Friday is a tough day for many of our friends, family, and neighbors in Richmond. Friday is payday for many of us, and this could be our last paycheck or the first missed paycheck. Many small business owners and their employees are facing an uncertain future, given the impact of our efforts across the City of Richmond and the Commonwealth of Virginia to combat the spread of COVID-19. The Governor’s directive on Monday afternoon to instill ‘shelter in place’ measures until June 10th sets in motion a drastic transition to our daily lives for the next ten weeks.
I am struggling, along with many of you, in navigating this new reality we find ourselves living in. Social distancing has completely shifted our daily lives. For the next many weeks, there won’t be coffee shop meetings, lunch meetings, grabbing dinner with friends, or other work events. Enjoying our many small businesses and social gathering locations have stopped. Many companies have shifted their operations and have halted, stopped, or canceled work projects. Small businesses have had to stop hiring, layoff, furlough, or fire employees in response to this crisis. This leaves many of us reeling and looking for answers, which, unfortunately for many, will be filing for unemployment, applying for Medicaid, and trying to find ways to pay the bills.
Together, we will survive. We will persevere. We will become stronger.
Over the last couple of weeks, I have been on countless phone calls and online meetings discussing our options to help small businesses and their employees survive these next couple of months. These calls have included everyone from the Federal Reserve, ChamberRVA, Virginia Community Capital, Capital One, regional bank leaders, economic development professionals, and small business owners. We have explored the details of the CARES Act, the upcoming Small Business Association lending and grant programs, and other efforts to provide needed access to capital during this emergency. The challenge is that there are more questions than answers. The main focus of the funding needs today is for our small businesses, the lifeblood of our city and the largest employer in the region, to be able to make payroll, to pay their bills, and to remain solvent until June 10th.
We are focusing on what is needed today, to thrive tomorrow.
The City of Richmond has taken many necessary steps to navigate this emergency. Small business tax payments are deferred until June 30th. We have streamlined online permitting and inspection processes despite the closure of City Hall. Hiring has been frozen as we look to utilize our existing staff and resources to meet our expectations for core services. The trash will be collected. Police will keep our streets safe and respond to 911 calls. The City of Richmond will come out of this response to COVID-19 leaner, more efficient, and more strategic. As Plato once said, “Necessity is the mother of invention,” and we are in a time of necessity. As we tighten our belts, facing shrinking revenues, my focus will be to make City Hall more efficient, effective, and accessible out of this crisis.
Last year, I partnered with the Mayor to create and lead the Economic Vitality Advisory Committee, which meets quarterly to review the City of Richmond’s finance reports and revenues. In total, there are more than fifteen regional leaders from the economic development community that meet to participate in this valuable conversation. While previous meetings have discussed the performance of our city revenues, made recommendations to improve our competitiveness, and other topics (here is our last agenda), I have spearheaded the transition to coordinate an Economic Resilience strategy to respond to the COVID-19 crisis.
During our call last Friday, we highlighted the need to translate the Federal Government’s CARES Act stimulus package into understandable terms for our small businesses. Our focus is on helping our small businesses survive this crisis and prepare for recovery, and the CARES Act is an essential step in this plan. Now that Governor Northam has announced the ‘shelter in place’ order until June 10th, small businesses are currently facing three months of payroll, rent, utility bills, and other payments needed to persevere through this new reality. From our comprehensive discussion, we highlighted several priorities:
- Small Business Survey — engaging our small business owners around their current situation, priorities, and operations needed to survive the next three months is paramount to preparing our response as a region. A survey was created by the ChamberRVA, Economic Development Department, and other partners and will be distributed over the next week.
- Rent — many small businesses are tenants in commercial properties across our city, that are now facing decisions on how to make required payments. Maintaining our small businesses in their locations is key to our recovery. We have engaged GRACRE, Richmond’s Commercial Real Estate Association, to discuss possible solutions to explore providing options for rent payments for our struggling small businesses. This is a complicated situation to navigate, one that involves lease contracts, lending institutions, mortgage payments, and other complex details. We will bring together all players involved to find solutions, options, and next steps to keep our businesses in place.
- Richmond Region Banks — our banks are crucial to navigating this crisis. The lenders of the commercial properties control the ability for deferring, delaying, or pausing payments on property rents owed by small businesses. Banks will be the source for the CARES Act loans through the SBA, Small Business Administration. As our regional banking institutions navigate the details of these new stimulus programs, the funds will not be available until later in April. There is a call scheduled today and another next week with our bank leaders to discuss these items. If you are an individual or small business owner facing financial hardship due to the response to COVID-19, contact your bank immediately to see what options are available for any payments, debts, or bills owed. There is help available to make it through these next couple of months.
- Access to money is needed now — while there is stimulus money coming, it will most likely not be available to businesses until later in April. By this time, many of April’s monthly bills, payroll, and other expenses will have been due. That is why the Economic Development Authority has formally approved a $1 million fund to support small businesses impacted by COVID-19. There is access to up to $10,000 from SBA.gov in up to three days if you apply. There are more conversations underway for other gap funding needed to support our small businesses and their employees during this crisis, stay tuned.
- Focus On Recovery — most of the emphasis has been on providing access to funds for small businesses to maintain operations, pay employees, and keep their business going. Now we need to prepare for recovery. Recovery includes re-hiring employees, increasing inventory, sparking supply chains, and getting back to work. This is different, and new money is needed. With the June 10th date established, we have a timeline to coordinate this effort. There is an upcoming Main Street Business Lending program that will be focused on this particular goal. I, along with many of our regional partners, will be working with our banks, small businesses, and the Federal Reserve Bank of Richmond to capitalize on this new funding. More is needed and more is coming. Together, we will recover.
This is the time for Richmond to work together, not just to survive, but to thrive through this crisis. Together, we will bounce back stronger. We must focus on recovery, preparing for life after we ‘shelter in place’ to prevent the spread of COVID-19. We are in an unimaginable situation, but one that we can adapt, adjust, and respond to diligently. Our small businesses need to survive. Our friends and our neighbors are the faces of, and the engines behind these small businesses. They are the culture, the fabric, and the foundation of our city. There are many efforts underway to collaborate strategically on how to best prepare for tomorrow. Many new partnerships are developing focused on our recovery as a region, showcasing our resilience in the face of uncertainty.