2020 will certainly live in the record books as a year we would all like to forget. The uncertainty is continuing on into 2021 about how much longer the stay-at-home orders and economic strain will last. To many small business owners, getting through this year is all about survival and making the hard decisions about what bills to pay.
Politics doesn’t matter to small business owners – it’s just about keeping the lights on and getting money whenever they can – but this is a GOLDEN opportunity for Democrats to win over moderate Republican business owners. This could reshape politics long-term for business owners who have tended to side with Republicans on the fiscal management front.
According to data released by the Bureau of Labor Statistics, employers cut 140,000 jobs in December, signaling that the economic recovery from the coronavirus pandemic is backtracking. Most small business owners see it getting worse before it gets better.
On December 20, 2020, both chambers of Congress announced that they had agreed on a new stimulus bill, which the President ultimately signed into law. My company is seeing unprecedented demand for the federal Paycheck Protection Program (PPP), an SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. Getting PPP approval is a lifesaver for many small businesses, but from what we are seeing, we do not believe the money will last long, contrary to what the government is saying.
The Economic Injury Disaster Loans (EIDL) loans that the Small Business Administration (SBA) provided last year have mostly been used up. If the upcoming administration can increase that program, it will result in huge dividends of support from the small business community. If the incoming administration an increase that program, it will be a huge relief for business owners.
What is the buzz on what a Biden presidency means for small business? “I suspect that he has every intention to grow the economy and assist small business owners,” says Vincent Hutchings, a research professor at the Institute for Social Research at the University of Michigan. “After all, Biden has been supportive of efforts in the House of Representatives to provide a larger stimulus package to Americans. This would, at least according to its supporters, definitely provide relief to small businesses and allow the economy to weather the negative effects of the growing COVID-19 pandemic.”
“Small businesses will be fine, and they are likely to receive financial aid in the first half of 2021, as the pandemic will still be impacting us for a while,” said Sean Nguyen, director of Internet Advisor. “I think a Biden presidency can mean great things for these small, local businesses since they’re not the ones targeted by tax increases and other policies that can impact them negatively. If anything, we’re going to see a larger effort to save local economies. Small mom-and-pop shops and other small businesses are essential, now more than ever.”
Biden has called for flexible grants to businesses that have lost substantial revenue. He also wants to refocus the Paycheck Protection Program on businesses with fewer than 50 employees, instead of the current 500. I am confident that the new administration will pass an additional business stimulus plan as Biden and his team have to figure out how to help the millions of small businesses that are struggling to survive the pandemic economy.
The fate of small business is critically important and they represent the anchor of our economy. J.P. Morgan reports that “over 99 percent of America’s 28.7 million firms are small businesses. The vast majority (88 percent) of employer firms have fewer than 20 employees, and nearly 40 percent of all enterprises have under $100k in revenue.”