Velázquez Stresses Need for Bold Action During Hearing on the State of the Small Business Economy During COVID
Washington, February 4, 2021
Washington, D.C.— Today, the House Small Business Committee under Chairwoman Nydia M. Velázquez (D-NY) held a hybrid hearing examining the small business economy’s current state amid the ongoing pandemic. This was the first full committee hearing of the 117th Congress and provided lawmakers with a comprehensive view of the reality that business owners face as the pandemic rages on. During her remarks, Chairwoman Velázquez stressed the need for additional measures to provide relief for struggling small business owners.
“As Congress continues to debate additional COVID relief for small businesses, it is clear the time to act is now. Big and bold relief is needed, and it should be targeted to the small firms and industries that need it most,” said Chairwoman Velazquez. “As we continue to vaccinate more and more Americans, we move closer to the end of this crisis. But we are not there yet. Until that happens, small businesses will struggle to return to pre-pandemic performance, and will need our support.”
Between February to April of 2020, COVID-19 dropped the number of active business owners in the United States by 22%. The effects of the pandemic were especially harsh on minority and underserved business owners. Black businesses suffered a 41% decline. Latino businesses saw a 32% decline, and Asian-American owned businesses dropped by 26%. At the hearing, witnesses testified on how their businesses have fared during the pandemic and steps Congress can take to get more relief to neglected businesses. Members also examined the efficacy of existing relief efforts like the Paycheck Protection Program and Economic Injury Disaster Loan program and how Congress can improve them to better meet entrepreneurs' needs.
“We need to reverse the negative impacts of the pandemic on minority-owned businesses. These losses are problematic for broader racial inequality because of the importance of small businesses for local job creation, economic advancement, and longer-term wealth gaps,” said Dr. Robert W. Fairlie, Professor at the University of California, Santa Cruz. “Losses from the pandemic are also very costly to total U.S. productivity as minority-owned businesses represent the fastest growing segment of the business population.”
“Cash reserve and short-term liquidity is paramount for all small businesses, but the challenges are more acute for the most vulnerable ones,” said Sharon Pinder, President and CEO at the Capital Region Minority Supplier Development Council. “Immediate relief in the form of grants, loans, subsidized access to legal advice, professional assistance to negotiate with creditors or landlords, and free-advertising credits could help minority-owned small businesses respond to the pandemic and protect their employees.”
“The most important thing that we needed to figure out was how to stay afloat without taking on too much debt. Given the scale of our losses and the reduced film slate for 2020 and 2021, taking on more debt will impact our ability to recover,” said Stephen Schoaps, Owner of Strother Cinema in Seminole, OK. “That’s why businesses like ours are especially in need of and grateful for grant programs provided by Congress and the SBA.”