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In the three decades I’ve been advocating for small businesses, there’s never been a more challenging time for them and for the self-employed. And we’re far from out of the woods as this pandemic is not yet under control, and the economy is likely to take a long time to recover.
We’ve seen how President Donald Trump and his administration have responded to this crisis, but what would an administration headed by Joe Biden and Kamala Harris look like for small business and the self-employed?
“Day one, the focus is getting the coronavirus under control,” said Rhett Buttle, Biden for President National Business Advisor. “One in six small businesses are probably not coming back, and COVID is top of mind for most small businesses. The effort to contain the virus and ensure recovery is part of Biden’s small business plan, and small business stakeholders and the focus on small business will be a critical part of that.”
Looking at Biden’s top 6 proposals:
► Grants, not loans, for true small businesses that have lost substantial revenue. “We’ve been doing small business roundtables around the country,” said Buttle, “and we’ve heard directly from small business owners that not only was PPP (the Paycheck Protection Program) mismanaged but they weren’t sure how forgiveness worked.”
My take: Biden has this right. Grants, instead of loans, were the better choice originally for small businesses who were being told they’d need to take on debt when they had no idea when they’d even be able to open – and low confidence in a program with a bungled rollout. Grants are still the right approach for the most-impacted, smallest companies and will help save America’s Main Streets.
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► Guarantee that every business with fewer than 50 employees can get relief. The Biden campaign indicates they would “provide assistance to help small businesses get that relief quickly, especially minority-owned businesses.” And ensure that minority-owned businesses get technical assistance – such as accounting support and legal advice – so that they are not shut out of federal aid programs.
My take: There were funds in the CARES act to help Small Business Development Centers and others assist small businesses in applying for aid. But since the PPP was so confusing, much of that assistance did not come quickly enough and enough assistance wasn’t given to groups serving minority business owners. More help is needed not just in getting financial relief but in technical assistance on how to run a business now and pivot in this new economy.
► Redirect unused funds that were originally targeted for large corporation bailouts and any unused PPP funds and redirect those funds to help small businesses.
My take: The Federal Reserve launched a $600 billion program to help mid-size companies recover through lower-interest loans. As of the end of August, only a tiny fraction (0.07%) of those funds were used. While these funds are allocated differently than the PPP and other funds, perhaps some of these massive funds could be utilized to help Main Street instead of Wall Street.
Democratic presidential nominee Joe Biden and vice presidential nominee Kamala Harris. (Photo: AP)
► Unleashing $50 billion in public/private venture capital to entrepreneurs in disadvantaged areas by funding state, local, tribal and non-profit financing initiatives.
My take: Venture capital is great, but it typically doesn’t reach small businesses who areon the ground, needing help now. Such help should reach further than just disadvantaged areas, as well. Women entrepreneurs throughout the country – even in Silicon Valley – have had a hard time securing venture capital.
► Establish a $400 billion federal procurement program to “buy American” designed to give greater federal contracting opportunities for certified small businesses, especially disadvantaged businesses.
My take: The entire federal “small business” procurement program needs examination and updating. Size standards for businesses are what most of us would consider medium to large businesses and the application process too cumbersome for most small companies. A more innovative approach would be useful in a Biden Administration, especially for disadvantaged businesses.
► Set up a national network of business incubators to help nurture startups. “The number of startup businesses is down,” said Buttle, “and they are the generator of new jobs.” And related: Establish business development programs at every public community college as well as two-year HBCUs (Historically Black Colleges and Universities), TCUs (Tribal Colleges & Universities), and MSIs (Minority Serving Institutions).
My take: These are both good ideas, though many such incubators and business development programs already exist. The number of startups is down, but there are lots of reasons, including outdated anti-trust laws and “non-compete” laws, which inhibit individuals from being able to start new companies. In previous statements, Biden has indicated he is interested in addressing both those issues.
In addition to specific policies the Biden-Harris campaign has laid out, Buttle emphasizes two of the most important characteristics a Biden-Harris administration will bring back to America: leadership and stability.
“We’re taking the virus seriously; there hasn’t been leadership at the top (in devising a national program to combat the virus)…Businesses depend on predictability and the government having some level of stability,” Buttle said.
That emphasis on combatting the virus and providing stable national leadership will be reassuring news to small businesses. Remember, when a vaccine is developed, it will take effective national leadership over many months to oversee the roll-out of that vaccine and to encourage Americans to believe in the science behind it.
Rhonda Abrams is the author of “Successful Business Plan: Secrets & Strategies,” the best-selling business plan guide in the U.S., recently named one of the 100 best business strategy books of all time. Follow Rhonda on Twitter and Instagram: @RhondaAbrams.
The views and opinions expressed in this column are the author’s and do not necessarily reflect those of USA TODAY.
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