Small businesses are struggling to find relief during the COVID-19 pandemic. There have been a lot of observations and speculations about what Startups should do and can do to help their business survive.
It’s a no-brainer to say that startups should re-forecast and re-strategize for 2020 and probably 2021 as well, given the economic downturn caused by measures to contain the virus.
Customer research startup, Wizer Feedback Ltd. surveyed more than 100+ venture capital funds back in March, investors include – institutional, corporate, venture capital, angels & incubators around the world.
They found out that more than half of the participants are either investing less or are holding off on investments completely.
An interesting piece of information (although not surprising) in the same study was that – Productivity, Data & Analytics, Security & SaaS were among the most attractive industries.
It makes sense for these industries to be in the top 10, with work from home becoming the new normal, it’s important to keep people engaged and productive, with respect to the consumers, and to keep companies informed and safe, on the enterprise-side.
With all this information in mind, the question that comes up is –
“What are the funding options for COVID affected startups then?”
1. Disaster Assistance – The Government
If your startup or Non-Profit has been severely affected by the pandemic, the government is there to help.
For this you need to research what kind of relief plan your county has come up with, will obviously vary from country to country.
The United States Small Business Administration (SBA) is working directly with state governors to provide disaster assistance loans to help those companies recover. Here small business owners in all U.S. states, Washington D.C., and territories will be able to apply for an Economic Injury Disaster Loan advance of up to $10,000, these loans also have low-interest rates. You can apply for the loan through the SBA website.
The Small Industries Development Bank of India (SIDBI) has come up with, Startup Assistance Scheme (‘CSAS’).
The objective of this scheme is to provide quick working capital, startups can receive a loan of up to INR 2 crore.
The purpose of this scheme is to provide interim support to startups whose cash flow and liquidity have been adversely impacted by the COVID-19 pandemic. This assistance can be used for various working capital requirements like salaries/wages, rent, administrative expenses, payment to vendors etc. The loan may also be considered against GST refunds.
You can check your eligibility and apply here for the assistance.
The European Commission has unlocked €8bn to allow the European Investment Fund to issue special guarantees, to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs and others hit by the economic impact of the pandemic.
Different EU countries have also come up with their own relief packages and schemes.
Interesting Read :
The Ultimate Guide for Businesses to function better with Corona Virus
The French government had already unveiled a series of measures, aimed at helping businesses cope with the impact of the pandemic with the latest step being – rolling out a €4bn liquidity support plan dedicated to its startups.
U.K. government, in April, unveiled a £1.25 billion fund consisting of two packages: a £500 million co-investment fund supported by the government and the private sector, as well as £750 million in grants and loans through the U.K. innovation agency.
They also have The Future Fund – It’s aimed at the unlisted UK registered companies which have already raised more than £250k in previous funding rounds in the last 5 years, and which can secure at least another £125k in private investment which the government will then match.
Germany has pledged 2 billion euros ($2.2 billion) to help its beleaguered startups, but the policy has stalled since there’s confusion about its implementation.
Portugal, announced a €25 million package of startup relief measures, consisting of various incentive schemes consisting of incubation services, minimum wage packages up to ten employees, and loans.
2. Partech Entrepreneur III Fund
Partech is now one of the largest seed investors around the globe, with its seed funds exceeding $300M in total and topping 160 investments in 22 countries across Europe, US and Asia. Partech seed funds are run by a dedicated team of 10 investors made of former founders and startup employees, located in San Francisco, Paris and Berlin.
Investments are focused on 6 verticals revealed and accelerated by the 2020 crisis:
- Future of Health: Personalized, Online, AI-assisted
- Future of Work: Remote, Collaborative, Continuous education
- Future of Commerce: Software-enabled, Social, Instant
- Future of Finance: API-based, Data-driven, Decentralized
- Future of Mobility: Autonomous, Multimodal, On-demand
- Future of Computing: Edge, AI, Wireless
3. Facebook Small Business Grants Program
Facebook’s Small Business Grants Program is offering $100 million in cash grants and ad credits for businesses impacted by COVID-19.
The program will help you with – Keeping your workforce going strong, with rent and operational costs. Will connect with more customers and Support your community.
Businesses in more than 30 countries will be able to receive a grant from Facebook, the eligibility criteria:
- If you have between 2 and 50 employees
- If you have been in business for over a year
- If you have been facing challenges due to COVID-19
- If you are in or near a location where Facebook operates
Apparently the two-week window to submit your application has closed for the United States. But remains open for Canada.
Facebook has also launched Business Resource Hub for startups and entrepreneurs, where you can find tips, training and more to help you stay open and connected to customers.
Check your businesses eligibility and apply here.
4. Visa Foundation
The Visa Foundation in April announced a commitment of two programs totalling $210 million to support small and micro businesses, aligning with the Foundation’s long-term focus on women’s economic advancement and inclusive economic development, and to address an urgent need from local communities following the spread of COVID-19.
The first program of $10 million is designated for immediate emergency relief to support charitable organizations on the frontlines responding to the COVID-19 pandemic.
The second program is a five-year, strategic $200 million commitment to support small and micro-businesses around the world, with a focus on fostering women’s economic advancement. This action expands the Visa Foundation’s long-standing support for small and micro businesses globally.
The funds from the Visa Foundation will provide capital to non-government organizations (NGOs) and investment partners supporting small and micro-businesses.
5. Youth Business International – Google
Youth Business International announced that they will deliver a Rapid Response and Recovery Programme, funded by Google.org, to back underserved micro, small and medium-sized businesses, sustain livelihoods and support communities.
The programme will be implemented in 32 countries across Europe, the Middle East, Africa and Asia-Pacific. It will focus on the most affected business owners, particularly underserved business owners including young people (aged 18-35 years), women, and refugees and other migrants.
The members and delivery partners will implement a holistic package of emergency support, including crisis helplines, targeted advice and signposting, training, mentoring and webinars with even Google employees volunteering their time to share their knowledge and expertise, helping business owners to upskill and adapt to the challenges.
Interesting Read :
Experience better remote working this lock down with 17 convenient practices
6. Amazon’s Neighborhood Small Business Relief Fund
By May 20, the Neighborhood Small Business Relief Fund had disbursed over $11 million in cash grants and free rent to more than 900 small businesses.
This fund is intended to help support neighbourhood small businesses in Seattle and Bellevue. Eligible small businesses will need to – have fewer than 50 employees or less than $7 million in annual revenue
As specified on the page, retail locations owned by publicly-traded corporations will not qualify.
You can check the eligibility and how to apply here.
7. GoFundMe Small Business Relief Initiative
GoFundMe is the world’s largest social fundraising platform. And Yelp is the company that connects people with great local businesses.
You definitely must have heard about both of them at some point, be it in movies or social media.
The interesting part is that these two companies, along with Intuit QuickBooks, GoDaddy, and Bill.com, have partnered together and come up with the program – Small Business Relief Initiative – here the partners have pledged to donate up to $1.5 million in donations.
Once that fund has been exhausted, GoFundMe will continue to issue $500 in matching grants to qualifying businesses. This way the business will be able to raise money and inspire the community to help and make donations/contributions.
Check out the eligibility criteria and conditions.
Times are tough and we all need to come together, it’s not just the virus we need to fight but also the disastrous aftereffects of the lockdown that is currently unavoidable.
Steps like these, be it an initiative by the government or be it huge companies restores my faith in the global community.
It’s in our nature to survive and helping each other right now will do exactly that. Help your local business to sustain themselves, and contribute in any other way possible.
Let us know about any other funds or initiatives that aren’t included here.