Small companies welcome extra assist in Biden’s Covid Reduction Plan
A normally busy main street in Livingston, Montana after Governor Steve Bullock ordered restaurants, bars and theaters to close on March 20, 2020 in response to the coronavirus pandemic.
William Campbell | Corbis via Getty Images
As President-elect Joe Biden presents his comprehensive $ 1.9 trillion economic plan and response to the pandemic, small business advocates welcome additional help for a main drag that continues to be hammered by Covid.
Biden’s US bailout plan includes $ 15 billion in grants for the hardest hit businesses and $ 35 billion in funding programs for small businesses.
“An economy that is fully open and recovering relatively quickly will save countless businesses and jobs on Main Street and give new entrepreneurs the spark to start and stop new businesses,” said Karen Kerrigan, President and CEO of SBE Council , in a statement. She added that small business recovery is an integral part of the overall economic recovery.
“It is clear that certain industries and areas of the country are harder hit than others, and initiatives that focus on those sectors and communities will result in a more balanced recovery,” said Kerrigan.
The assistance provided by Biden would be on top of the current Paycheck Protection program, which reopened this week with new fraud protection and an emphasis on serving smaller businesses that may have missed help when the program was launched last year. Community lenders started offering first-time loans on Monday and PPP loans for the second drawing on Wednesday. The staggered opening continues on Friday for lenders with assets under $ 1 billion. It opens Tuesday for all other lenders.
At Sunrise Banks in St. Paul, Minnesota, demand for help from smaller businesses has been high since the program opened on Monday. CEO David Reiling praised the Small Business Administration’s decision to let community lenders take the lead in this round. The incoming requests for assistance are low, but show that micro and sole proprietorships are in need.
“The vast majority will be sole proprietorships, and these loans will cost maybe a few thousand dollars. In some cases, our lowest value today was $ 250,” said Reiling.
In addition to helping small businesses, Biden’s proposal includes $ 1,400 direct payments to individuals, a national vaccination strategy, and a minimum wage of $ 15 an hour.
Biden’s call to more than double the current federal minimum wage met with both criticism and praise. Pew Research found that 67% of Americans are in favor of increasing their wages to $ 15 an hour.
The International Franchise Association was delighted with the vaccination strategy and helping businesses, but said the wage increase could be counterproductive.
“Our goal is to ensure that small businesses can continue to care for their communities and their employees. However, asking for some workers to more than double wages will hurt businesses in trouble and likely slow recovery,” said Matt Haller , IFA senior vice president of government and public affairs, in a press release.
Small business confidence fell in December as Covid-19 cases spiked and Main Street awaited the changing of the guard in DC. The monthly index of the National Federation of Independent Business fell 5.5 points to 95.9. It’s below the NFIB’s historical average of 98 as fewer small businesses expect sales to rise or the economy to improve over the next six months. In addition, there is still uncertainty for small business owners in the New Year.
“Concerns about economic policy in the new government and the increasing spread of Covid-19, which is leading to new government-mandated business closings, leave owners pessimistic about future conditions in the first half of 2021,” said chief economist William Dunkelberg.