Small Businesses Navigate Challenging Road to Recovery
Capital One is committed to supporting small businesses impacted by COVID-19
Small businesses are critical drivers of job growth and innovation for local economies, employing nearly half of the United States’ private workforce. Across the country, this community of more than 31 million small businesses1 has been disproportionately impacted by COVID-19. Between February and May of 2020, companies with less than 500 employees laid off or eliminated an estimated 11.6 million jobs2. And even as states reopen, the future for many small businesses is uncertain.
At Capital One, we know that small businesses are the cornerstone of communities across the country. Through our partnerships with like-minded organizations and continued efforts to help business customers during this time, we are committed to supporting and providing small businesses with what they need to navigate the road ahead.
A Problem Shared is a Problem Halved
At the onset of the COVID-19 pandemic, Capital One worked with a network of trusted nonprofit partners to help small businesses navigate the challenges of this new reality. Many of these organizations are working directly with small businesses across the country, providing information and financial support to get business owners on the path to recovery.
In March, Capital One committed $50 million to address the needs of communities impacted by the pandemic. Part of that effort provided the Opportunity Finance Network (OFN), a national Community Development Financial Institutions (CDFI) membership network, a $1 million grant to provide funding to small businesses through 19 recently selected CDFIs including the Black Business Investment Fund, La Fuerza Unida Community Development Corporation and the Northwest Native Development Fund.
Additional grants to Accion East, Accion Chicago and Accion San Diego, lending organizations serving small businesses across the U.S., helped provide business owners with relief funds in select communities, including cities such as Boston, Chicago, Miami, New York and San Diego. Alongside many of our fellow financial institutions, Capital One contributed to the Inclusiv Resilience Fund to support credit unions serving communities of color that have been disproportionately affected by the coronavirus pandemic.
These contributions gave organizations more resources to help small businesses and nonprofits - like Propeller, working in Louisiana to provide support in filling out paperwork and qualifying for eligible disaster loans and grants. The BridgePath, a credit counseling service in New Orleans, was able to provide virtual sessions to small business owners and walk them through developing a crisis budget and action plan. And Ledbury, a mens clothing company based in Richmond, Va., which pivoted to producing masks, received an order of 30,000 face masks from Capital One’s Workplace Solutions, our in-house team dedicated to providing the best and safest work environment for associates.
Closer to home, some of our Capital One associates were given an opportunity to support their hometown communities, receiving $50 from Capital One to virtually donate to one of 10 local organizations that focus on community well-being or supporting small businesses across Richmond, Northern Virginia, New York, Las Vegas, and Tampa.
“Capital One is deepening relationships with our existing partners, and pursuing new ways to support the small business community during what has proven to be an exceptionally challenging time to run a business,” said Andy Navarrete, Head of External Affairs, Capital One. “As small businesses start to reopen and rebuild their operations, the impact of this work is coming to fruition in communities across the country. We are committed to helping small businesses on their road to recovery and will continue to look for ways to make a difference.”
More Than Just a Helping Hand
An unprecedented time calls for an unprecedented response, and we've also been working to adapt our products and services to meet the changing needs of our small business customers, helping them to endure this uncertain economic environment. We are connecting with our small business card and banking customers to discuss their unique situations and determine the solutions that best suit their needs.
From expanding rewards redemption options for Spark Miles customers to include eligible phone services, restaurant delivery and takeout from thousands of merchants, to expanding offers on Spring, Capital One’s marketplace for discounted products and services for all small business owners, we are challenging ourselves to think outside the box and provide offerings to help business owners and give them time to focus on taking care of themselves, their families and their employees.
Another way Capital One has been supporting business owners was with the Small Business Administration’s Paycheck Protection Program (PPP). In order to quickly rally behind our business customers, we mobilized across the company to support demand for a lifeline that could keep small businesses’ doors open and their employees paid during the onset of COVID-19.
“Capital One is committed to supporting small businesses through this extraordinarily difficult time,” said Jenn Flynn, Head of Small Business Bank, Capital One. “We admire the resilience small business owners have shown and we stand by, ready to serve. Whether it’s through the SBA Paycheck Protection Program; our variety of competitive products and services; or advice from our expert business bankers, we are here to help small businesses navigate the uncertainty.”
Capital One was able to help over 14,000 business customers receive PPP funds, with 82% of our loans helping businesses with ten or less employees, and 34% of the loans going to businesses located in communities of color. Here’s a graphic to showcase some ways we were able to impact businesses with PPP loans:
Partnering to Make a Difference
Among one of the customers who received a PPP loan was Hot Bread Kitchen, a nonprofit social enterprise that creates economic opportunity through careers in the food industry.
Supporting women, immigrants and people of color, Hot Bread Kitchen helps workers and emerging entrepreneurs within the food system sharpen their skills, secure meaningful careers and grow their businesses in New York City through their workforce and small business programs. Over the past decade, Hot Bread Kitchen used their connections and influence to shape a larger dialogue about a more diverse, equitable, and inclusive food industry, and their approach turns careers in food into financial stability.
In early March, the team quickly realized that the effect of COVID-19 would have a tremendous impact on the organization’s road ahead. Nearly 200 alumni working in the food industry had been laid off or were furloughed since February. Anticipating the gap in income, Hot Bread Kitchen quickly pivoted and began a cash assistance program in the form of emergency stipends to cover lost wages until unemployment benefits kicked in. With alumni experiencing extensive delays in access to unemployment benefits and an uncertain industry future, these stipends proved critical in helping them cover household expenses.
Working with Capital One, Hot Bread Kitchen was able to secure a loan through the PPP. These funds allowed the nonprofit to maintain headcount and payroll levels, without having to reduce the payroll costs of the organization through layoffs or furloughs. Because of this, Hot Bread Kitchen has been able to support more than 275 food workers and small business owners by setting up a hotline to help food workers navigate questions around unemployment, benefits, and childcare, as well as keeping their culinary incubator open so entrepreneurs can fulfill existing orders. To date, Hot Bread Kitchen has provided more than $250,000 in cash assistance to small business owners and food workers through their relief campaign, and leveraged their network of alumni to organize donations of meals for frontline healthcare workers.
What’s more, they can carry out their mission to make sure these talented individuals are able to continue pursuing their dream careers in food.
As small business owners continue to face unprecedented challenges brought on by the coronavirus pandemic, people across the country are recognizing how deeply woven small businesses are into the fabric of their communities. And while there is still much work ahead, Capital One is committed to helping the small business community come out of this stronger and more resilient than ever.
1 “Advocacy Releases 2020 Small Business Profiles For The States And Territories.” U.S. Small Business Administration Office of Advocacy, 5 June 2020, advocacy.sba.gov/2020/06/05/advocacy-releases-2020-small-business-profiles-for-the-states-and-territories/.
2 “May 2020 ADP Employment Reports.” ADP Research Institute, May 2020, https://adpemploymentreport.com/.
