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Money to Keep Small Businesses Alive: Legislative Watch

Hundreds of thousands of small businesses have closed because of the pandemic. A surge in new cases and unresolved election results are casting shadows on their year-end prospects, but recent bills offer help.

Alex Hernandez, owner of a bar in Long Beach, Calif., that could be closing at the end of the year because of the coronavirus pandemic. (Luis Sinco/Los Angeles Times/TNS)
These are tough times for the nation's small businesses. Nearly 100,000 that were “temporarily closed” early in the pandemic have now shut their doors permanently, according to a Yelp Economic Impact Report.

A recent Goldman Sachs survey of small business owners found that 34 percent still in operation are not sure if their business will survive, with six percent expecting they will be forced out of business. The National Federation of Independent Businesses has said that one in five small businesses expect to lay off workers in the next six months.

The current surge of COVID cases was predicted last spring, and the fact that it has materialized during a period when businesses could be making up for lost revenue doesn’t help. Uncertainty about the election outcome, another stressor, should be laid to rest, said Fred Knapp Jr., CEO of the South Carolina Small Business Chamber of Commerce and co-chair of Small Business for America’s Future.

“Biden won fair and square and it’s time for President Trump to concede so the country can move on,” he told local reporters, urging the president-elect to “begin laying the groundwork for policies that will help small businesses survive the pandemic and thrive in the future.” 

In fact, Biden has announced plans to provide recovery aid for small businesses on his transition website. It will be months at best before these plans come to life, and, in the meantime, states are doing what they can.

Here are examples of some of the strategies included in dozens of bills introduced since October 2020, with links to the complete text.

SCR601 in South Dakota allocates $400 million in unspent and unobligated federal COVID relief funds for a grant program to support small businesses. Businesses that have experienced at least a 25 percent reduction in revenue would be eligible for grants up to $100,000, providing they meet the criteria of the program. The measure would also create a $40 million grant program for small nonprofit businesses and a $10 million small business start-up grant fund.

New Jersey S2983 would create a grant program to assist suburban and rural small businesses with rent payments during the COVID-19 pandemic. It notes that earlier allocations of CARES Act funds for this purpose had only been available to small businesses in urban municipalities, and asks for $6 million to be set aside to help those in rural and suburban areas of the state. Grants are not to exceed $10,000.

S2937 in Massachusetts establishes the state’s Supplier Diversity Office (SDO) as an independent agency to improve its ability to support small businesses, including those owned by minorities, women, disabled veterans or LGBTQ individuals. Among other mandates, the SDO is ordered to increase the diversity of businesses participating in state agency contracts for goods and services, including building and facility projects. It is to develop a certification process for these businesses, maintain a directory, and to notify them of public- and private-sector programs and services available to them.

District of Columbia B23-0980 extends the district’s public health emergency through Dec. 31, 2020. and reaffirms its commitment to extending and enforcing public health standards for workplace and employee protection. It calls for the mayor to be authorized to make grants to help small businesses purchase PPE for their employees, or to be reimbursed for such purchases.

New York S9088, the “Save Our Stores Act,” would void fines or monetary civil penalties assessed small businesses during the COVID-19 pandemic. This would apply to any business that employs fewer than 100 persons. Certain violations would not be included in this waiver, including those with the potential to cause damage to natural resources, tax fraud and human rights violations, among others. 

SF12, in Minnesota, addresses the plight of remote small recreational businesses in the state that are only accessible by land through Canada, and who have lost revenue due to COVID-related travel restrictions that Canada has implemented. It would allow businesses whose March 1-Sept. 7 revenue was greater than 50 percent lower than during the same period in 2019 to receive forgivable loans in amounts up to $500,000.

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Carl Smith is a senior staff writer for Governing and covers a broad range of issues affecting states and localities. He can be reached at or on Twitter at @governingwriter.
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