An Open Letter to President Trump and Federal Reserve Chairman Jerome Powell on Behalf of America’s Small Businesses

By Sergio Retamal, CEO of Global4PL

According to the U.S. Small Business Administration, there are 30.7 million small businesses in the U.S., which employ 47.3 percent of the private workforce. Together, small- and medium-sized businesses (SMBs) are the economic engine of our country. Yet, they have been left out of the latest government bailout initiated as a response to the Covid-19 pandemic. Simply put, the risk of massive layoffs and bankruptcy in this sector would be devastating to the millions of people employed in this sector as well as the U.S. itself. The wealth imbalance will deepen and the overall economic stability of the country will be jeopardized.

Larger companies have access to credit lines and other sources of credit. However, SMBs don’t have similar access to credit, and if they do, access will not be immediate enough to survive this current crisis. Moreover, the credit that is available in the marketplace comes at loan shark rates.

The federal government should provide an immediate credit line to SMBs. Business owners in this sector are willing to assume credit risks to mitigate or prevent layoffs and bankruptcies. We need immediate Red Tape Free access to loans.

Additionally, the federal government can quickly establish a program that helps SMBs access credit lines based upon their Account Receivables, thereby offering an alternative to the private market option with its ridiculously high rates that border on predatory.

The airline, cruise, and oil industries are among those that will receive bailout packages to help them survive, which I support. Other industries have lobbyists and considerable influence at the federal level. Meanwhile, SMBs are increasingly vulnerable in the midst of this crisis not only because they are essentially left to fend for themselves, but also because the severity, timeline, and ultimate impact of the Covid-19 outbreak are unknown.

What I do know is that SMBs are the backbone of America’s workforce and economy. The federal government’s role and responsibility is to take action now to protect the millions of workers and small business owners who are critical in helping the U.S. respond to this crisis.