Updated Resources for Women Entrepreneurs & Business Owners

Updated Resources for Women Entrepreneurs & Business Owners during COVID-19

Entrepreneurship is a tried and true way of generating wealth and women are driven to self-employment for its other benefits as well, including the ability to be their own boss, work flexible hours and do something that they are passionate about and enjoy.

Women entrepreneurs have notoriously faced hardships in gaining access to capital, from lack of information and resources and local and state government assistance, to facing cultural biases from investors. Without adequate capital, women cannot make their creative ideas a reality, nor can they afford to maintain the businesses that provide jobs for a significant portion of the population.

Pre-Existing Disparities in Revenue between Women-Owned Businesses & All Businesses

Women-owned businesses make a sizable contribution to the nation’s economy and are continuing to drive economic growth, according to American Express’s 2019 State of Women-Owned Businesses Report. At nearly 13 million in number, they represent 42 percent of all businesses, employ 9.4 million workers and generate revenue of $1.9 trillion.

However, there are still glaring disparities between these businesses and total businesses in terms of size and revenue. The revenue disparity between women-owned and all privately held businesses has increased since 1997. For every dollar that a privately held company generated, women-owned businesses generated 37 cents in 1997 and 30 cents in 2019. In 2019, women-owned businesses had average earnings of $142,900 compared to $474,900 for all privately held businesses and $1.4 million for all firms.

Closing this gap could benefit everyone as more goods and services sold in the nation grows the economy, and makes the nation more competitive in meeting needs of consumers. Moreover, when businesses thrive, so do the owners’ financial positions and their employees’ incomes.

No "One-Size-Fits-All" Approach to Helping Women-Owned Businesses

Increasing the economic potential and opportunity for women-owned businesses requires change on multiple fronts, including policies, practices and attitudes. Indirect help to women-owned businesses can mean family leave and affordable childcare, both of which impact all working women. Direct help for financial growth might include training, access to capital and markets, which can be targeted towards segments of business.

Most importantly, industries and actors within the entrepreneurial ecosystem must consider the unique needs and circumstances of women-owned businesses, since not every business or business owner faces the same obstacles. Below are a few resources that women-owned businesses can utilize to help them recover from economic loss faced during the COVID-19 outbreak.

COVID-19 Relief for Small Businesses: EIDL Loans & PPP

The Coronavirus Aid, Relief and Economic Securities (CARES) Act, which was signed into law by President Trump on March 27, 2020, provides $349 billion in relief for American workers and small businesses. The CARES Act also established several new temporary SBA programs to address the COVID-19 outbreak: SBA Economic Injury Disaster (EIDL) Loans & PPP (Paycheck Protection Program).

At time of writing, the SBA had run out of these funds within two weeks of providing financial aid to small businesses, and the federal government is working on funneling more money to the SBA to carry on their funding programs. However, U.S. Congress reached a deal on a roughly $480 Billion coronavirus relief funding package to continue helping small business and hospitals, and expand COVID-19 testing. This new funding package comes after the initial funds set aside for the U.S. Small Business Administration (SBA) Paycheck Protection Program and Economic Injury Disaster Loan (EIDL) were exhausted in just two weeks — due to over 1.66 million loans for more than $342 billion.

EIDL Loans & PPP

The U.S. Small Business Administration (SBA) reopened the Economic Injury Disaster Loan (EIDL) and EIDL Advance program portal on June 15, 2020, to all eligible U.S. small businesses, private non-profit organization or 501(c)(19) veterans organizations, who are experiencing economic impacts due to COVID-19. The EIDL program, established by the CARES Act, offers longterm, low interest assistance that can alleviate temporary loss of revenue and help cover payroll and inventory, pay debt or fund other expenses.

The EIDL Advance provides up to $10,000 ($1,000 per employee) of emergency economic relief to businesses that are currently experiencing temporary difficulties. These emergency grants do not have to be repaid!

“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the COVID-19 impact. With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional

"The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and non-profits that are facing economic disruption due to the COVID-19 impact."

small businesses and non-profits will be able to receive these long-term, low interest loans and emergency grants – reducing the economic impacts for their businesses, employees and communities they support,” said SBA Administrator Jovita Carranza in the official press release.

“Since EIDL assistance due to the pandemic first became available to small businesses located in every state and territory, SBA has worked to provide the greatest amount of emergency economic relief possible. To meet the unprecedented need, the SBA has made numerous improvements to the application and loan closing process, including deploying new technology and automated tools.”

Small business owners in all U.S. states, Washington D.C., and territories impacted by the COVID-19 pandemic are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. As stated on the SBA’s website, “This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid.” Please note that “successful application” does not mean you have to be approved for the loan. Moreover, loan approval is not necessary to receive the loan advance.

To apply for a COVID-19 Economic Injury Disaster Loan, go to https://lnkd.in/gkjJVFE . For more info, visit https://www.sba. gov/page/disaster-loan-applications.

Paycheck Protection Program (PPP)

The Paycheck Protection Program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program. Just like the aforementioned EIDL Loan Advances, the SBA will forgive loans received through this program if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

As stipulated by the SBA, small businesses can apply for PPP through “any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regu

lated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.”

New Law Adds Flexibility to Paycheck Protection Program (PPP)

President Trump has recently signed into law, H.R. 701, the “Paycheck Protection Program Flexibility Act (PPPFA),” which makes the Paycheck Protection Program (PPP) more flexible for PPP loans originated on or after June 5, 2020. The SBA will now forgive loans received through this program if all employees are kept on the payroll for 24 weeks, and if 60 percent of the funds is used for payroll. The other 40 percent can be used for rent, mortgage interest, utilities and other costs.

"The SBA will now forgive loans received through this program if all employees are kept on the payroll for 24 weeks, and if 60% of the funds are used for payroll."

Changes by the PPPFA, include: • Extending the “covered period” during which businesses must disburse their PPP funds from eight weeks to 24 weeks (although businesses with PPP loans can opt to retain the eight-week covered period);

Reducing the proportion of PPP funds that must be spent on payroll in order for the loan to qualify for forgiveness from 75 percent to 60 percent; and

Amending some CARES Act PPP provisions to extend:

The period for which funds may be repaid to five years; The loan deferral period authorized in the CARES Act to ten months from the end of the loan’s covered period; and The deadline for rehiring individuals to June 30, 2020.

These changes to the PPP follow two Interim Final Rules (IFRs) issued by the SBA that went into effect May 28, 2020, which you can read here: https://bit.ly/2Z4O45L

The PPP was created to help small businesses recover from Covid-related economic loss, and provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program.

As stipulated by the SBA, small businesses can apply for PPP through “any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.”

In response to the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020, the U.S. Small Business Administration (SBA) posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application. In addition to revising the full forgiveness application, SBA also published a new “EZ version” of the forgiveness application. “These changes will result in a more efficient process and make it easier for businesses to realize full forgiveness of their PPP loan,” states the SBA’s official press release.

EZ Forgiveness Application

The EZ version of the application applies to borrowers who: • “Are self-employed and have no employees; OR • Did not reduce the salaries or wages of their employees by more than 25%, and did not reduce the number or hours of

their employees; OR

Experienced reductions in business activity as a result of health directives related to COVID-19, and did not reduce the salaries or wages of their employees by more than 25%.” In contrast to the regular application, the EZ application requires fewer calculations and less documentation for eligible borrowers. Interested applicants can find more detailed information about the applicability of these provisions in the EZ application form. Both applications give borrowers the option of either using the original 8-week covered period, or the extended 24-week covered period, as offered by the PPP Flexibility Act (explained in full below).

View the EZ Forgiveness Application: https://bit.ly/2VTcMUJ View the Full Forgiveness Application: https://bit.ly/3gAHl9R

SBA & Treasury Will Increase Transparency of Paycheck Protection Program Loans

On June 19th, 2020, the U.S. Small Business Administration (SBA) and the U.S. Department of the Treasury made a joint announcement that they will make additional data public regarding the Paycheck Protection Program (PPP), in agreement with leaders of the U.S. Senate Small Business Committee. In doing so, they will make a concerted effort to facilitate the interests of both transparency of data and protection for small businesses who receive PPP loans.

The SBA will now disclose information about the recipients of PPP loans, including: businesses names; addresses; NAICS codes; zip codes; business type; demographic information; non-profit information; jobs supported; and loan amount ranges. Loan amount ranges that account for almost 75 percent of loan dollars approved include: • $150,000-350,000 • $350,000-1 million • $1-2 million • $2-5 million • $5-10 million

For loan amounts below $150,000, the following data will be released: totals aggregated by zip code, industry, business type, and various demographic categories.

“We value transparency and our fiduciary responsibility to ensure American taxpayer funds are used appropriately. This responsibility goes together with the steps we are now taking to provide needed public information in step with protecting entrepreneurs’ personally identifiable information associated with their business loan,”said Administrator Jovita Carranza. “Small businesses are the driving force of our economic stability and are leading the way to allow our nation to rebound safely.” For PPP data disclosed to date and funds remaining, click here: https://bit.ly/39kiwwv

Government Contracting

In March 2019, the Small Business Administration (SBA) announced that the federal government presently awards $22.9 billion in federal small business contracts to women-owned small businesses. It achieved its small business procurement goal for the sixth year in a row, awarding 25.05 percent ($120 billion) of federal contracts to small businesses.

Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) received 4.27 percent ($20.6 billion) of federal small business eligible contracts. Small Disadvantaged Businesses (SDB) were awarded 9.65 percent ($46.5 billion) of small business eligible contracts.

As with the SBA, there are government contracting opportunities for women entrepreneurs with diverse agencies: In FY 2018, the Federal Housing Finance Agency (FHFA) "obligated" about $44.9 million of its total contracting dollars to minority- and women-owned businesses, an approximate $1.2 million increase from FY 2017.

The Federal Deposit Insurance Corporation (FDIC) awarded $212.9 million in contracts in 2018, of which $38.4 million went to women-owned businesses (WOB) and $56.7 million to minority women-owned businesses (MWOB). In FY 2017, the Consumer Financial Protection Bureau’s (CFPB) total spend was $169,441,229, of which $51,995,823 (30.7 percent) was spent with minority-owned and women-owned businesses.

From public utility companies to Federal agencies, the entities searching for diverse firms are extensive, and business certification can help bring you to the forefront. Here’s the most important part: agencies and entities cannot utilize you based on your di

"Women-owned business can represent significant appeal to buyers wanting to work with women."

versity if they do not know you exist. The importance and value of certifying your business cannot be overstated.

A pivotal benefit of leveraging your business’s diversity classification is the network you will create. As you solidify yourself in a community of diverse entrepreneurs, you can benefit from referring and being referred for business opportunities and government contracting. With their potential to fuel business sustainability, the prospects that come from diversity classification cannot be ignored.

Knowing that you’re a women-owned business can represent significant appeal to buyers wanting to work with women. According to Bloomberg, women make 85 percent of all purchasing decisions—and 91 percent of new home purchasing decisions— in the U.S. If you leverage your women-owned business certification, you are giving yourself a leg up on the competition before even shaking hands with your client.

In addition to government contracting, diversity classification can open your business to newfound streams of funding, from banks to venture capital dollars. A diversity certification is a denotation awarded to businesses that are at least 51 percent owned by a disadvantaged member of the population. For instance, a women-owned business must be 51 percent owned, managed and operated by women.

The Federal Reserve Board's Main Street Lending Program

The Federal Reserve Board announced that it is expanding its Main Street Lending Program to allow more small and medium-sized businesses to receive support. The Board has "lowered the minimum loan amount, raised the maximum loan limit, adjusted the principal repayment schedule to begin after two years, and extended the term to five years, providing borrowers with greater flexibility in repaying the loans."

"Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery," Federal Reserve Chair Jerome H. Powell said. "I am confident the changes we are making will improve the ability of the

Main Street Lending Program to support employment during this difficult period." Small and medium-sized businesses are a vital part of the economy and employ tens of millions of people, and, because their needs vary widely, the Board has extensively sought feedback and revised the Main Street program accordingly. The changes include: • Lowering the minimum loan size for certain loans to $250,000 from $500,000;

Increasing the maximum loan size for all facilities;

Increasing the term of each loan option to five years, from four years;

Extending the repayment period for all loans by delaying principal payments for two years, rather than one; and

Raising the Reserve Bank's participation to 95% for all loans.

Once they have successfully registered for the program, lenders are encouraged to begin making Main Street loans immediately.

"Women make 85% of all purchasing decisions—and 91% of new home purchasing decisions—in the U.S."

The Main Street Lending Program intends to purchase 95% of each eligible loan that is submitted to the program, provided that the required documentation is complete and the transactions are consistent with the relevant Main Street facility's requirements. The Main Street Lending Program will also accept loans that were originated under the previously announced terms, if funded before June 10, 2020.

Nonprofit organizations play a critical role throughout the economy, and the Board is working to establish a program soon for these organizations.

The Main Street Lending Program was established with the approval of the Treasury Secretary and with $75 billion in equity provided by the Treasury Department from the CARES Act. Additional frequently asked questions and answers for lenders and borrowers are also available. The form participation agreement and other legal forms will be updated to align with the announced changes.

Diversity in Leadership & Board Positions: Women Face the “Broken Rung”

In 2019, women represented 48% of the corporate pipeline, of which 30% were white women and 18% were women of color, according to the 2019 Women in the Workplace report by McKinsey & Company. In contrast, men comprised 51 percent of entry level positions. In the following, you will see the representation from the managerial level to the C-suite.

Over the last five years, the representation of women in the C-suite has increased from 17% to 21%. There are three primary reasons for this increase, including:

1. More women being hired at the director level and above in the past few years;

2.

Senior-level women are being promoted at a higher rate than their male counterparts; and

3. Men at the Senior Vice President and C-suite levels are slightly more likely to leave their companies, which are creating more open positions for women to fill.