Call it a business-to-business rescue plan.
As Congress debates a massive coronavirus stimulus package, several private-sector efforts are under way to help firms laid low by the crisis.
Online small business lender Kabbage has launched a
Companies can register for free, and revenue generated by gift-certificate sales will be deposited in participants' accounts as soon as the next business day, said Kabbage co-founder and CEO Rob Frohwein.
“We thought it was potentially a perfect bridge,” Frohwein said. “If there is a local small business that you love, they need your patronage now more than ever.”
Kabbage’s new campaign comes two days after a restaurant group unveiled a
"We're experiencing something we have never had to deal with before," Jennifer Petrocelli, executive director of The Preston House & Hotel in Riverhead, N.Y., a participating restaurant, said in a Monday press release.
"We want to remain optimistic, so this initiative shows solidarity within our restaurant community and hopefully reassures guests that if they aren't able to visit us at this point in time, we'll be here for them when things settle down," Petrocelli added.
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Honeycomb Credit, a crowdfunding platform in Pittsburgh, has started facilitating loans to small businesses that need working capital during the pandemic. The loans include a 45-day payment free period and will be interest-only for six months. Capital can typically be deployed in as little as 30 days.
Frohwein said he conceived the idea for Kabbage's gift card campaign over the weekend.
“It was important that we got this done quickly,” Frohwein said.
“If it took us six weeks or two months to develop, a lot of small businesses would suffer a lot of harm," he added. “I tasked the team and I said, '`Guys, we’d like to figure out how to launch this some time next week.' I’m just absolutely astonished by the reaction I got from the team, which was, '`Let’s jump on this and get this done.’"
While Kabbage offers a more traditional
“We’re in a great big valley right now, and our capital is not always the best use for that type of situation, although it certainly helps in lots of different ways,” Frohwein said.
The restaurant industry was already facing major changes due to the
“We’ve never been hit like this before,” Ricky Klein, co-owner of Groennfell Meadery in St. Albans, Vermont, said during Tuesday conference call organized by the Main Street Alliance. “My mead hall is shut down, and every restaurant that carries our product is shut down, too.”
