10 ways to make sure small businesses weather the storm and can rebuild for the long term – America can’t afford to lose its small business sector; government, at all levels, needs to listen to entrepreneurs and prioritize solutions that support new and small businesses.
The passing of the $480 billion relief package to help small businesses and hospitals is a step in the right direction.
Part of me, however, can’t help but fear what happened less than two weeks ago. The original federal small business relief program – the $350 billion Paycheck Protection Program – ran out of money quickly. Small businesses were left in danger while policies continued to favor big business. We cannot let that happen again.
In late March, only 20% of entrepreneurs rated the economic climate as positive for entrepreneurship – a more than 30% drop from earlier in the month. In contrast, 60% of entrepreneurs believe the economic climate remains positive for big business.
The type of local innovation we’re seeing from Accelerator for America, the Birmingham Strong Fund, and the KC COVID-19 Small Business Relief Fund is critical to address the needs of small and new businesses during the pandemic, and there are similar examples throughout the country.
But the federal government needs to take action, too, with both short-term and long-term policies that can further ensure small businesses weather this immediate crisis and rebuild for the long term.
We need to take action now to position small business owners and entrepreneurs for success. Our nation’s long-term prosperity depends on it.
To respond adequately to the crisis, here are some ideas we should be considering now:
- Eliminate business registration and occupational licensing fees until full economic recovery.
- Have state and local governments partner with philanthropy to create funding pools that reduce fees and interest of short-term lending to businesses not eligible for SBA loans.
- Create an SBA set-aside for businesses under 20 employees.
- Provide tax incentives to new businesses to offset health care costs.
- Forgive student loan debt for entrepreneurs.
- Create a plan with the SBA to develop and deploy an Entrepreneurship Corp, or “E-Corps,” to provide support to underserved communities that apply for assistance.
And to rebuild for a stronger future, we should consider:
- Replacing licensing with less onerous forms of regulation, such as certifications or permits, in industries where public health is not seriously threatened. For example, in most states, it takes more licensing to run a nail salon than to operate a child-care facility.
- Requesting that Congress make substantial funding available to states for strengthening the private financing of new businesses by expanding capital access to people of color, women, immigrant, and rural entrepreneurs.
- Urging capital access programs to give preference to entrepreneurs launching new businesses by making the age of a business, not its size, a key factor in approving loans.
- Including entrepreneurship and applicable information and tools in workforce training programs to help tens of thousands of young Americans start their own businesses.
How COVID-19 Sparked Innovative Entrepreneurship on the Pan-European Scale
During the last week of April, the European Commission under the patronage of Mariya Gabriel hosted an online pan-European Hackathon #EUvsVirus. It brought together more than 20,000 enthusiastic participants: entrepreneurs, researchers, civil societies, big businesses and the government. In a course of 48 hours, registered teams had to come up with innovative solutions that can be implemented immediately to fight the spread of the COVID-19 and its negative impacts on our society.
There were six main topics: Health & Life, Business Continuity, Social & Political Cohesion, Remote Working & Education, Digital Finance, and Other. Within them, there were 37 challenge tracks devoted to a smaller pocket of those key topics. At. the end of the Hackathon weekend there were more than 2,000 unique projects submitted.
As a think tank for sustainable development composed of self-employed experts, we saw it as a great opportunity to come up with an idea that could help empower entrepreneurship in the time of crisis and propose it to the EU government.
According to the reports of the United Nations, International Labour Organization and OECD, self-employed people and freelancers are one of the groups that are affected the most by the slowdown of the economy and the quarantine. There are over 32 million self-employed professionals in Europe. But there is no policy covering their unemployment or sick leave. Their savings at the beginning of the lockdown were estimated to last two to three months on average. That means that soon they might be at risk of poverty.