Small Businesses Need More to Survive COVID-19

On the stimulus bill S. 3548 The Coronavirus Aid, Relief, and Economic Security Act, that passed the Senate last night, Executive Director of the Main Street Alliance, Amanda Ballantyne had this to say:

"The best way to support the economy during this crisis is to keep workers getting paychecks, and keep small businesses solvent.

We hear every day from small business owners who have been forced to lay off employees, and have been waiting to hear what support was coming -- and if they will get a lifeline or will need to permanently close their doors. And for them, this package has needed elements -- but in the wrong order.

Small businesses across the county have been loud and clear about what they need, calling for job retention grants to keep employees on payroll and accessing their health care- whether they are working or not. Second, we need a significantly expanded safety net for those already laid off, and third low or no interest forgivable small business loans could be used to fill in the gaps. This package delivers on all three elements, but in the reverse order: a big loans program, a significant and critical expansion of UI, and a small grant program capped at $10,000 per company, none large enough to truly tackle the problem.

The largest piece of funding in the bill is reserved for large corporations. The Senate could have centered small business needs, instead we got a $450 billion fund that small businesses cannot access.

Small businesses simply will not take out loans to cover payroll with no revenue coming in, putting these loans at risk of not being eligible for forgiveness. And structural inequities in our lending institutions mean women and small business owners or color are less likely to get loans, and if they do access them, they are small and on worse terms. The way this program is designed, many small businesses will likely close rather than take on the risk of debt.

This package is a start on which we can improve. It must advance in the House and be signed by the President. The health care system and unemployment expansions are necessary. They need to be put in place quickly and with true equity of access. And we must ensure, in partnership with the SBA, this is implemented quickly and in a streamlined way that reduces any burden on already struggling small businesses.

On Unemployment:

• The expanded unemployment benefits will allow small businesses to furlough their workers to reduce costs.The expansion to include self-employed and gig workers is a major victory. But this must be implemented immediately. We must make sure these systems interplay with state systems so that furloughed workers are not left waiting in line in overburdened programs with already skyrocketing UI claims.

On Paid Leave Provisions:

• Ensuring that businesses can be advanced credit to provide paid sick time and leave under the Families First bill, is an important improvement for small businesses, but this crisis shows we need a national and permanent paid leave program.

We applaud Senate leadership for reaching bi-partisan agreement on this historic package. To keep Main Street from being shuttered, we urgently need to begin work on a fourth support package. We need to do more to support small businesses in responsible ways. We must expand the grant program to a scale that is needed for many more small businesses.

We are at the edge of an extinction event for our economy, Main Street businesses led us out of the last recession and they need the right support to play that role again.