NewDEAL Task Force Releases Strategy for Maximizing COVID Relief to Small Businesses
WASHINGTON – The NewDEAL Forum’s Renewing America Task Force on Friday released a list of recommendations intended to help state and local governments maximize COVID-relief aid for small businesses.
Since the onset of the coronavirus pandemic in February, more than 97,900 small businesses across the nation have shut their doors permanently, according to a recent report in Fortune magazine.
“If economic trends continue at this rate, one in five business owners anticipates they won’t make it until the end of the year,” Kevin Kuhlman, the vice president of federal government relations for the National Federation of Independent Business, told the magazine.
The Renewing America Task Force was created to identify and promote the most effective state and local policy solutions for rebuilding the nation’s economy in the wake of the COVID-19 pandemic.
Its five co-chairs are Phoenix, Ariz., Mayor Kate Gallego; Mich. Lt. Gov. Garlin Gilchrist II; Shelby County, Tenn., Mayor Lee Harris; Baltimore, Md., Delegate Brooke Lierman; and Oregon State Treasurer Tobias Read.
The paper they released Friday is intended to serve as guidance for state, county and city leaders on how to maximize the relief available to entrepreneurs and provide more equitable opportunities in the recovery from the pandemic.
The full report can be read here.
The Task Force’s work on these issues included a specific focus on long-standing inequities that have impeded access to capital and technical assistance for people of color and other disadvantaged populations.
Emphasizing the Census Bureau’s finding that nearly half of companies nationwide believe it will be at least six months before their businesses return to a normal levels of operations, the task force’s priorities to support small businesses include:
- targeting limited city and state funds to fill gaps in federal support, and prioritizing preservation of businesses, recognizing that saving businesses is more efficient than waiting for new ones to open.
- providing assistance for small businesses to apply for federal support, as well as to help them understand how banks view their finances so that they can become more successful at applying for loans;
- helping businesses to protect public health and move services online/operate remotely where possible; and
- relaxing local regulations to allow businesses to operate more flexibly to meet public health guidelines, such as expanding space available for outdoor dining.
“While public health concerns should prevent businesses from operating normally during a pandemic, that is no excuse for the dire straits in which so many hard working entrepreneurs find themselves” said NewDEAL Forum CEO Debbie Cox Bultan.
“They deserve leadership from elected officials who think creatively and take every possible step to prevent small businesses from folding through no fault of their own,” Bulton said. “The guidance we release today provides actionable, feasible recommendations for state and local governments to maximize the support available to small businesses, while also recognizing that our goal is not simply a return to the pre-pandemic status quo but rather an environment in which traditionally disadvantaged entrepreneurs have fair opportunities to thrive.
“In addition, we cannot emphasize enough that even more can be done if Congress would set aside political posturing, and stop drawing unnecessary red lines, so they can provide direct business assistance and help states and cities of all sizes to plug enormous budget holes that impact all Americans,” she said.
The document, informed by conversations with state and local officials and policy experts, includes a list of key policy principles and goals followed by examples of innovative initiatives from across the country.
In addition to the steps above, key actions advocated by the Task Force include calls to:
- Support local and community banks;
- Create or support community development financial institutions;
- Consider a “second chance” lending program;
- Tap into the U.S. Treasury’s State Small Business Credit Initiative; and
- Eliminate unnecessary licensing requirements.
Among the model policies it highlights are microgrants for targeted industries in Shelby County, Tenn.; a Buy Local initiative in Albuquerque, N.M.; and the BankLOCAL program in Rhode Island, which moves state deposits to local banks and credit unions to make capital more accessible.