Small business needs during and after the coronavirus crisis: A roadmap to recovery
From stock market dips to shuttered storefronts, it’s no secret that the COVID-19 public health crisis has put too many businesses on the brink of collapse. Our network of 65,000 small businesses have painted a dire reality of what they are facing throughout the crisis, which has elevated the need for government officials to better understand the challenges faced by our nation’s entrepreneurs. As some states start to reopen sectors of their economy this month, it’s critical that policymakers at all levels work to enact policies to aid Main Street’s recovery, as well as ensure the long-term success of small businesses by creating an infrastructure to help them reach their full potential.
More American jobs are created by entrepreneurs than any other way—small businesses employ half the private-sector workforce and create two-thirds of all new jobs. That’s nearly 60 million individuals who depend on small businesses for their livelihood and the livelihood of their families, which is particularly important in underserved communities. Despite their importance, government policies too frequently ignore—and sometimes hinder—small businesses. Indeed, Small Business Majority’s state polling found a mere 12% of small business owners feel their government officials understand their needs.
While government officials have historically favored legislation that benefits big business over small and new businesses, the pandemic’s impact on the small business community has been front and center during the crisis. Unfortunately, that hasn’t translated into action that responds directly to small businesses’ needs and challenges. This must change now to ensure we can pull our economy out of this crisis.
This is why we’re calling on Congress and state legislatures to put small business needs at the front and center of all economic policymaking now and in the future to ensure a robust small business infrastructure that can better withstand the next crisis.
Policy recommendations to ensure Main Street recovers:
- Provide grant assistance to ensure small businesses stay afloat: Small businesses that are unable to maintain payroll or have operational costs that exceed the cost of payroll desperately need direct grant assistance. We recommend allocating $600 billion in funding for direct grants to ensure that a pool of money is available for small businesses while avoiding the many problems with PPP. These grants would be administered through the IRS using a simple application.
- Provide robust funding for business support services: Small business owners are desperate for education and guidance right now, and we urge more short and long-term funding for business assistance centers that provide resources to business owners. This is particularly needed as many small business owners are taking on more debt or seeking financing for the first time. Many businesses are also being forced to rethink their entire business model or adapt to our changing environment and need counseling and assistance.
- Expand access to responsible credit: We urge state and federal officials to identify creative ways to enable responsible access to credit to ensure small businesses are better positioned to access financing when they need it most. While small businesses may be wary to take on new debt in this economic climate, we must ensure they are able to access the right kind of capital in an efficient manner, and that women and people of color have equal access to financing.
- Strengthen and expand the Affordable Care Act: Small businesses and their employees need access to affordable, quality care, now more than ever. Unfortunately, the Administration’s efforts to rollback key ACA provisions has weakened access to affordable care. Much more needs to be done to expand coverage, strengthen the marketplace and rein in costs so that if COVID-19 continues to threaten the health of our communities, small businesses and workers won’t face increasing premiums and lackluster coverage.
- Strengthen paid family and medical leave, and additional benefits: Nearly half of all U.S. workers are employed under small businesses, which means small businesses are particularly impacted by stay at home orders and loss of employees due to illness. The following actions can help small businesses retain their employees while decreasing the spread of COVID-19.
- Promote fair and open markets: COVID-19 has led to so much uncertainty about access to products that it has encouraged harmful business practices across the country. Federal and state officials should leverage their power to ensure our markets are fair and open and ensure small businesses are able to operate on a level playing field. Small businesses cannot thrive when neighboring entities are competing unfairly.