreneurship Program and Support for Indigenous Businesses. These loans range from small interest-free options to low-interest financing of up to $250,000.

Note that there are also programs that aim to not relieve the strain of the pandemic but to improve. For example, the Tourism Economic Development and Recovery Fund offer support to projects that can increase the number of visitors to Ontario.


In Conclusion: Will Government Support Be Enough for Small Businesses in 2021?


Any business owner that wants to succeed through 2021 needs to embrace innovation as a part of their strategy . In order to do that and to support your business, as a whole, you’ll need help. Small business grants, as well as various government debt relief and financing programs, can help. It’s essential to research all options available in your region. There are some programs offered by local administrations. Therefore, you need to make sure you’ve explored all available options, not only the ones backed by the state.
The economy will take a while to recover through this global recession. Unfortunately, small businesses are always hit the worst by these crises. Already Bloomberg alerts about the increasing number of failing SMEs, which fall so fast, it’s impossible to see the full scope of the disaster yet. Government financing and support options are already drying out. So entrepreneurs need to act fast.

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