Small businesses continue to struggle in the closing days of 2020 as COVID-19 infections increase across the U.S. Since we are experiencing a presidential transition at the same time that the virus is reaching yet another peak, it is crucial that any incoming president has a solid plan to help entrepreneurs cope and flourish in the difficult months to come.
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What is President-elect Biden’s plan for COVID small business relief?
President-elect Biden recently published his small business COVID-19 relief plan, as part of his overall economic recovery plan. The Biden presidential campaign website, Build Back Better, lists the priorities of his administration, with small businesses as one of his primary concerns.
Aid for Small Businesses
The President-elect proposes a Main Street recovery aid package for eligible entrepreneurs and small businesses. The targeted aid will allow small businesses to, in essence, restart as COVID-19-safe and to operate more successfully in the current health climate. This includes the government stepping in to supply these businesses with PPE, masks, and plexiglass.
He has also declared that he wants to provide the same aid to small businesses that Wall Street and large corporations have received twice in the last twelve years. He wants help to be easily accessible, without applicants having to jump through “flaming hoops” to receive it.
Opportunity Plan for Minority-Owned Small Businesses
In addition, the President-elect has a separate small business opportunity plan for the hard-hit African-American neighborhoods and other BIPOC communities. The novel coronavirus has disproportionately affected these areas, and subsequent business closures and unemployment have reached all-time highs.
To start, the Biden plan would allocate 10% of the federal money already guaranteed to stimulate the economy into an opportunity fund for small businesses. For every dollar in public funds provided to struggling minority-owned small businesses, the Biden plan would leverage five times as much in private investment.
The President-elect would also like to set aside $50 billion in federal funds to cover start-up costs for minority-owned businesses based in disadvantaged areas.
Extended Unemployment Benefits
Lastly, President-elect Biden wants to extend insurance for displaced and unemployed workers as long as COVID-19 remains a serious threat.
What is the government’s role in helping small businesses recover from the pandemic?
The government is choosing to pay attention to small businesses because they are, and always have been, an essential part of the economy in the United States. Providing nearly half of the jobs nationwide, they also extend essential services and goods to the public.
While entrepreneurs are receiving help from the private sector, the government has a vested interest in keeping both small businesses and large companies afloat. Their success keeps citizens off of unemployment compensation rolls, and their combined contribution to the economy is immeasurable.
In addition, smaller community banks should be guaranteed risk protection by the government. This will encourage them to once again sign Lending Contracts with small businesses that need the money now more than ever.
What are the President-elect’s proposals for small business programs and aid?
President-elect Biden has suggested several specific proposals as part of his small business recovery plan. Here are some of the best proposals, described in detail:
Ensure Small Business Funds Are Allocated as Intended
Sixty billion dollars in funds have been secured by Democrats in Congress for community-based lenders and financial institutions. This money is usually given to deserving entrepreneurs and small businesses. President-elect Biden wants to ensure that large conglomerates do not swoop in and take this money as they have during earlier rounds of funding. He also wants to make sure that minority-owned and female-owned businesses are not being skipped over or left out completely.
Change PPP Rules to Aid Small Businesses
President-elect Biden would like to change the rules set forth by the Paycheck Protection Program (PPP) so that all entrepreneurs and small businesses receive the assistance they need. These changes include:
Eliminating the Cap on the Small Business Fund – The President-elect wants to guarantee relief for all businesses and ensure that they will no longer have to compete for resources.
Ensuring that Many More Loans are Authorized – President-elect Biden wants to provide more loans to allow a greater number of employees to remain on payrolls. These generous loans will be offered to cover bills and costs as long as COVID-19 remains a threat.
Extending the Eight Week Payroll Limitation – The President-elect would like Congress to permit small business loans allowing employees to continue to be paid for much longer than the current protection period of eight weeks. He also wants to allow more flexibility for companies to establish when the covered period starts.
How likely is it that businesses will get financial relief given a divided Congress?
The President-elect gave his support to a nearly trillion dollar stimulus bill aimed at providing temporary relief for small businesses and workers most affected by the current COVID-19-influenced recession. This bill was passed by Congress and signed by President Trump on December 27.
While President-elect Biden supported this bill, hammered out by a bipartisan group of lawmakers over many weeks, he noted that the solutions provided by the bill are a temporary fix. His plans, once he takes office, are larger in scale and sure to ruffle feathers.
As lawmakers in the House and Senate continue to navigate the challenges ahead, it will take courage, leadership, and cooperation to get help to the millions of Americans who need it most, including small businesses. If you have COVID-related legal questions, check out the Rocket Lawyer COVID-19 Legal Center. For other legal questions, be sure to ask one of our Rocket Lawyer On Call® attorneys.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.