The economic devastation triggered by the pandemic was almost unprecedented in the United States and globally. Indeed, small businesses in New York City are sweating hard.
According to Yelp reports, over 150,000 American businesses closed this year due to the pandemic by August 11. Of this number, 91,000 (accounting for 59% of total closures) were permanent shutdowns.
This was particularly alarming as a bulk of these were American small businesses. You will agree this is no good news for the American economy as almost 45% of economic activity in the United States is driven by companies with fewer than 500 employees. These SMB businesses account for 50% of the total American labor force.
What should New York small businesses know about PPP loans at present?
Well, to alleviate the economic impact of the pandemic on small businesses, Congress passed the CARES Act. The PPP (Payment Protection Program) loan was one of the most attractive stimulus packages in this act streamlined to small businesses to keep them afloat (via sustaining their payroll) amid the COVID storm.
This was chiefly because of the leniency associated with the loan package. Indeed, there was a significant chance of forgiveness upon the appropriate application of the loan. It was interesting to note that over 5 million people applied for the PPP loans, with over $520 billion distributed in total.
Well, it was unfortunate that the PPP package ended on August 8, and since then, there has been a legislative gridlock in Congress to push through another PPP package.
The SBA Economic Injury Disaster Loan (EIDL) Program
While PPP loan applications have ground to a halt, the SBA (Small Business Administration) is yet taking applications for the EIDL program. Like in New York, small business owners (even non-profits) can leverage the EIDL facility in other American states.
Take note that the EIDL program is significantly different from the EIDL Advance. The latter is a grant offering from SBA. More noteworthy is that the Advance variant of the EIDL has shut down since July after exhausting its allocated $20 billion.
Payments for the EIDL program are deferrable for the first 12 months, with loan terms stretching up to 30 years. Regarding interest rates, NGOs would have to pay 2.75% interest, while businesses would pay 3.75% interest.
Main Street Lending Program (MSLP)
Suppose you don’t fancy that SBA EIDL program, you could go with the MSLP from the Federal Reserve. In June, the Fed launched this loan facility that gives you sizable loans – as high as $300 million or as low as $250,000 – structured into 5-year plans.
This is equally open to non-profits and for-profit organizations, although the eligibility criteria may differ across both categories. This loan package is more optimized to companies that are already financially vibrant with tangible proof in your balance sheets’ financial health.
So if you are on the verge of shutting down and desperately looking for that life-saver loan facility, the MSLP may not be for you. These loans have their interest rates tied to LIBOR and an extra 3%.
LIBOR rates (typically accepted as standards in the lending world) comes with interest rates fluctuating within the region of 3.16% to 3.25%.
Interest for MSLP loans is deferrable within the first 12 months, while the principal payment is deferrable within 24 months. By the 4th or 3rd year, 15% of the MSLP principal (in addition to the interest) becomes payable. By the 5th year, the extra 70% gets payable (in addition to the interest).
Community Development Financial Institution (CDFI) Loans
These loan facilities are targeted at easing accessibility of credit for businesses in low-income areas. The U.S. Department of the Treasury’s CDFI Fund finances approved CDFIs who satisfy eligibility requirements. Some of these CDFIs – as readily found across New York and the United States – cut across traditional loan funds, credit unions, and venture capital funds.
While battling for funding as a small business in New York, you will reckon that suffering a cyber-attack could be the final straw that breaks the camel’s back, sending your business packing for life.
The increased need for cybersecurity in NYC
The COVID pandemic has ridiculously been a party for hackers, as it made most businesses more vulnerable. Reports from ReedSmith showed that in the heat of the pandemic in March, cyber-attacks and scams increased by a gigantic 400%.
Consequently, by April, Google was busy blocking 18 million malware and phishing emails every day related to COVID-19. This even further emphasized the urgent need for robust cyber insurance coverage for small businesses.
Indeed, as the pandemic rages – consequently heaping the emphasis on loan acquisition – you should equally prioritize your security.
Yes, some robust IT consulting firms in New York can design powerful cyber security infrastructure for you, but you still have your fair share of responsibility to sustain the impenetrability of your cyber security NYC.
Care to know some practical steps?
The age of weak passwords is well over
Some years back, having a readily predictable password like “Password1234” wouldn’t do you much hurt. However, today, you dare not have weak passwords and expect hackers to let you go unpunished. We fervently advocate for small businesses in New York City to religiously observe a strong password policy.
The larger the variety in your password, the stronger it is. It is safer to combine long strings of characters (with varying fonts) with symbols and numbers. Reliable free password generators can help you with these complex combinations.
This ensures that a hacker attempting to compromise your system has far more work on his hands to access your passwords. The way you share your passwords within your company matters a lot too.
LastPass is well famed for securing access to your passwords. Leveraging encryption, it substantially keeps off hackers from penetrating your password cache. It is also vital to change your passwords frequently to reduce the loopholes in your cybersecurity in NYC.
For most of the businesses we consult for, we advise them to overhaul their passwords every 3-4 months. When you change your passwords, energetically avoid patterns, ensuring that every new password is drastically different from its predecessor.
Thoroughly educate your staff on keeping safe on the internet
Yes, there is only so much you can do as a small business owner in wading off cyber-attacks if your employees don’t know how to sniff hackers. Your employees must know how to detect compromising files and emails and how to handle them appropriately.
What are the red lines they shouldn’t cross? How well can they smell suspicious unsolicited emails they shouldn’t open? You should invest significantly in your employees’ cyber-enlightenment because you are only as secure as they are.
When your employees receive emails supposedly from a co-worker containing (or requesting) sensitive information, it pays to reach out to that colleague to confirm personally. Also, it would help if you forbade your staff to download attachments that haven’t been scanned for viruses.
Of course, the antivirus program of your employees must be sophisticated and always updated. Don’t worry, such extra vigilance would save your life down the line.
Ensure file sharing is executed with secure programs
File sharing is one big loophole where cyber vandals compromise many small businesses in New York. Of course, we all understand the need to reduce your overhead cost, hence your choice to go with ready file-sharing programs like Dropbox and Google Drive.
Nonetheless, suppose you are keener on your I.T. security. In that case, you may want to invest in far more secure programs like SecureDocs and Egnyte that leverage comprehensive encryption technology in keeping your files safer.
However, if you can’t afford those advanced solutions, you yet keep to such affordable cloud-based sharing solutions like Drive and Dropbox, albeit with a stronger emphasis on best practices.
It is crucial to relentlessly check your files to see which parties have access. Be fervent and unbending in your file-sharing policies. If a department or a particular employee doesn’t need a file, they shouldn’t have access at all.
Editor access shouldn’t be readily granted. Concerned departments or individuals who need to work on a file should send permission requests. Lastly, it could prove catastrophic sharing sensitive information over such free (or cheap) cloud-based sharing platforms.
For more information on how you can thrive through the pandemic, we have curated the resources below for you to check out.
Government Assistance Programs
- Checklist and Information Guide regarding available funding – US Chamber of Commerce (complements of Philip Mehl, CPA in upstate New York)
- The Small Business Owner’s Guide to the CARES Act
- Comprehensive Overview of the CARES Act– Webinar recording reviews the SBA EIDL and the Payroll Protection Program criteria
- SBA Coronavirus Loan Resource website and Online Application
- Payment Protection Program
- CohnReznick Obtaining Covid19 financial relief
- Working from Home Strategies During COVID-19
- Microsoft Teams Training courtesy of Bigger Brains (FREE)
- Business Continuity Template
- FINRA Small Firm Business Continuity Template
- Vistage Corona Virus Resource Center
- Handling Packages and Mail during the pandemic (Hackensack Meridian Health)
- Virtual Prospecting with Caryn Kopp
How can we help?
For us at Triada, happiness means keeping your totally safe and secure from the prowling cyber criminals stacked on the internet. We have a seasoned and sophisticated team dedicated to perfecting your cyber security. Don’t delay, hackers could attack you the next second, and sadly your business may not survive it. Schedule a free consultation with us today, let us keep you safer online.