Stimulus Package Will Provide a Lifeline for California Small Businesses, But the Need for Long-Term Solutions Remains

“We’re relieved Congress is expected to pass a stimulus deal today that will help provide some relief to small businesses here in California and around the country, but this may be too little too late for the thousands of vulnerable businesses that have been on the brink of collapse during months of congressional inaction. An estimated 400,000 small businesses nationwide have already closed their doors for good. Our recent poll of California small business owners revealed that 28% of entrepreneurs of color may be forced to close their business in the next three months, and 17% say they are likely to close their business permanently.

To fill the financial gap, California has recently made robust investments to help small businesses weather the storm. However, more support is needed from the federal government to see us through this ongoing crisis. This temporary fix from Congress can help stem further losses for the hardest-hit businesses during this critical time, particularly for those owned by people of color. In particular, we’re glad to see important provisions in the agreement to re-launch and improve the Paycheck Protection Program (PPP), provide simplified loan forgiveness for loans under $150,000, and fund grants through the Economic Injury Disaster Loan (EIDL) program, among other measures. We also support the improved fee structure for community development financial institutions that participate in PPP, which will help ensure these loan funds make it into the hands of small businesses that need them most.

But policymakers must recognize that small businesses will need a more robust plan. This is why we will continue to call on Congress to pass comprehensive relief in 2021 that provides long-term recovery solutions, including more small business grants and access to critical financing and resources. 

While California stepped up to support our small businesses during these months of inaction, the gridlock we’ve seen in Congress absolutely cannot continue in 2021. Today’s vote is an important step forward, and what small businesses need next is for their elected officials on Capitol Hill to put their differences aside and get to work on the long-term relief they will require to survive beyond just the next few months.”