What small business owners might expect from Biden
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It’s been months since Daniel Jacobs ran out of Paycheck Protection Program money for his Milwaukee restaurant, DanDan. Now, he’s tapping into an economic disaster loan from the Small Business Administration.
Jabobs said it’s helpful, but it’s not the type of aid he’s hoping for.
“Giving us another loan is not the answer, man,” Jacobs said. “We need grantable money.”
Jacobs said a grant would be more flexible than his PPP loan was. He had to spend that on payroll, rent and utilities in order for the loan to be forgiven. But Jacobs said his restaurant has plenty of other costs.
“Thirty percent of my income is spent on food,” Jacobs said. “If it’s not our biggest expense, it’s our second biggest expense monthly, outside of labor.”
The economic team that President-elect Joe Biden announced last week will have to figure out how to help the millions of small businesses that are struggling to survive the pandemic economy.
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.
“That’s actually the right focus, when you talk about small businesses,” said Veronique de Rugy, senior research fellow at the Mercatus Center at George Mason University.
De Rugy said making funds available to businesses with as many as 500 employees took the focus away from the ones that needed the money most.
Biden also wants to make it easier for small businesses to access capital more generally.
Amanda Ballantyne is executive director of the Main Street Alliance, a small business advocacy group. She said the smallest businesses — say, those with fewer than 10 employees — often have a hard time raising money.
“They’re generally considered high risk in private lending, so there’s a lot that can be done to create programs that are really looking at micro-entrepreneurship,” Ballantyne said.
Whether or not the Biden Administration will be able to accomplish any of these goals will depend on which party controls Congress. And we won’t know which one controls the Senate until January.
But Ballantyne said Biden could work on some goals through regulation and by working with the Federal Reserve.
COVID-19 Economy FAQs
What are the details of President Joe Biden’s coronavirus relief plan?
The $1.9 trillion plan would aim to speed up the vaccine rollout and provide financial help to individuals, states and local governments and businesses. Called the “American Rescue Plan,” the legislative proposal would meet Biden’s goal of administering 100 million vaccines by the 100th day of his administration, while advancing his objective of reopening most schools by the spring. It would also include $1,400 checks for most Americans. Get the rest of the specifics here.
What kind of help can small businesses get right now?
A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.
What does the hiring situation in the U.S. look like as we enter the new year?
New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.