What is Joe Biden’s Small Business Plan?
February 18, 2022 | Last Updated on: July 27, 2022
February 18, 2022 | Last Updated on: July 27, 2022
In this article we’ll discuss:
Just over a year into the Biden Administration, Americans are applying to start new small businesses at a record rate, up more than 30% since before the pandemic. Coming on what is hopefully the tail end of a global pandemic, many of these new small business owners may be wondering: What is Joe Biden’s small business plan, and how will policies help or hinder growth?
In this article, we’ll look at some of the main issues the Biden plan tries to address, as well as the challenges that the administration faces.
The Biden Administration has been working to address the difficult issues faced by American small businesses since the earliest days of Bidenâ€™s term as President.
In fact, Biden’s small business plan was first laid out during his campaign, and offered relief to companies through the following five channels:
Clearly, the goal of these proposals was to ensure the survival and continuity of small businesses during the COVID-19 pandemic as state, local, and federally mandated health restrictions affected operations.
After winning the election against Donald Trump, the Biden administration rolled most of these proposals into the American Rescue Plan.
The American Rescue Plan of 2021 was signed into law by President Joe Biden in March of 2021 and has been noted as one of the first major legislative accomplishments of the Biden Administration. The plan was designed to help members of American communities, reduce the costs of health care, and featured initiatives specifically applicable to small businesses.
The American Rescue Plan Act provided relief for small businesses and focused on American industries that were hit the hardest by the pandemic. The plan made available additional funds for PPP loans, the Shuttered Venue Operators Grant program, and EIDL payments. The American Rescue Plan additionally added funding for grants through the Restaurant Revitalization Find and the Community Navigator pilot program.
One year after the American Rescue Plan was launched, at the end of January 2022, Bidenâ€™s office released a statement addressing those efforts and crediting the President with distributing more than $400 billion in relief to more than 6 million small businesses. The statement went on to state that the Biden Administration would continue to help small businesses grow.
This growth would be encouraged by providing access to low-cost loans and investments for small businesses. The Treasury Department, along with Tribal governments, are working to increase small business lending and investments as a part of the State Small Business Credit Initiative (SSBCI), which stemmed from the American Rescue Plan. The White House said, â€śBy this summer, the first wave of programs will launch, unlocking billions of dollars in new lending and investment capital for small businesses in big cities and small towns all across America.â€ť The initiative will also make it possible for small business owners to continue to access SBA 7(a) 504 and microloan programs.
President Biden is also assisting entrepreneurs by providing access to federal contracts. In 2021, the Biden-Harris Administration announced a strategy to increase the federal procurement money for socially disadvantaged businesses. The Bipartisan Infrastructure Law, passed last year, gave direction to the Department of Transportation (DOT) to award more than $37 billion in federal contracting to small business owners. The law also offers relief to small businesses through access to reliable high-speed internet provided by $65 billion in broadband infrastructure.
Small businesses can also receive diverse support through the Community Navigator Program, which was launched during the first year of Joe Bidenâ€™s presidency. Another partnership launched by the SBA and the federal government, the Small Business Digital Alliance, is providing small business owners with technical assistance and resources for e-commerce businesses.
While the above illustrates a strong focus on small businesses for the executive branch, Congress has also been working on ways to protect and encourage small business growth through the Heroes Act.
In May 2020, Congress introduced the Heroes Act and announced a $3 trillion legislation to protect Americans and small business owners. The Heroes Act was passed to support the countryâ€™s essential workers by providing hazard pay. The Heroes Act also described additional economic impact payments to Americans, enhancing paycheck protection plans, and extending unemployment benefits.
For small businesses, the Heroes Act listed specific benefits, including a stronger PPP that would reach more small business owners and new benefits for nonprofits from the federal reserve.
The Heroes Act defined flexible responses for small businesses with $10 billion of emergency grants through the Economic Injury Disaster Loan program.
While the Act was passed by the Democrats in the U.S. House on May 12, 2020, it was not accepted as quickly by the Senate. It was criticized by Senate leaders and the package did not receive any votes during the months it stayed in the Republican-controlled Senate. By December 2020, the Heroes Act was revised into what became the Consolidated Appropriations Act, 2021.
Despite some progress for small businesses, both Joe Biden and Vice President Kamala Harris have had fluctuating approval ratings in the polls, both among the general population and among small business owners. The Zogby Poll reported in February 2022, that the Presidentâ€™s overall approval ratings were underwater at just 44%, which is a 13% drop over the 57% approval rating earned by the President in earlier days. Kamala Harris has a similar approval rating of just 43%, showing a significant decrease in voter approval.
CNBC also reported on results of their fourth quarter CNBC Momentive Small Business Survey. In the reports from the November 2021 survey, they reported:
Inflation continues to be a growing concern for small businesses and startups in 2022. Driving inflation is the constant rising prices. Small businesses are often B2C operations that are also consumers themselves. Small business owners and partnerships are facing increased costs of materials and supplies and struggling to pass on enough of the increase to their customers without risking lost business, while, at the same time, fighting corporations that have access to much greater resources.
According to a survey conducted by the National Federation of Independent Business (NFIB) in December 2021, the number of small business owners reporting price raises is the highest theyâ€™ve been in almost 50 years. In February 2022, the NFIB had reported that 33% of small business owners were optimistic about better business conditions over the next six months and that almost half of small businesses had job openings that could not be filled.
The Biden Administration is responding to inflation, although some small business owners wonder if it is too little, too late. On January 3, 2022, the White House announced that Biden planned to allocate $1 billion of the American Rescue Plan funds to promote a more competitive meat and poultry industry. The funds were specifically dedicated to expanding independent processing capacity. Joe Biden more recently has shifted his focus away from inflation to focus on issues including domestic manufacturing, union jobs, and fair wages.
Contributing to inflation and creating a whole new host of problems is the supply chain problems. The supply chain was disrupted by ongoing tariffs between China and the U.S. and then amplified by Coronavirus. While Covid-19 was an unprecedented global crisis, the shipping industry was not equipped to handle the impact. The raw materials and supplies that small business owners depend on to operate were suddenly unavailable due to distribution bottlenecks and production disruptions.
Congress and President Biden responded to the supply chain crisis by working with industry leaders to create unique solutions. Although many small businesses felt they were not considered in the accommodations.
In November, Biden met with executives of major retailers and shipping companies, offering assistance to the supply chain disruptions. Great progress was made for large retailers to begin to work with port authorities to expedite shipping. However, small and medium-size businesses donâ€™t share the resources of large corporations and feared they would not benefit from the progress made by Biden and the shipping companies.
About half of small businesses reported having inventory shortages and business disruptions stemming from supply chain issues. 50% of foodservice and hospitality businesses admitted feeling pressure from the supply crisis.
The Biden Administration inherited a whole host of problems that are impacting American small businesses on account of the COVID-19 pandemic. While there are plans in place to address them, some small business owners feel uncertain about the future. At the same time, entrepreneurship is on the rise, and many people are examining their career goals and realizing that they would rather work for themselves. In times of disruption like this, it’s important to have sources of information and capital that can be accessed as the needs arise.
Biz2Credit can help your small business take the next step towards growth, despite an ever-changing economic situation.