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How Do Atlanta, Manchester and Vancouver Help Small Business Companies?

How Do Atlanta, Manchester and Vancouver Help Small Business CompaniesIn accordance with the Federal Reserve Bank of New York report, only about 20% among financially stable small businesses have enough money holdings to operate in a common manner for 2 months in the revenue absence. There are less than 10% less financially wealthy small business companies. Therefore, governments have urgently built up programs to assist SBA. One of the main patterns is to provide loans for salaries (usually 70–80%). Moreover, for example, in the United States, such loans can be transformed into grants if firms do not eventually fire workers (or hire new ones).

Let’s consider how diffeent countries help small business owners overcome financial issues.

The USA: Atlanta, Georgia

In Atlanta, GA, the $ 350 billion Small Business Administration loan pattern started working last Friday. Companies with a staff of up to 500 people, inclusive, can get loans in GA. Money can be spent on salaries, rent, utilities. If the company does not fire employees, the loan amount spent on such high priority expenses within eight weeks between March 1 and June 30 will be forgiven – both the body of the debt and the interest.

However, the influx of people with intent to get funds was so large, and the measures to ensure the functioning of the program were so unprepared that this provoked numerous complaints from both businesses and banks. The latter complained that the Ministry of Finance and the SBA did not explain many details, including on loans, did not provide forms for filling out applications for the new program, and the form on the SBA website contained many fields that it was not clear how to fill out (besides, manually) , and the site was constantly hang up.

The next day, the SBA has filed requests for 220,000 loans worth about $ 66 billion, citing the WSJ from a letter to Congress from the presidential administration asking for more funding for the program.

Difficulties with the issuance of loans are associated, among other things, with the fears of banks. They must lend to small business companies from their own funds and then ask the SBA to reimburse them within seven weeks. If borrowers meet the terms of the loan and spend the money on their specified needs, SBA will reimburse the bank in full. If the money is used for other purposes, the borrowers themselves will pay the banks within two years.

Canada: Vancouver, British Columbia

The Canadian authorities have pledged unlimited aid and announced the allocation of 202 billion Canadian dollars ($ 143.4 billion). Incentive measures include a deferral in the payment of taxes, state guarantees for loans, compensation of 75% of salaries to employees of any company, regardless of size, whose revenue has decreased by 30%.

Great Britain: Manchester

Four packages of measures to help companies and workers weather the crisis are estimated at 60 billion pounds ($ 75 billion). Plus government guarantees for loans are worth 330 billion pounds, which is equivalent to 15% of GDP.

An employer from Manchester can apply for a government grant that will cover 80% of the salary of temporarily unemployed employees – up to £ 2,500 ($ 2,915) per month. However, these payments will begin towards the end of April, and the launch of a similar program for payments to self-employed is scheduled for early June (they will also be able to receive 80% of earnings, which will be calculated as the average over the past three years). Experts point out that these measures are being implemented too slowly, given the rapid rise in unemployment.

Small business companies can also participate in the state options of lending to facilities whose occupations were forcedly suspended. By April 2, the Ministry of Finance had accepted 130,000 applications, but only 983 was approved. True, on April 3, Finance Minister Rishi Sunak claimed that the companies had already deposited 3.5 billion pounds ($ 4.3 billion).

The issue arose with the fact that some banks require companies to ensure personal guarantees or collateral. The loan is taken out in the amount of 25,000 to 5 million pounds, the state guarantees the bank a return of 80% if the borrower cannot pay. But “lenders can demand collateral,” says UK Finance (formerly the British Banking Association).