When the world shut down in March 2020, few could have foreseen what the next 12 months would entail. As the pandemic ballooned in severity and magnitude, the sweeping devastation to lives, livelihoods, and communities has posed once-in-a-lifetime challenges.
For America’s entrepreneurs, the losses continue to compound. By April of 2020, the number of active business owners in the United States had declined 22%—the largest drop on record. As the recovery stalls, people of color, women, and rural residents continue to suffer disproportionately. In December 2020, a jobs report showed a net loss of 140,000 jobs — each and every one by women.
As the COVID-19 pandemic continues, the nation is also grappling with an overdue reckoning on racial injustice and the effects of a divisive presidential election.
America’s New Business Plan will be updated and re-released March 2 to help policymakers and entrepreneurship advocates confront the realities of a changed world, building on the incredible efforts of Start Us Up members to do so in real-time. Where policymakers have struggled to meet the moment, members of the Start Us Up coalition have led in their communities — championing the needs of entrepreneurs and helping them navigate unprecedented challenges.
Throughout the pandemic, a number of organizations have advocated directly to Congress for turnkey relief to help struggling new and small businesses. Angel Capital Association, Center for American Entrepreneurship, Economic Innovation Group, Engine, Small Business & Entrepreneurship Council, Small Business for America’s Future, and Small Business Majority — among others —advocated in December for a relief plan that includes:
- zero interest rates,
- long-term loan maturity,
- overall administrative simplicity, and
- the flexibility to use the loans to cover a wide range of expenses and to improve the underlying resiliency of businesses.
- Reforming the Paycheck Protection Program by forgiving all EIDL loans under $150,000, setting aside $100 billion for CDFIs and other mission-driven lenders, forbidding lenders from using credit history to underwrite loans, and ensuring existing borrowers have five years to pay loans back.
- Strengthening the Affordable Care Act by strengthening the current system of subsidies and increasing investments in Federally Qualified Health Centers.
- Supporting paid family and medical leave, retirement and other benefits, including establishing a national program for partial wage replacement for self-employed and small business employees on leave.
Small Business for America’s Future released its own policy agenda, A Plan to Reinvigorate Main Street. Among the core pillars was a COVID-19 recovery plan centered on PPP forgiveness, including the following recommendations:
- Policymakers should pass a law forgiving all Paycheck Protection Program (PPP) loans of $150,000 or less.
- Policymakers should greatly simplify the PPP loan forgiveness process for small businesses that have loans of less than $2 million.
- Policymakers should create no-strings-attached recovery grants for small businesses with 20 or fewer employees, which comprise 89% of all small businesses in the country.
The Rural Community Assistance Partnership (RCAP) urged Congress to specifically increase support for the Economic Development Administration’s Technical Assistance Program to allow qualified nonprofits to assist economically distressed small, rural and underserved communities with pre-development activities associated with accessing EDA programs and services.
In September, the Small Business & Entrepreneurship Council released a report on regulation crowdfunding, discussing how Congress can build on the JOBS Act to create a Main Street Recovery Co-Investment Fund specifically for small businesses during the COVID-19 recovery.
- “The federal government would match 100% of funds raised from communities, via a securities based crowdfunding platform (not to exceed $250,000 per business). A budget of $20 billion would impact over 100,000 [small businesses]. The co-investment fund is a community/private sector-driven public-private partnership that utilizes online funding platforms currently regulated by the SEC.”
John Dearie of the Center for American Entrepreneurship and Rustin Finkler of Village Capital argued for Congress to make new funding opportunities available to young businesses, building on successful federal-state partnerships to support small businesses, such as the State Small Business Credit Initiative.
- “Incentivize continued venture capital investment in America’s most innovative and promising young companies by establishing a program, administered by the Treasury Department, which would allocate $2 billion in federal dollars to the states on a straightforward population basis to attract private venture capital by offering a 1-to-1 match of federal dollars with venture capital investment in promising startups, particularly in states outside the major venture capital centers.”
To guide new and small businesses through the pandemic, including helping them understand available grants and funding streams, a number of Start Us Up members compiled resources online, including SCORE’s Small Business Resilience Hub and Hello Alice’s COVID-19 Business Resource Center. In particular, Hello Alice’s resource center — broken down by industry and for Black, Latino, and veteran entrepreneurs — has proved an invaluable resource as reports surfaced showing the extent to which the Paycheck Protection Program failed to equitably reach entrepreneurs of color.
Countless members of the Start Us Up coalition have been active in their cities and communities to support local populations suffering due to the pandemic:
- New Jersey-based Rising Tide Capital announced a partnership with PayPal to distribute $5 million to Black and underrepresented minority businesses and communities
- Hello Alice partnered with the NAACP to release $4 million in grants to Black-owned businesses.
- Living Cities partnered with Fortis Capital and the City of Minneapolis to address racial disparities in business ownership, creating jobs and building wealth in communities of color.
- The Metropolitan Economic Development Association (MEDA) awarded six minority-owned startups a combined $1.1 million as part of its third annual Meda Million Dollar Challenge.
- In Detroit, TechTown has been active throughout the pandemic, most recently announcing a partnership with Comcast to provide grants to 100 BIPOC small businesses, as well as hosting virtual entrepreneurship training programs to help prospective entrepreneurs gain valuable skills amid a pandemic.
- 1871 launched a new accelerator specifically devoted to building Black-led tech startups.
This just scratches the surface of the long list of funding and opportunity initiatives to support business owners in a time of immense need. The coalition roundups on the Start Us Up blog highlight more efforts from members of the coalition to provide support, advocacy, or commentary on issues related to America’s entrepreneurship recovery.