While lawmakers in nearby Capitol Hill were hashing out America’s biggest economic rescue plan, restaurant owner Simone Jacobson saw her bills piling up fast. She was already in debt and had no savings. So she turned to dating app Bumble.
Not to find a date, but to get financing.
After laying off her staff last month, Jacobson said she had about $20,000 in monthly costs such as property taxes, security systems and pest control. So, on March 25 she applied for one of the $5,000 grants that Bumble was offering women-run small businesses. Two weeks later, Jacobson got the cash. She plans to use the money to pay for two months’ worth of health insurance costs for the 28 employees she let go from her Washington, D.C., restaurant, Thamee.
“I didn’t have time to wait for government funds, my staff needed to know now whether they still have health care,” said Jacobson, 35, who runs her Burmese restaurant with her mother. “The grant has truly been a godsend. Governments and banks are slower machines.”
As funds from an unprecedented $349 billion federal rescue package are onlytrickling outmore than a week after its April 3 debut, small-business owners are tapping other means of financing to help avoid a cash crunch. Women-led companies like Bumble and female billionaires such as Spanx Inc. founder Sara Blakely are giving millions of dollars in grants to small businesses in need of a lifeline amid the coronavirus outbreak.
That money can’t come any sooner. One in ten small businesses are less than a month away from closing permanently, according to a pollreleased by the U.S. Chamber of Commerce. About 56% of those businesses favor financial relief in the form of direct cash payments.
Firms run by women and other minority groups are particularly hard hit because they don’t always have connections and access to resources that other groups have to survive, according to Elizabeth Gore, co-founder of Hello Alice, an incubator for startups that prioritizes women and other underrepresented entrepreneurs.
McKenzi Taylor, for one, isn’t optimistic about getting government funds anytime soon, if at all. Taylor, who organizes high-end weddings in the desert and red rock landscapes surrounding Las Vegas, hasn’t heard from the Small Business Administration since applying for a federal Economic Injury Disaster Loan — an emergency cash advance of as much as $10,000 — last month.
So in between watching webinars giving advice to small businesses and dealing with clients postponing or canceling their nuptials, Taylor has spent the past week applying for grants offered by Bumble, Blakely’s foundation and Hello Alice.
“I’m not holding my breath about getting government money,” said Taylor, 35, founder of Cactus Collective Weddings. “So I’m applying for grants every day so my business can survive.”
Taylor, a sole proprietor, said she had business costs of about $27,000 last month for things like advertising, a virtual assistant and insurance. She’s applied for a personal loan from her bank, unemployment insurance as well as Family and Medical Leave to get by. Her husband, who runs an events-management business, also isn’t generating income since the lockdowns.
Bumble, founded by entrepreneur Whitney Wolfe Herd, is offering 150 grants totaling about $1 million to small businesses globally, with the first wave of recipients being U.S. restaurant owners and others in the food services industry, according to a company spokeswoman. Spanx’s Blakely is giving $5,000 grants from her foundation to help female-run small businesses. Recipients of the $5 million program will be notified in a few weeks, spokeswoman Charlotte Bissell Garner said.
More than 55,000 business owners, regardless of their gender, have applied for Verizon Communications Inc.’s $2.5 million grant program, according to spokeswoman Bernadette Brijlall. The telecommunications giant has partnered with the Local Initiatives Support Corporation to disperse $10,000 grants to more than 200 small business owners who are women, people of color and others in historically under-served places. Grant recipients will be announced later this week, Brijlall said.
Small businesses, which account for almost half of private employment in the U.S., are the growth engine of the nation’s economy and their shuttering under confinement orders has contributed to historic jobless claimsof 16.8 million in three weeks. About 45% of small firms are owned by women, a percentage that’s been rising in recent years, according to a survey of more than 39,000 businesses by UENI, a digital platform for small businesses.
Hello Alice, the startup accelerator, is offering emergency grants of $10,000 to help them get by. The first recipients — which will be notified this week — will be those that pivoted their business models for the “Covid-19 marketplace” by producing goods and services for the health system and others on the front line of the pandemic, co-founder Gore said.
“We want to be helpful in this middle, grey zone,” Gore said.
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