President Joe Biden’s stimulus package sent more than $400 billion in funding to small business owners to keep them afloat in the first year of his presidency.
Almost a year ago, despite unanimous Republican opposition, President Joe Biden pushed his landmark pandemic stimulus legislation through a Senate with a razor-thin Democratic majority. The American Bailout Act revitalized the economy and delivered billions of dollars to struggling small businesses, according to a new report from nonprofit Invest in America.
“Today, many small businesses have been able to stay afloat, thanks in part to the help of the ARP,” Awesta Sarkash, government director of the nonprofit Small Business Majority, said in a statement provided to the American Independent Foundation. “These targeted programs have strengthened small businesses during difficult times and provided them with the tools they needed to survive.”
America’s bailout plan, which took effect in March 2021 and provided $1.9 trillion in federal funding for stimulus checks, unemployment benefits, child tax credits, local emergency funding and more, came at a crucial time for small businesses, supporters said.
In February last year, according to a opinion poll from the small business majority.
The American Rescue Plan also included important small business owner programs such as the Paycheck Protection Program, the Restaurant Revitalization Fund, and the Shuttered Venue Operators Grant.
The law committed an additional $280 billion to the PPP loan program, which provides federally guaranteed, royalty-free, forgivable Loans to keep small businesses afloat by paying for expenses like employee benefits, payroll, mortgage or rent payments, utilities, and COVID-19 safety gear.
While the program was originally created to support small businesses under President Donald Trump under the 2020 COVID relief bill, the CARES Act, a Washington Post analysis Small Business Administration data later showed that more than half of the money went to large companies. However, last year 96% of PPP loans went to companies with 20 or fewer employees that Invest in America report shows.
Additionally, the Shuttered Venue Operators Grant paid out $13.4 billion to about 13,000 theaters and other venues last year to help offset their lost revenue due to closures during the pandemic.
And the Restaurant Revitalization Fund paid out $28.6 billion to restaurants with the same goal in 2021. By supporting more than 100,000 restaurants, the fund has saved 900,000 workers from their jobs, according to the National Restaurant Association estimated.
96% of restaurant scholarship holders called it likely allowed them to remain in business during the pandemic, and 86% said it allowed them to retain or rehire employees who would otherwise have been out of work.
“[In the beginning of 2021]we’ve seen many small business owners lay off employees, and most small business owners will tell you their employees are like family, so it was all the worse,” Sarkash told the American Independent Foundation.
When the pandemic first hit in March 2020, businesses suffered a huge slump in revenue as lockdowns kept shoppers at home. But the toll has been particularly pronounced for small businesses that have not been as willing to move their services online or find ways to continue serving customers.
“You could own an independent bookstore, a hardware store, or a toy store and had to close, but someone could go to Walmart to buy groceries and while they were there they could buy books, they could buy clothes, they could buy hardware.” , Kennedy Smith, a researcher at the advocacy organization Institute for Local Self-Reliance, told the American Independent Foundation.
Experts argue that keeping small businesses afloat is vital to the economy. The Invest in America report links ample small business funding to a historic economic recovery that some economists are seeing treasure eight times faster than after the Great Recession that ended in 2009. In 2021, the economy created 6.6 million jobs and 5.4 million new private businesses.
“During the shutdown, when people weren’t able to access their local businesses, I think that made them realize that their local businesses in their community play a huge role in keeping our economy alive,” said Derek Peebles, Executive Director of the American Independent Business Council said in a phone call.
Now, as they mark the first anniversary of the passing of America’s bailout plan, small business advocates want to see more action from Biden to support small businesses.
A couple recommendations by Smith include comprehensive training programs for new business owners; affordable operating space; childcare services for owners and employees; and minority-owned enterprise development programs to bridge the gap in racial entrepreneurship.
“[The American Rescue Plan] At least it helps salvage small businesses from the damage they’ve suffered during the pandemic, but it doesn’t do much to change the overall environment for small business development,” Smith said.
Smith and other small business advocates want more investment in recognition of the central role small business plays in American civic life.
As Chanda Causer, co-executive director of the Main Street Alliance organization, told the American Independent Foundation, “This investment in sustaining these businesses is an investment in the next generation. It’s an investment in education and civic life, our public systems, our firefighters — without those things, our ecosystem begins to fall apart.”
Published with kind permission of the American Independent Foundation.
