What Support Can Small Businesses Count On During A Pandemic?

how dropshipping works What Support Can Small Businesses Count On During A Pandemic?

Because of the coronavirus, the number of clients and revenues of many entrepreneurs dropped sharply, sometimes to zero. So let’s find out what measures to support business in this difficult time are offered by the state.

In creating this article, I used the calculator by Myfin.us, which made my calculations much easier.

In November and December 2021, small and medium-sized businesses affected by the pandemic can apply for the following support options:

  • Loan restructuring.
  • Concessional loans
  • Grants

Let’s look at who can take advantage of them and under what conditions.

Restructuring

It is possible to ask the creditor to reduce the size of monthly payments by extending the payment term, postponing debt repayment to a later date, or otherwise revising the payment schedule for existing loans and credits.

Everyone can apply for restructuring: companies, self-employed, and self-employed alike.

According to the recommendations of the regulator, banks, microfinance organizations, and credit consumer cooperatives should not refuse to restructure, even if the client has already changed the payment schedule. This will help the borrower to avoid new delinquencies and deterioration of credit history.

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    In addition, the Central Bank of America recommended lenders not penalize debtors for arrears.

    Preferential loans

    There are now two business loan programs with government support:

    Business Revitalization Loans at 3%

    Under the terms of the program, this money can be used for any business needs, including paying salaries and debts. But the credit funds can not be used for charity, payment of dividends, or the purchase of their own shares or stakes in the capital of the company.

    The companies included in the list of the hardest-hit industries can get the credit, in particular, cafes, fitness centers, cinemas, dry-cleaners, and travel agencies. But only those organizations that have already received a preferential loan in 2020 at 2% per annum to resume operations, or new companies that registered and hired employees after July 1, 2020, will be eligible for the preferential terms.

    You can get a 3% loan until December 30, 2021. After that, the preferential rate will be in effect only if the company manages to retain at least 90% of its full-time employees.

    If this requirement cannot be met, the bank will charge the same interest rate as its regular loans with similar amounts and repayment terms.

    The maximum loan amount is calculated using the formula:

    Minimum wage ($9,620) × number of employees × 12 months.

    The loan is given for 1.5 years. You should not make any payments for the first six months; you should repay the debt in equal installments, including interest accrued during the last 12 months of the loan.

    Loans for small and medium-sized businesses at 1.5%

    Under the program to stimulate lending to small and medium-sized businesses in any industry, as well as self-employed people, can get or refinance loans at a rate of 1.5% per annum for up to three years.

    Entrepreneurs have the right to spend this money for any purpose, including paying salaries or replenishing working capital.

    Companies from the affected industries can also obtain a loan guaranteed by the SME Corporation at a rate not exceeding 0.8% per annum with deferred payments on principal and interest for up to three months.

    Employee grants

    Small and medium-sized businesses on the list of industries needing pandemic support can count on this type of state support.

    The size of the subsidy under this program, although small, has a significant advantage – this money will not have to be returned.

    Organizations will receive one minimum wage ($12,792 as of January 1, 2021) per employee. The companies have the right to spend this sum on any urgent needs.

    Apply for grants will be able to organizations and individual entrepreneurs (including those without employees) who are on July 10, 2021, included in the register of small and medium enterprises, on July 1, 2021, they had no arrears in taxes and insurance premiums for more than $ 3000, they are not removed from the register. They are not in the process of elimination.

    To receive the subsidy, you must submit an application to the Federal Tax Service (FTS) no later than December 15, 2021.