+ Expanded & Immediate Cash Flow to Small Businesses

Save Our Economy: Protect Main Street Jobs & Businesses

While the current Paycheck Protection Program (PPP) provides an important initial stopgap, it is fundamentally flawed. The SBA and bank lending system is inadequate to deliver the aid needed for small businesses to bridge the crisis and keep employees off the unemployment rolls. Moreover, the PPP is loan-based, asking small businesses to assume more debt amid terrifying uncertainty.

Over a quarter of small businesses are at risk of immediate shutdown and over half are vulnerable to severe disruption or shutdown. Women entrepreneurs and small business owners of color are particularly at risk due to longstanding barriers to capital. We need programs that help address inequity in financing, not exacerbate this problem. The federal government should adopt:

• Direct subsidies – not loans – for all employers with 500 and fewer employees to retain or bring back their workers at full wages and benefits and cover fixed costs, including rent, mortgages, utilities, insurance payments. (Most other industrialized countries including Germany, Britain, and Denmark have adopted this approach.)
• A rapid, streamlined process designed to provide subsidies for all impacted employers and independent contractors with minimal barriers to entry and no confusion or uncertainty.
• Delivered through the U.S. Treasury, with resources directed to multiple agencies, including state and local governments, to ensure effective and universal take up especially among communities of color and other disadvantaged groups.
• Subsidies convert to loans if misused. Businesses should be required to maintain employment and wage levels and provide access to emergency paid sick time and leave as a condition for receipt of assistance, monitored through payroll tax receipts.
• Rapid data collection on all COVID relief small business programs regarding uptake and impact to target additional outreach and resources to failing sectors.
• Safeguards against excess fees and predatory small business lending, including a cap APR for small business loans, ban on confessions of judgement, limits on small business debt collection and a moratorium on commercial evictions

To protect the solvency of Main Street businesses, these additional cash flow relief measures are needed:

• Fair, smart regulations and payment options to avoid end-of-year balloon payments and protections against harm to credit scores.
• Protection against predatory small business lending and other financing (including merchant cash advances): including APR caps, bans on excess fees, and confessions of judgment, and limits on small business debt collection
• Moratorium on commercial evictions and utility shut-offs, commercial rent control, and rent and mortgage forgiveness through the duration of the crisis and recovery period. Utility payment relief (reducing penalties for late payments or discounts)
• Small business insurance, with a government-backed reinsurance pool as an alternative to business interruption insurance lawsuits, as well as insurance rate relief during closure.
• Conversion grants and loans to cover capital costs for owners that are adapting their businesses.
• Stronger tax enforcement for corporations and wealthy individuals to ensure equitable contributions toward recovery.
• Deferral or one-time waiver of local business and property taxes

In addition, we need improvements to the programs now in existence. The rocky rollout of the Paycheck Protection Program (PPP) has left small business owners confused, frustrated, and fearful. Many banks said they would take applications only from businesses to which they already lend -- which particularly excludes businesses that are Black-owned, women-owned, and/or immigrant-owned.

• Make PPP more effective by: 1) expanding overall funding; 2) adjusting program to meet a longer recovery horizon; 3) expanding percent of loan eligible for non-payroll expenses; 4) adjusting loan size to reflect not only payroll but all expenses covered for forgiveness; and, 5) adding a grant program for businesses with fewer than 50 employees
• Expand targeted outreach and education on programs via CDFIs and other community agencies, focusing on businesses in low-income and underserved communities
• Make emergency relief compatible with existing loans, preventing existing loans from going into default if businesses accept EIDL or PPP
• Expand EIDL grant pool, increasing the amount of available loans, allowing use for capital costs as owners adapt businesses recovery, and allowing restructuring of existing EIDL debt
• Provide capital for lending to Community Development Financial Institutions; fund outreach by CDFIs, cities, and states for outreach; rapid approval by banks of low-cost loans with SBA/CDFI fund backfill; Fed and Treasury purchase of loans from CDFIs; and support for rural banks.

Click here for a PDF of our full Save Our Economy: Protect Main Street Jobs & Businesses white paper

+ Improved unemployment insurance, income support, and safety protection for workers

The small business sector cannot survive without consumer demand, money circulating locally, and a healthy workforce. Unemployment insurance (UI) will continue to serve as an economic backstop, but it is buckling under the weight of the pandemic. Moreover, many workers are excluded, including undocumented workers, who carry out crucial functions in our economy. Sudden loss of income for workers is devastating families and creating a domino effect for Main Street businesses.

The federal government must also protect essential workers who -- at great personal risk -- are feeding the country, delivering goods, caring for others, and maintaining basic societal functions. This workforce will shrink as dangers escalate, endangering essential businesses from grocery stores to repair shops.

• Expand state capacity and outreach with $10 billion in UI administrative funding for state agencies and UI navigator grants for community organizations
• Extend UI through the pandemic using tiered system of extended and expanded UI benefits with on and off triggers based on economic conditions, not certain dates
• Permanent federal standards for UI including 26-week minimum of benefits, mandatory minimum of two-thirds wage replacement, and mandatory work-sharing for all states
• Establish UI eligibility for all workers experiencing unemployment, without immigration-related discrimination, and create alternative funding streams to correct loss of UI funds harming immigrant workers
• Small business experience-rating protected from COVID-related impacts
• OSHA emergency temporary standard for the health and safety of all essential workers
• Premium pay for all essential workers
• Extend all tax rebates or direct cash payments to all taxpayers, including those who file with ITINs and in mixed-status families, and create an application and automatic eligibility for people with income below federal tax filing requirement and/or who receive public benefits
• Expanded funding for safety net programs such as SNAP and Medicaid
• Implement immigration relief for DACA and TPS holders, including the 27,000 immigrant youth with DACA who are currently working in frontline medical jobs

+ Affordable health care and emergency measures to protect coverage

Health care has long been a major Main Street concern, and the pandemic underscores the urgent need for health care for everyone in the country. Almost 28 million people are uninsured in the U.S., and an alarming share of those who have already died from COVID-19 are Black. The federal government must mobilize to ensure equitable distribution of health care resources and stop any pandemic profiteering.

• Health care for all
  • COVID care for all, including immigrants, with all COVID-19 related care paid for by a universal federal program to ensure workers get needed care and can return to work
  • Automatic enrollment of the unemployed in traditional Medicare
  • Reopen ACA open enrollment period and drop the lawsuit to overturn the ACA
  • States should work with insurers to help ensure extension of small business policies through this crisis, even if a small business experiences cash flow issues
  • Expand Medicaid eligibility and include coverage of and eligibility for COVID-19 testing, treatment, and vaccines in emergency Medicaid
• A public health plan of action, with comprehensive COVID-19 testing and treatment
• Stop drug corporation profiteering
  • Require fair and reasonable prices for all COVID drugs developed with taxpayer funds so all people can afford them
  • Block drug corporation monopolies that enable Big Pharma profiteering off COVID treatments and vaccines
  • Mandate that the Trump Administration--including Secretary Azar, a former Pharma executive--publicly disclose how much taxpayer money is going to drug corporations to create treatments and vaccines
  • Any vaccines must be free to the public and low-cost to government
• Ensure adequate funding for health care
  • Increase government investment in public health programs, including Medicare and Medicaid (including a 15% FMAP increase)
  • Direct, unrestricted funding to state and local governments to help address the cost of the crisis and guard against health care and other budget cuts
• Ensure that immigrants are able to seek and receive health care
  • Halt implementation of new public charge rule impeding immigrants’ access to care
  • During outbreak and recovery, halt immigration enforcement and detention practices, which exacerbate the spread of coronavirus, and require free access to health and sanitary supplies while people remain in custody

+ Investment in our care infrastructure (paid leave, earned sick & safe time, and child care)

Earned sick leave and paid family and medical leave are frontline, essential policies that have the power to reduce the spread of illness. Workers must be able to take time away from work if they are ill or need to care for a sick family member without fear of lost income. We must:

• Expand emergency sick leave and paid leave to cover businesses with 500 or more employees
• Require documentation to ensure advance payments for coverage are used as intended
• Make sick leave and paid family and medical leave structures permanent, so we can be prepared for the next crisis

Efforts like the PAID Leave Act, sponsored by Senators Murray and Gillibrand, would both swiftly reimburse employers for all paid sick days and paid leave in 2020 and 2021, and establish national programs for earned sick time and a self-sustaining family and medical leave insurance program for all workers that are critical supports to put in place for any next crisis.

We also need significant and enduring investment in early learning and care, or we risk denying our economy -- through crisis and recovery -- the critical support a robust child care infrastructure would provide. First and foremost, child care providers need access to small business subsidies to keep employees on payroll. While many centers have shuttered, others are opening their doors and rosters to provide essential care during this pandemic. These institutions deserve to be treated as essential; they are making it possible for health care workers to be on the frontlines. Flexible funds are needed to:

• Keep essential child care centers’ doors open
• Subsidize family copays
• Provide technical assistance for online learning and other unique needs
• Guarantee occupational safety and health training and protective gear for all child care workers
• Ensure that all child care workers have health coverage

+ Securing the future of our economy

Eventually the pandemic will end, and we must ensure that our economy can navigate that transition. In a small business economy, businesses of all sizes have the opportunity to be employers of choice in their communities. Bringing our Main Street businesses back online on a level playing field will be critical to preventing a tertiary economic aftershock, where businesses are ready to rebound but a monopolized real estate market, increased corporate concentration, and unprepared labor force prove unworkable.

• Ensure the wealthy pay their fair share during this crisis and beyond
• Prohibit pandemic profiteering and price-gouging
• Create protections against predatory private equity and corporate consolidation
• Invest in regional supply-chain planning so critical manufacturing or distribution networks can quickly come back online
• Plan for extended support to localities where greater shares of the economy, and subsequent local tax revenue, are comprised of the hardest hit industries
• Build resilient infrastructure, including supports for small businesses that are able to reopen to better prepare for the next crisis