Main Street welcomes added aid in Biden's Covid relief plan as PPP funding sees demand from micro businesses
- Biden's American Rescue Plan includes $15 billion in grants to help the hardest hit businesses and $35 billion for small business financing programs.
- The staggered Paycheck Protection Program reopening continued Friday for lenders with under $1 billion in assets. It opens Tuesday for all other lenders.
- At Sunrise Banks in St. Paul, Minnesota, demand for aid has been high from smaller companies since the program opened on Monday.
As President-elect Joe Biden lays out his sweeping $1.9 trillion economic plan and response to the pandemic, small business advocates are welcoming additional aid for a Main Street that continues to be hammered by Covid.
Biden's American Rescue Plan includes $15 billion in grants to help the hardest hit businesses and $35 billion for small business financing programs.
"An economy that is fully re-opened and recovers with relative speed will save countless Main Street businesses and jobs, and provide a spark for new entrepreneurs to launch new businesses and hire," said Karen Kerrigan, SBE Council president and CEO, in a statement. She added, small business recovery is a vital part of the overall economic rebound.
"Clearly, specific industries and areas of the nation have been hit harder than others, and initiatives focused on these sectors and communities will bring about a more balanced recovery," Kerrigan said.
The aid Biden laid out would be in addition to the current Paycheck Protection Program, which reopened this week with both new fraud protections and an emphasis on serving smaller businesses that may have missed out on aid when the program rolled out last year. Community lenders began offering first-time loans on Monday, and second-draw PPP loans on Wednesday. The staggered opening continues Friday for lenders with under $1 billion in assets. It opens Tuesday for all other lenders.
At Sunrise Banks in St. Paul, Minnesota, demand for aid has been high from smaller companies since the program opened on Monday. CEO David Reiling praised the Small Business Administration's decision to let community lenders lead the way this round. The aid requests coming in are small but show that micro-businesses and sole proprietors are in need.
"The vast majority are going to be sole proprietors and these loans are going to be maybe a couple thousand dollars. In some cases, our lowest one today has been $250," Reiling said.
Beyond small business aid, Biden's proposal includes $1,400 direct payments to individuals, a national vaccine strategy and a $15 an hour federal minimum wage.
Biden's call for a more than doubling of the current federal minimum wage drew both criticism and praise. Pew Research has shown 67% of Americans favor raising the wage to $15 an hour.
The International Franchise Association said it was pleased to see vaccine strategy and aid for businesses but said the wage hike could be counterproductive.
"Our goal is to ensure small businesses can continue to provide for their communities and their employees. However, a requirement to more than double some workers' wages will harm struggling businesses and likely slow the recovery," said Matt Haller, IFA senior vice president of government relations and public affairs, in a release.
Small business confidence dipped in December as Covid-19 cases surged and Main Street awaits the changing of the guard in D.C. The National Federation of Independent Business' monthly index fell 5.5 points to 95.9. The read is below the NFIB's historical average of 98, as fewer small businesses expect sales to pick up or for the economy to improve in the next six months. In addition, there's lingering uncertainty for small business owners in the new year.
"Concern about economic policy in the new administration and the increased spread of Covid-19 that is leading to renewed government mandated business closures have owners pessimistic about future conditions over the first half of 2021," said chief economist William Dunkelberg.