Six ways lawmakers can support America’s small businesses
As the U.S. waits for widespread distribution of COVID-19 vaccines now being administered all across the globe, America’s small-business community continues to be ravaged by the economic impact of the pandemic. Nearly all economic indicators point toward a long, slow recovery through 2021 as millions of small businesses hang in the balance.
This year must be one where America helps our small business community survive and rebuild along our nation’s Main Streets. The National Association for the Self-Employed (NASE), in coalition with the Small Business Roundtable and many other small business groups, continues to advocate for more financial relief for the community. It is imperative that our elected leaders on both sides of the aisle come together for our country’s entrepreneurial spirit to survive.
The small business community is the hallmark of the American economy — from small neighborhoods to booming communities, it’s the mom-and-pop shops providing the economic fuel for our local and national economies. In 2019, the Small Business Administration (SBA) estimated there were over 30 million small businesses across the United States, representing 99.9 percent of all U.S. businesses. In a normal operating year, these small businesses generate 1.5 million jobs — 64 percent of all new jobs, according to Fundera in 2019.
But the news was grim last year: The largest national poll of diverse business owners conducted during this ongoing pandemic indicated minority-owned small businesses were struggling the most. While 10 percent expect to close permanently in the next six months, 45 percent expect to lay off at least one employee. Thirty-three percent of Black-owned, 26 percent of Native American-owned and 21 percent of Hispanic-owned businesses report having less than a month of cash to cover expenses.
Furthermore, a survey by the Small Business Roundtable found the pandemic has had a devastating impact on small businesses. As a result of our nation’s vast array of lockdowns, countless small businesses either shut their doors, laid off employees, or had to curtail their services and/or products for their customers.
Despite the challenges, there were some positive signals. The survey also found small business owners adapted to the new normal by finding new and innovative ways to conduct business. The self-employed also welcomed members of the gig-economy workforce into their ranks. On-demand drivers now join freelancers, bakers, carpenters and accountants as solo entrepreneurs, illustrating the growth, elasticity and power of this growing business demographic.
Last November’s overwhelming passage of California’s Proposition 22, legally defining gig-economy workers, Uber and Lyft drivers as “independent contractors” and not “employees,” demonstrates not only a new workforce but also a workplace epitomized by the pandemic. Many of these entrepreneurs will find a whole new world with many risks, rewards and responsibilities. They will face new reporting requirements, new taxes, new compliance issues and estimated tax payments — all while creating most of the new jobs this country will need.
As Americans turn to self-employment and small business ownership, our government and elected leaders must commit to pro-growth and pro-entrepreneurship policies. While the two COVID-19 relief bills last year were a good start, the Biden administration and Congress must do more for our struggling community — including these six areas they can work together to support America’s small businesses:
- Payroll Protection Program (PPP): Congress should continue to utilize the PPP to support small businesses for the foreseeable future. Providing small loans to support businesses as the vaccine is deployed in the months ahead is critical.
- PPP loan forgiveness: We applaud Congress for passing legislation allowing the SBA to forgive loans of $150,000 or less. Congress should assess if that dollar threshold should be increased to account for second PPP draws. Further, Congress should ensure any loan forgiveness process is streamlined and simple.
- Access to capital: Congress should focus on opening new lines of capital, making sure the process is easy to apply for and that small businesses receive the money in a timely manner to maintain business operations.
- Tax equity and simplification: Congress should continue its focus on simplifying the tax code for small business owners. Expanding the concept of standard deductions would free up valuable time, which would lead directly to new jobs.
- Health care: Congress must assess how best to facilitate the purchase of health insurance for small businesses. This could include changes to the Affordable Care Act by making access to health care more affordable for small business owners while identifying additional options to gain coverage, or to ensure continuity of coverage.
- Retirement options: While many small businesses don’t have the same retirement benefits and opportunities as large corporations, Congress must implement creative retirement options for small businesses so that all Americans can retire with dignity regardless of job, status or employment structure.
During this perilous time, we all know this pandemic isn’t likely to end anytime soon for the small business community. A walk or drive through the small business corridor of any American town or community exposes the real-world impact on the hardworking small businesses we represent: shuttered doors, darkened front windows, take out or delivery-only signs, handmade notes to customers: “Closed for the winter, see you in the spring!”
For entrepreneurship to continue to be a part of our American story, 2021 must be the year that leaders of all political stripes come together to support the small business community.
Keith Hall is president and CEO of the National Association for the Self-Employed (NASE), the nation’s leading advocate and resource for the self-employed and micro-business community.
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