How COVID ‘Rescue’ Funds Are Mowing Down American Small Businesses

Via the American Rescue Plan, Joe Biden and the current U.S. Congress are re-ordering the small business economy in America in a way they may not have thought through, and the consequences will reverberate throughout the economy for years to come.

Washington is about to replace most of the lost revenue of small businesses in a few select industries while leaving nearly all other small businesses hung out to dry. If you run a local movie theater, a live music venue, or a restaurant, you will be given a grant from Uncle Sam to help you build back after COVID-19. Yet hair and nail salons, independent bookstores, travel companies, junk haulers, business brokers, and countless other businesses are on their own.

The new Restaurant Revitalization Fund will replace a restaurant’s 2019 gross revenue in full — up to $10 million per business. There are, yes, a few caveats for affected owners to be aware of. . .

The Shuttered Venue Operators Grant will replace 45 percent of a live performance venue’s gross 2019 revenue largely without the caveats above. This grant is for live music halls, movie theaters, museums, talent agents, and other types of live art presenters and promoters. Again, it’s a potential godsend for many of these folks.

Yet while these programs are essential, they are incredibly unfair to the rest of America’s millions of small businesses. For those not covered by those two programs, what’s being offered are loans that must be paid back with a lower limit than the gross income metric and slow underwriting — that is, if a business even has the savvy to get in on the Economic Injury Disaster Loan program. (Read more from “How COVID ‘Rescue’ Funds Are Mowing Down American Small Businesses” HERE)

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