Statement of the Hon. Nydia M. Velazquez on Long-Lasting Solutions for a Small Business Recovery
Washington, July 15, 2020
Since February, the outbreak of COVID-19 has taken a significant toll on the entire U.S. economy. This crisis has hit America’s small businesses especially hard. Three-out-of-four small businesses have been experiencing a decrease in revenue since March. And an estimated 7.5 million small businesses are at risk of permanent closure as a result of this crisis.
As members of this Committee and as legislators at the federal level, we have a responsibility to secure funds to help America’s small businesses survive this crisis. So far, Congress has allocated over $669 billion in grants and loans through the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan Program, also known as EIDL (pronounced IDLE) and a new EIDL emergency grant program.
From the onset, Congress intended for the PPP and EIDL programs to provide immediate relief for small businesses to withstand the initial economic shock caused by the pandemic.
So, we must be prepared with long-term solutions that will meet the magnitude of this crisis as we push forward to heal as a nation and find better days ahead.
We can start by examining the policies adopted during and in the aftermath of the Great Recession as a model moving forward. While we must recognize the inherent differences in these two devastating events for our nation, we also must remember that back in 2008, the outlook for small businesses was similarly uncertain.
In response to the Great Recession, Congress stepped in and passed a series of bills that provided $1.2 billion for small businesses through SBA lending programs.
This critical step unlocked tens of billions of dollars in guaranteed loans to small businesses that could not otherwise access capital when traditional credit markets froze.
Policies enacted then proved to be a critical lifeline for thousands of small businesses in danger of shuttering their doors.
At the same time, the Obama Administration focused on how small businesses could help contribute to America’s recovery by accelerating entrepreneurship and unlocking capital for the nation’s smallest and youngest businesses.
This money was well-spent, as small businesses were some of the largest contributors to job growth in the recovery—especially minority-owned and women-owned small businesses—who alone were responsible for the addition of 1.8 million jobs from 2007 to 2012.
The nation’s investment in entrepreneurship paid off, as the United States saw more than 550,000 new businesses open since 2011, and the economy continued to grow.
Because of the hopeful outlook built by post-Recession era small business policy, it is worth the Committee’s time to explore those proposals, why they worked, and how we can fine-tune them for the COVID-19 era.
I also welcome a discussion of any new ideas brought to the table by Members to address the challenges our small businesses are facing today.
Whether it is utilizing traditional SBA programs or instituting innovative ideas, long-term recovery requires us to think outside the box but also come together in a bipartisan fashion to provide relief to small employers.
As Congress works to explore additional ways to help America reopen and recover, I would hope that we would continue to prioritize the smallest of small businesses, the minority-owned and women-owned businesses—the ones that helped to rebuild our nation the last time we found ourselves knee deep in what felt like an insurmountable crisis.