The COVID-19 pandemic had severe impacts in Latin America, with small businesses intensely affected. Beyond its economic consequences, the pandemic also exacerbated structural flaws in some of the region's weakly institutionalised democracies, diminishing State legitimacy and expanding that of organised criminal groups. In considering how State governance from above is challenged by non-state governance from below, this article examines a “pandemic micropolitics” as seen through the lens of support to the small business sector. We outline a framework to understand co-governance in hybrid political orders during crises; and examine this using case studies of urban informal markets and the transport sector in El Salvador. In showing that the pandemic contributed to a renegotiation of co-governance between the State, criminal organisations, and business associations, we contribute to understandings of the dynamics of distributive politics and the co-governance of crisis; and the potential implications for a post-COVID-19 political economy in Latin America.