COVID-19 and small businesses: A look back

In March 2020, the COVID-19 pandemic hit the United States in full force. The result was unlike anything we have seen in over a century. Businesses right here in Salt Lake City and beyond were hit hard by a disease no one saw coming and even fewer understood. The pandemic’s impact varied depending on where you were in the country, and certainly, some industries’ demographics suffered more than others. And while the pandemic is far from over, many small businesses are trying to move on. Indeed, people are trying to move on. Let’s take a closer look at how COVID-19 impacted small businesses across the country.

Small Businesses in Utah and Beyond Make a Pivot

A large number of small businesses around the country were simply forced to shut their doors. And banks providing business banking, business checking, and small business loans had trouble servicing so many companies going out of business. And while some may never reopen again, others had to pivot in order to survive, hoping that they wouldn’t have to shut down again.

Many companies had to trim staff, cut pay, or simply shutter their stores. But not all did. Take Schmidt’s Pastry Cottage, a staple in Salt Lake City. When the pandemic initially hit and owner Steve Borg walked into the bakery, his staff was pretty worried. His response? “Don’t worry about it; we’re going to bake bread.” They decided to bake bread and give it away for free until they couldn’t anymore. In the first two days of his effort, no loaf was left behind. People responded with donations and purchases. Even people in states as far away as Texas and New York were sending donations. Even suppliers were donating ingredients or giving discounts.

Yet, for many Utah small businesses enduring the economic crisis brought on by the pandemic, their biggest lifeline was the coronavirus aid package passed by Congress. The $2.2 trillion Coronavirus, Aid, Relief and Economic Security Act, or CARES Act, was designed to provide assistance to businesses and citizens who needed help during the COVID-19 crisis. But the CARES act went beyond businesses. It also extended unemployment benefits to include independent contractors and gig workers. There were several ways that the Small Business Association, in combination with the federal government, helped businesses stay afloat.

The Paycheck Protection Program and Economic Injury Disaster Loans

Two of the primary lifelines businesses received during the pandemic included the Paycheck Protection Program and Economic Injury Disaster program. The Paycheck Protection Program covered sole proprietors, the self-employed, nonprofits and companies with fewer than 500 employees that were going to use the funds to sustain their businesses through the downturn. The loans are two-year terms at a 1% interest rate, and some loans were forgiven if the funds were used specifically for employee pay.

The Economic Injury Disaster Loans were provided to ensure businesses could meet their obligations and pay for normal operating expenses. EIDL loans were considered loans to ensure companies had working capital to help them survive and continue normal business operations as the pandemic raged on. In total, the SBA provided up to $2 million to help companies meet obligations and operating expenses.

Both of these government-backed programs were operated as critical lifelines to small businesses both here in Utah and all over the country. Business owners from coast to coast used these loans to ensure they could continue to pay their employees and keep their operations humming even when many of their customers were themselves hunkering down. Here at First Utah Bank, we were proud to provide businesses with assistance in getting approved for PPP and EIDL loans.

How Businesses Are Moving Forward

To meet the challenges posed by the pandemic, businesses around the world had to react in agile and decisive ways. Now, with the worst of the pandemic behind us, it’s time for businesses to seek out new ways to emerge stronger as the recovery takes hold. But how can businesses in Utah and beyond do this? You may not need a business banking loan, but there are certain steps you can take to ensure you are strong as you move into the future.

First, consider an after-action report. Collect data and insights on the lessons your business learned from the pandemic. Use that data to prioritize actions to enhance your overall business value and ensure you are resilient and ready for the next crisis. Second, make sure you have a guidebook in place just in case another crisis should strike. And finally, always keep a cool head. Stay calm and carry on!

Here at First Utah Bank, we’re proud of how our team rallied together to ensure businesses could stay afloat during the COVID-19 pandemic. We helped businesses all over our states qualify for loans and offer advice that kept their businesses alive. Are you a Utah-based small business looking for a business bank you can rely on in tough times? Look no further than First Utah Bank.