For April Teixeira, founder of the Corny Bread Co., March was the cruelest month.
For the first couple of weeks, sales at her small startup were surging. “The beginning of March was my best month ever," said Teixeira, 55, whose company makes a gourmet corn bread sold at farmers markets and WeWork office centers. "This was going to be my year.”
Then came the COVID-19 shutdown, which pushed her business to the brink. But now Teixeira has been handed a lifeline: a $10,000 grant from a foundation set up by the telecom giant Verizon. The cash will let her catch up on bills while providing some capital to expand the business once the crisis has passed.
“There’s a relief now," Teixeira said, “because going forward . . . I now know that I have the resources.”
Verizon is one of several major US technology companies that are splashing out millions of dollars to prop up small businesses. The Verizon Foundation has donated $7.5 million, while social-networking company Facebook has pledged $100 million in cash and advertising services. The search-and-advertising titan Google is providing $340 million in advertising credits to customers of its Google Ads services.
The fund-raising service GoFundMe, in cooperation with Yelp, Intuit QuickBooks, GoDaddy, and Bill.com, is providing $500 matching grants to small businesses that raise $500 through GoFundMe.
And the business management software company Salesforce spent $5 million to give $10,000 grants to 500 small businesses, while the online printing company Vistaprint joined with the US Chamber of Commerce to give out $5,000 grants.
Scott Stern, a professor of management at the Massachusetts Institute of Technology’s Sloan School of Management, said it’s just good business. “Many tech companies are sitting on very significant cash reserves, and their . . . small-business customers are facing an existential threat," Stern said. Small businesses provide a significant amount of revenue to these giant companies, so spending a relatively minor sum now "allows them to make sure that they retain those customers over the long term.”
The grants also burnish the tech giants’ reputations, Stern said. “Having some good-will gestures, even that are of modest size, is likely to pay off in their ongoing relationships with regulators, the government, the public.”
Prior to the pandemic, the nation’s tech giants were coming under sustained fire from politicians of both parties, for an array of alleged failings, including monopolization of markets, censorship, and privacy violations. The small-business grants, along with other free and discounted services provided by these companies during the crisis, could show them in a more positive light.
In addition, the grants aren’t as costly as they might seem. Much of Facebook’s donation and all of Google’s will provide recipients with free advertising, rather than cash. This can be crucial for a small business desperate for customers once the lockdown lifts, but it costs the donors virtually nothing.
While the Facebook, Salesforce, and Vistaprint programs are no longer accepting grant applications, the Verizon, Google, and GoFundMe campaigns are still up and running.