Richmond leads discussion plans to save and nurture entrepreneurial ventures
22nd March 2021 · 0 Comments
By Ryan Whirty
Contributing Writer
Representatives from the Biden administration recently briefed small business leaders from across the country about the details of the plan aimed at saving and nurturing such entrepreneurial ventures.
On Feb. 24, former U.S. Rep. Cedric Richmond, D-La., who is now serving as a senior advisor to the president and as the director of the White House Office of Public Engagement, was joined by Bharat Ramamurti, the deputy director of the National Economic Council, on a conference call and a Q&A with businessmen and women hoping to possibly take advantage of some of the key provisions of the American Rescue Plan Act (ARPA).
The event was sponsored by Small Business for America’s Future, a national organization dedicated to supporting, promoting and advocating for small businesses and their unique needs. The conference call was part of SBAF’s ongoing series of briefings with various Biden administration officials for economic, climate and health-care positions.
“I want to reiterate how important the American Rescue Plan is to the economy and the country,” Richmond told small business proprietors. “It is important, it is bipartisan, it has strong support from Republicans and Democrats, and it’s overwhelming support.”
In opening remarks, Richmond highlighted some of the facets of the ARPA that are aimed at small businesses that are on the brink of folding as a result of the massive negative economic and medical impacts of the COVID-19 pandemic that has been raging for more than a year.
He said that in crafting the act, Biden administration members conferred with many citizens and businesspeople to find out the country’s primary economic needs and carefully construct a finely tuned, focused relief proposal that benefits as many struggling Americans as possible.
“We didn’t just pick $1.9 trillion in money out of the clean air,” Richmond said. “We looked at every component of the economy and of people’s lives, where COVID is wreaking havoc, and then we set to figuring out a solution to each and every problem.”
Richmond remarked on the substantial role small businesses play in American society.
“Small businesses are the backbone of this country, and small businesses rely very heavily on the communities that they serve,” he said. “If communities are hurting, small business is hurting, and we can’t get back to full employment and get the economy going without helping our small businesses.”
Richmond decried the partisan bickering in Washington that has been tripping up passage of the ARPA, with Republicans concerned about the total price tag, the increasing of the minimum wage to $15 and other of the costlier aspects of the act, and Democrats pressing for comprehensive, far-reaching economic relief.
Richmond said officials from both parties at every level of government, from small-town mayors to leaders of state legislatures, support the ARPA, while those on Capitol Hill continue to butt heads. He encouraged the small business owners taking part in the conference call to press their political leaders to adopt the bill.
“It is bipartisan everywhere except in the halls of Congress,” he said, “so to the extent that you can help us with that, we absolutely want this bill to have Democratic support and to have Republican support.”
Ramamurti echoed Richmond’s comments, saying that over the last three months, economic growth and job creation has stalled, leaving the country still 10 million jobs short of pre-pandemic employment levels. He said analysts have predicted that the ARPA would cut that gap down by seven million.
But beyond employment percentages, Ramamurti said small businesses have been particularly hard hit by the pandemic-induced economic crisis, with about 400,000 of them shutting down after the last year.
“Those are 400,000 businesses that people have put their hearts and souls into, the backbone of the communities they operate in, and we want to make sure we stop as many of those closures going forward, and we give opportunities for people who may have lost that first small business to come back and build a new business going forward.”
To that end, Ramamurti said facets of the ARPA are targeted toward supporting and rescuing small businesses in vulnerable and underserved communities. He said $15 billion of the $1.9 trillion will go toward “grants directly to the hardest-hit companies in low- and moderate-income communities.” It’s those business ventures, he said, who have been left out of previous pandemic relief efforts, “and they need particular support.”
Ramamurti added that other targeted aspects of the ARPA include $25 billion for bars and restaurants; additional money and administrative changes to the Paycheck Protection Program loan service, which has often proved inefficient and insufficiently supportive of the small businesses that most need it; a $10-billion “down payment” for the Small Business Opportunity Fund.
He said the PPP will now be more user-friendly, more available to businesspeople in Black, minority and low-income communities, and will provide such entrepreneurs better opportunities to connect and work with banks, lenders and the Small Business Administration. In addition, unlike previous relief acts, citizens with felony convictions who have served their sentences will be eligible for aid.
“There are some really important disparities in how the previous rounds of relief have gone out into the community,” Ramamurti said. “The design of those relief efforts was systematically providing less relief to Black and minority-owned businesses in general.”
Ramamurti added that the ARPA more greatly benefits sole proprietorships – which make up 95 percent of the country’s Black-owned businesses – than previous rounds of pandemic relief, giving more assistance to one-person businesses like independent contractors, cleaning services and online retailers.
“There has been a lot of emphasis on equity in this administration,” he said. “Right after [Biden] was elected, he basically said that there’s four pillars of what he wants to do, and one of them is about racial equity and addressing some of the systemic issues that the country has struggled with for a very long time. You see a lot of that in how small business relief has been administered before.”
For example, he noted that the current system of financial lending favors businesses that have a pre-existing relationship with a financial lender or other loan source, but the rates of such existing relationships among Black-owned small businesses are much smaller than other demographic categories.
As a result, minority-owned businesses found themselves on the outside looking in to an earlier PPP program that wasn’t conducive to benefitting them. In addition, those minority-run businesses that were unfairly excluded from previous rounds of PPP support now are behind the 8-ball struggling to even catch up with the growth of other businesses.
“We’re trying to be aware of that and to make sure that relief is distributed equitably this time around,” Ramamurti said. “But it is important to note that even by doing it equitably this time around isn’t going to be good enough because we have to actually make up for how inequitable it was last year.”
This article originally published in the March 22, 2021 print edition of The Louisiana Weekly newspaper.
