Small Business Majority’s latest survey reveals that the uncertainty of whether more help will arrive has left too many small businesses on the brink of collapse.
The survey finds that without additional funding, more than 1 in 3 (35%) small business owners will not survive past the next three months. The number is even higher for small business owners of color: an astounding 41% of Black and Latino-owned businesses won’t make it through the next few months without additional financial support. And 1 in 5 small business owners report they’ve considered filing for bankruptcy.
Given current market conditions, it is clear that absent major federal interventions, whole
swathes of the small-business sector will never return, minority business owners will suffer
more than their fair share of the burden, and entrepreneurship levels will remain depressed for a
generation or more. But the collision of these forces—COVID-19, economic consolidation, and
deep racial inequality—also create a window of opportunity for significant reform. This report
provides a five-step roadmap towards a more inclusive, dynamic, and productive small-business sector. We break down the five steps into ten major policy recommendations. While the
federal government must take the lead for many of our recommendations, we also suggest how it
can galvanize the full energy of public, private and civic institutions.
This report provides preliminary findings from the Select Subcommittee’s ongoing investigation of the implementation of the Paycheck Protection Program (PPP) by the Small Business Administration (SBA) and the Department of the Treasury (Treasury). The report finds that contrary to Congress’s clear intent, the Trump Administration and many big banks failed to prioritize small businesses in underserved markets, including minority and women-owned businesses. As a result, small businesses that were truly in need of financial support during the economic crisis often faced longer waits and more obstacles to receiving PPP funding than larger, wealthier companies.
Each profile focuses on the impact of small businesses in 436 congressional districts. Within, readers can find the congressional district’s total number of small employers and their industry breakout, plus the number of workers employed and payroll expended by small businesses. Additionally, the profiles provide a map showing the total number and distribution of self-employed workers across the district.
Since March 2020, businesses in the U.S. have been struggling to continue operations in the face of a global pandemic. The COVID-19 pandemic has resulted in a recession because of the widespread closures of non-essential businesses enacted to reduce the spread of the virus. Even as things begin to reopen, people are less likely to go out due to possible health risks. In response, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act which created the Paycheck Protection Program (PPP). The PPP is a lending program that provides money, in a potential grant format, to small businesses to help them weather the economic effects of the pandemic. The majority of the loan needs to be allocated for employee salaries and then the remainder can be used for other business expenses like rent and loan payments. The purpose of this study was to determine whether the disparities in small business lending we have detected prior to the COVID-19 pandemic continued with implementation of the PPP program.
To determine the initial effectiveness of government relief efforts, Gusto analyzed data from nearly 27,000 of our small business customers who reported receiving PPP loans and compared it to platform data from our 100,000-plus small business customers nationwide. The report below shows that PPP aid has helped to provide stabilization from the initial free fall in March ‘20, with strong increases in hiring and rehiring beginning in the second half of April ‘20.
NCRC developed a new ratings system for quantitative measures on banks’ community development financing under CRA. Our suggested ratings could increase community development lending and investment between $15 billion to $28 billion annually.
Opportunity Zones (OZs) are gaining momentum, and now that the rules regulating them are clearer, investors, local officials, developers, and businesses have been engaging with the incentive. In the two years since the Tax Cut and Jobs Act of 2017 created the incentive and Treasury-designated Zones, hundreds of Qualified Opportunity Funds (QOFs) have been created, and OZ investment was beginning to flow until the COVID-19 crisis began. But has this capital been reaching projects that benefit low- and moderate-income households and communities? Although the program is still maturing, and the COVID-19 crisis now poses new challenges whose resolution is unknown, this report offers an early, qualitative assessment of how well OZs have channeled capital into projects aligned with equitable development goals.
Since a declaration of emergency for COVID-19 was issued on March 13, 2020, total private employment dropped by over 15 percent. Small businesses employers bore the brunt of the job loss, with a decline of more than 17 percent.
In the fourth quarter of 2019, California grew at an annual rate of 2.2%, which was faster than the overall US growth rate of 2.1%. California’s 2019 overall growth rate of 2.6% was down from the 2018 rate of 4.3%. (Source: BEA)
In April 2020, the unemployment rate was 15.5%, up from 4.2% in April 2019. This was above the April 2020 national unemployment rate of 14.7%. (Source: CPS)