Small Business Relief Must Be a Priority During the COVID-19 Pandemic

By Alexis Glick

As the COVID-19 health emergency has been unfolding, I’ve been doing some writing and media appearances talking about a group of people I care passionately about—namely, the millions of underserved children in the United States who depend on the U.S.D.A.’s school lunch and school breakfast programs for the lion’s share of their daily nutrition, and who risk hunger and food insecurity when public schools are forced to close for health reasons.

Thankfully, the U.S.D.A., the Centers for Disease Control and Prevention, the School Nutrition Association, the Food Research and Action Center, and numerous NGOs and national and local nonprofits like my own are focused on that issue, and are helping to figure out creative solutions during the shutdown. That’s good news. (My own organization’s COVID-19 Emergency School Nutrition Fund launched on March 30th can be accessed here.)

That has allowed me to momentarily turn my attention to another group for whom the effects of coronavirus hold the potential of being devastating: the men and women of America’s small business community and their families.

Small businesses are the lifeblood of our economy

According to 2019 figures from the Small Business Administration, small businesses employ nearly 60 million Americans, or 47.3% of the private workforce. Many of those people are part-time employees, and many of them do not have paid sick leave.

Small businesses are the lifeblood of the U.S. economy: they create two-thirds of net new jobs and drive U.S. innovation and competitiveness. SBA figures document that small businesses account for an astonishing 44% of all U.S. economic activity.

Without belittling the hits that large corporations take when the economy comes to a standstill for weeks or months, in truth, it’s small businesses—restaurants, retail, hospitality, travel, skilled laborers, service providers of all kinds—who tend to be hit hardest in times like these. They simply don’t have the reservoirs of cash on their balance sheets that the big corporations and publicly traded companies have.

A hiatus that lasts weeks or months can put the best-managed Main Street small enterprise out of business, and it’s precisely small business owners and their employees who are least likely to have a personal financial cushion to soften the fall.

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Small business owners, founders, and hardworking employees often don’t get the credit they deserve. In many ways, large and small, they have built our country into what it is today. American small business owners represent a powerful legacy: many today are the children and grandchildren of immigrants and “greatest generation” visionaries who took risks that only entrepreneurs understand, dedicated themselves to what we used to call the American dream, made successes of their enterprises, enriched and stabilized their communities, raised their families, and supported city, state, and national growth by billions paid in taxes.

We often hear folks advising others to patronize small businesses in their neighborhoods. This is well intentioned, but it’s a hollow gesture in a time when guidelines and laws are advising merchants to limit hours, cut back on customers, and in some cases close down. You can’t patronize a hotel, a bar, a shop, or a gym whose doors are shuttered. And unlike collateral-rich corporations, small businesses can’t borrow their way out of red ink.

Financial relief for small businesses should be a priority

The primary help for small business going forward in this crisis must be financial relief. That includes unemployment insurance, of course, but I’m talking about grants, debt forgiveness, disaster loans, micro-financing, special economic-injury instruments that offer access to capital, and, yes, if the coronavirus is as long-lasting a crisis as some are warning, appropriate “bailouts” based on intelligent assessments of real losses.

The SBA offers many of these things in one form or another, along with guidance and advice to business owners on accessing assistance. And the $2 trillion “stimulus” bill includes $350 billion in loans to small businesses under the Paycheck Protection Program (a great first step), which will help small businesses with fewer than 500 employees cover payroll and other expenses through June 30, as of now.  It’s part of the CARES Act Economic Relief Plan just approved by Congress. (For more information, see Newly Available CARES Act Loans: 10 Things Small Businesses Need to Know.)

While this is great news, the possibly months-long duration of the COVID-19 shutdown of our nation’s towns and cities, this possibly may be just the beginning of the funding that’s going to be needed to save this most vital sector of our economy.

My hope is that funding will continue to be allocated at the community, regional, state, and national levels before we get deeper into the evolution of this difficult time, and that we can all step up and help small business in the spirit of mutual support of our friends in need. And let’s remember that relief is the point—not political posturing.

Unprecedented times call for unprecedented measures

Lastly, let me stress that, in addition to seeking aid from the federal government through all available channels, small businesses should keep in mind that this potentially months-long crisis is causing business both large and small to rethink how they work. Adaptation, flexibility, and the embrace of new ways of doing business will be the lasting legacy of COVID-19, and those adaptations will take many forms, from distance-working and online meetings to new delivery models for products and services. But if any group is prepared to adapt with changing times, it’s the men and women who run America’s small businesses.

I’ve heard more than one observer remark lately that the feeling around the coronavirus crisis’s impact on business reminds them of 9/11. I understand the comparison, although the reality is that CDC estimates of possible deaths from the disease in fact far exceed the 3,000 souls lost on 9/11.

On that fateful day, almost 18,000 small businesses were shut down or destroyed. The U.S. government, through the SBA and private-sector groups, made loans and cash grants to qualifying businesses in Manhattan, in Virginia near the site of the Pentagon attack, and to businesses around the country that were financially hurt because of the attacks. Community Development Block Grants and Economic Injury Disaster Loans were also made available.

RELATED: Small Business Relief: COVID-19 Resources for Startups