What many small businesses need from Biden to survive and recover from the Covid crisis


The billions of federal dollars that has been Where could be aimed at helping small businesses survive the Covid pandemic may provide the help some businesses need, but not enough for others. Unfortunately, businesses and organizations that get through this worsening coronavirus crisis will then be faced with another challenge: try to recover and put the crisis behind them as soon as possible.

Double edged sword

For some small business owners, the financial assistance they have received from the government can be both a blessing and a burden.

Carrie Jeroslow owns the Elkin Creek Vineyard in North Carolina. “We have been hit hard by the pandemic because a large part of our business structure is based on weddings and events,” she recalled. Although they received a loan from the Small Business Administration which helped them stay afloat, “… we now have a very large loan that needs to be paid back.” I think this will greatly affect our ability to recover from the past year.

She thinks that “… Biden should cancel these loans, if not the full amount, part. As it is, we will be paying off this loan for many years to come while trying to rebuild our business into the thriving destination it once was.

More help needed

According to a December investigation by the United States Chamber of Commerce, “Most small businesses see the need for additional government support to help them get through the negative impact of the pandemic. A majority (56%) disagree that they have all the support they need from the federal government for their business to be successful.

For some companies, recovering from Covid-19 could be even more difficult given their vulnerability. In a Research study conducted last month by the Small Business Administration nonprofit SCORE association, 48% of business owners said they were unprofitable in 2020 (up from 25% the year before); 68 percent had to reduce employee hours / wages or time off or permanently lay off workers.

Loan payments

The need to repay government loans can take a heavy toll on the minds and finances of business owners. But there are ways for the government to lighten or lighten the burden.

Different schedule

Patrick Hardy is CEO of Hytropy, a small disaster management company. He noted, “Small businesses operate on a very different income schedule than their larger counterparts. Recovery times have lagged behind and will continue to do so in proportion to vaccine rollout, as vaccination rates will likely dictate reopening for hospitality businesses and others. [industries] requiring significant interpersonal contact with clients.

“Paying off existing loans will be a big question mark in the first and second quarters,” he observed. “The Biden administration should immediately create an additional 6 to 12 month forbearance, which is better than delivering more P3s and reopening federal coffers.”

Forgive or reduce

“President Biden, through the SBA, should immediately institute a loan cancellation / reduction plan for all SBA-backed loans,” suggested Graciela Tiscareno-Sato, the person in charge of the creation and the editor of the Gracefully Global Group, a bilingual education and digital course company.

She said: “The six months [mortgage] abstention implemented in 2020 was a good start, proving [the government] can do it. To ease the immense burden of loan payment obligations when income disappears over the long term, I advocate for a significant and permanent reduction in our principal balance.

“Business owners need real forgiveness for our inability to generate pre-pandemic income levels [and] income stream that we used to qualify for the loan and the repayment schedule. Besides, [Biden] could order other lenders who financed small businesses in the same crisis to cancel or reduce all working capital loans. “

Extend tax deadlines

The pandemic has impacted the ability of some small business owners to pay their taxes and, in some cases, the ability of the federal government to process tax returns.

Hardy noted: “The IRS is considerably late in processing and publishing tax returns, which has created a big headache for small business owners who may not know what they owe even for their 2019 returns. For example, the office from the IRS in Fresno, Calif., at the start of the pandemic, literally sent everyone home without notice.

“This has created a massive backlog that makes it difficult for small business owners to function normally, as it takes a long period of time to process routine forms. The administration must do what is the previous one have done so and to extend the tax deadline for small business owners, ”he recommended.

More education and expertise

Small business owners may not have started their businesses knowing everything they should do to run a successful business, and getting money from the government may not solve all of their pandemic issues. Further education could give them the lasting help they need.

Octavia Conner is CEO of Say yes to profits, which provides virtual CFO services. She said: “… the current loans to small businesses will only add a band aid to the deeper financial problem that many businesses face. I think President Biden should encourage or require every business owner approved for a loan to take a financial management course.

“This course should provide strategies on how to grow their business to thrive regardless of future economic disasters and times of business downturn. The course could explain how to make the funds last longer than normal and use them to further develop the business.

“In addition, small businesses should be given a free 30-minute counseling session with a financial expert who could answer their financial management questions and possibly refer them to an accounting firm for help,” he said. Conner said.

Define new priorities

Depending on the nature and extent of a crisis, it may be necessary to prioritize who to help first and how limited resources are used. While the government can print as much money as it wants or needs, business owners shouldn’t expect Biden to give them blank checks.

Not all the same

Paul Sundin, CPA, Tax Strategist and CEO of the Eparion, said: “… the most important step this administration should take is to really identify which companies have been affected the most.

“When we talk about the crisis, we always talk about small businesses as a collective unit when the truth is not that all small businesses have felt a loss of the same magnitude. Some were able to pivot and even still make a profit and some really went down and closed.

He said: “While the administration’s proposals and plans are really promising, execution can be difficult and identifying beneficiaries, to begin with, is a complicated process that must be undertaken with utmost care. care and the utmost precision. “

An unfortunate precedent

Craig Kirsner, President of Wealth Planning Consultants Stuart Estate, said small businesses should be given priority in the Paycheck Protection Program (P3). “It was very unfortunate that the first PPP program allowed companies to receive up to $ 10 million. How does that qualify as a small business? Biden is expected to dedicate new PPP loans to companies with 50 or fewer employees, true small businesses, and allow more generous loans to allow companies to cover capital costs and personnel costs.

“In addition, they should provide federal funding to states to invest in new businesses located in areas of the country that generally do not attract large equity investments. [The government] should also place special emphasis on women and minority-owned businesses which were particularly affected during the Covid crisis, ”Kirsner said.

New tax breaks

Providing small businesses with new tax breaks now could be another way to ensure they are better prepared to bounce back from the coronavirus crisis.

Stephanie Scheller, the founder of Disruption of growth, said: “… the two best steps President Biden can take to help small businesses emerge stronger on the other side are to create small business specific tax breaks and to open doors for small businesses remain open.

“The constant fear of whether there will be enough money to pay taxes, or if everything will be closed again tomorrow, creates additional stress and anxiety while preventing small business owners from being able to plan for the future. . “

She said: “Too many small businesses don’t plan their cash flow properly and spend the money as they come in, expecting to pay taxes on the next batch of money. But with the current situation, there is no guaranteed next batch of money. I personally know businesses that have had to close because they could not afford to pay future taxes and [also] pay the rest of their bills.

The next crisis

Whatever the needs of small businesses to navigate and recover from the pandemic, they should list those needs in their crisis management plans. The sooner these needs are met, the sooner business owners will be prepared to weather the rest of this crisis and prepare for the next.


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