Joe Biden’s Proposals to Set Up Support for Deserving Small Businesses

Here’s what Joe Biden thinks we should do:

  1. Establish a True Small Business Fund: Congressional Democrats secured a set-aside of $60 billion in funds for smaller lenders and community-based financial institutions, which are frequently best positioned to get resources into the hands of deserving small businesses in vulnerable communities.  Joe Biden is calling on the Trump administration to go even further as it implements the PPP.  The Trump administration should reserve fully half of all the new PPP funds for small businesses with 50 employees or less, so the bigger and more sophisticated aren’t able to win in a first-come, first-served race. We should make sure we serve the mom-and-pop shops — beauty salons, barbershops, diners, local auto body shops. Back on April 3, Joe Biden asked the administration to “produce a weekly dashboard to show which small businesses are accessing loans – to make sure that the program isn’t leaving out communities, minority- and women-owned businesses, or the smallest businesses.” They have not done so. It is unacceptable to have a small-business program that is leaving minority business owners out in the cold, or that firms with fewer than 20 employees received only about 20% of the money – even though they make up about one third of payroll. Small non-profits—including churches, mosques, and synagogues— should also be eligible for this fund. The Trump administration can do this if it makes it a priority.  The country will be watching.
  2. No Unjust Enrichment: Keep Well-Off Business Owners from Using Any Program to Unjustly Enrich Themselves: Our emergency programs should be designed to keep small business owners and their workers whole during the crisis – not to make well-off business owners better off than they would be with no crisis. Unfortunately, there is a very real risk of high-paid business owners suffering little revenue harm seeking to have loans forgiven that are for more than the losses they have suffered. This is just wrong. Joe Biden would expedite loans with less unnecessary paperwork to hard-hit businesses, and never punish firms or banks for good-faith mistakes. But Biden would also make clear that no business owner should be receiving more than their lost revenue – and that there should be heightened scrutiny of certain types of small businesses – consulting, accounting, legal, tax advice, hedge funds – and where owners and executives are making above $500,000.  He is calling on the Trump administration to embrace this approach in implementing the next round of funding.
  3. Make Sure That the Program’s Terms Actually Help Small Businesses. Joe Biden would also support further rule changes to the PPP that would ensure deserving small businesses get all the help they need for as long as they need, including:
  • Providing a guarantee that every qualifying small business will get relief, rather than capping the fund in a way that forces small firms to compete against one another.
  • Authorizing more generous loans that allow for small businesses in need to both keep workers on payroll and cover fixed costs for the duration of the crisis. It’s no use paying for payroll if a small business can’t keep the lights on.
  • Extending the eight-week limitation so that payroll forgiveness continues for the duration of the crisis (in early April, Biden called upon the administration to “immediately re-engage Congress to allow for small business loans that can keep people on the payroll for far longer than eight weeks”), and there should be flexibility to allow businesses to decide when the covered period begins.
  • Establishing look-back audit mechanisms to police against abuse based on a review of net business income.