LONDON, United Kingdom — As the coronavirus pandemic upends the global economy, businesses of all shapes and sizes are facing existential threats. But small businesses are particularly vulnerable and many may need support from governments and other bodies to survive. Here is an overview of the sources of funding, including grants and loans, available to small businesses in the key fashion hubs of Italy, France, the United States and the United Kingdom. For further advice, as well as information on financial aid for other countries, entrepreneurship publication Sifted offers a comprehensive resource.
We are updating this list as new sources of funding become available. Please contact email@example.com with information on any additions to this list.
- President Trump’s $2.2 trillion stimulus package comprises about $350 billion in loans for small businesses. These loans will be available through US Small Business Association (SBA) lenders, as well as any any financial institution signed up to the programme. Treasury Secretary Steven Mnuchin expects the rollout to be as early as Friday April 3, according to The Wall Street Journal.
- The SBA is also offering low-interest economic injury disaster loans of up to $2 million (and advances of up to $10,000) for enterprises across all US states and territories, as well a debt relief programme and express bridge loans of up to $25,000 for short-term cash flow needs, available to businesses with an existing relationship with the SBA. For more information, see the SBA website or contact the SBA disaster assistance customer service centre at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail firstname.lastname@example.org.
- Anna Wintour and Tom Ford, current president of the Council of Fashion Designers of America, have repurposed the CFDA/Vogue Fashion Fund to launch fundraising initiative A Common Thread. The aim of the fund is to help small fashion businesses affected by the crisis instead of awarding the usual $400,000 prize money to a single recipient and $150,000 to two runners-up. Applications open April 8 but “the parameters for funding” have not yet been confirmed, according to the CFDA.
- For companies based in New York City, Mayor Bill de Blasio has announced two financial relief programmes for small businesses that have seen a revenue dip of at least 25 percent due to the coronavirus: an employee retention grant for businesses with fewer than five employees covering 40 percent of payroll costs up to $27,000; and an interest-free small business continuity loan of up to $75,000 for companies with under 100 employees.
- Kerby Jean-Raymond of New York label Pyer Moss has teamed up with Away Co-Founder Jen Rubio to provide $100,000 of funds for small creative businesses. As of March 25, Jean-Raymond announced via Instagram that $78,000 of funds had been awarded to 38 businesses, seven of which sit in the fashion industry. Businesses can make an application via yourfriendsin.nyc.
- The Pratt Center for Community Development has a live document of resources, funding and assistance for businesses in New York. These include 0 percent interest entrepreneur loans, emergency funding for freelance artists and loans for women- and PoC-owned businesses.
- For businesses on the West Coast, there are a number of emergency relief loans and guarantees available to companies in the state of California, which the LA County Economic Development Corporation outlines here. These include California IBank’s Small Business Finance Center and the California Capital Access Program for Small Business.
- LA Mayor Eric Garcetti has also introduced no-fee emergency microloans between $5,000 and $20,000, with interest rates ranging from 0 to 5 percent depending on repayment terms.
- UK Chancellor of the Exchequer Rishi Sunak announced an emergency package of £330 billion ($394 billion) in guaranteed business loans of up to £5 million, available through over 40 accredited lenders including high-street banks. The British Fashion Council has more information and guidance here.
- There is also a 12-month reprieve from business rates (taxes levied on commercial properties) on all small businesses and all businesses in retail and hospitality.
- The UK Government has a number of other initiatives available to small businesses, including grants of up to £25,000, statutory sick pay for workers, interest-free tax deferrals, and a Job Retention Scheme, which allows employers already using the government’s payroll scheme to claim funding for staff wages, backdated to March 1 and lasting at least three months. (Employees will be covered for 80 percent of their monthly salary up to £2,500.)
- Freelance and self-employed workers will also receive 80 percent of average monthly profits, up to £2,500. However, the scheme will not be rolled out until June 2020 and is only open to anyone who has an average yearly trading profit of less than £50,000.
- On March 27, the British Fashion Council launched the BFC Foundation Crisis Fund, a fundraising initiative starting with £1 million of repurposed grant money. To qualify, applicants must be a UK-based designer fashion business specialising primarily in womenswear, menswear, accessories, millinery or fine jewellery (i.e. not bridal or childrenswear). The business needs to be majority-owned by the designer or creative director and not have received external funding. Applications, which open within the next seven days and close April 10, need to “relate to a clear purpose to support the business [to] survive over the next year,” according to the BFC announcement.
- On March 16, President Emmanuel Macron announced a freeze on rent and utilities payments for small- and medium-sized businesses struggling to make ends meet.
- The government has also deferred tax payments for March and given businesses the option to request deferrals in subsequent months.
- To prevent mass layoffs, employers can temporarily put members of staff on hold and request partial reimbursement of salary costs from the state.
- State-backed investor Bpifrance is offering direct business loans, or it can act as a guarantor for bank loans. On March 25, the investment bank teamed up with the general secretariat for investment to provide €4 billion in liquidity for start-ups.
- There is an additional “solidarity fund” of €1,500, available through a government website from April 1, for entrepreneurs with sales revenue under €1 million annual profit of less than €60,000 that experienced a year-on-year sales drop of at least 70 percent in March 2020.
- For small enterprises facing particular difficulty, there will be €2,000 awarded by regional authorities on a case-by case basis, starting April 15. To apply, contact your regional authority.
- For more information, France’s Fédération de la Haute Couture et de la Mode provides regular updates on funding and support for businesses.
- Under government measures, companies with less than €2 million in annual revenue do not have to pay taxes, and larger businesses can request a tax suspension, according to Sifted. More information and updates on help for SMEs in Italy can be found at Italia Start-Up.
- State lender Cassa Depositi e Prestiti is offering help with liquidity for small and medium enterprises, which are also eligible for up to €5 million in state-guaranteed loans.
- The government also enacted a “Cura Italia” decree on March 18, which largely covers social security concerns by prohibiting job terminations until May 18, 2020 and offering employees 80 percent of their salary if their business activities are suspended.
- However, the Camera Nazionale della Moda Italiana has lobbied for additional aid that reflects the challenges facing the fashion industry during the pandemic and future-proofs the country’s valuable “Made in Italy” export. The association also said in an email to BoF that it was “working on a direct support initiative for young brands.”
We’re tracking the latest on the coronavirus outbreak and its impact on the global fashion business. Visit our live blog for everything you need to know.