Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small Business News Highlights for August 4:
- PPP loans increased small business survivability by as much as 30%, study finds
- RESTART Act gaining traction, possible part of Republican Senate package
- Do consumers care if your brand stands for racial justice?
PPP loans increased small business survivability
“The results are consistent with our main analysis, suggesting that PPP funding ultimately led to fewer businesses closing.”
For all the bad press leveled against the Paycheck Protection Program (PPP), a new paper by the National Bureau of Economic Research found that the program did make a difference in how small businesses have weathered the economic downturn caused by the pandemic.
The study focused on the first round of funding, which ran out in less than 2 weeks, and found that receiving a loan at this stage increased a small business’s chance of survival anywhere from 14% to 30%.
The second round of funding was approved in April and has yet to exhaust the $310 billion allocated by Congress.
RESTART Act gaining traction
“I believe that something like the RESTART Act will ultimately be included in our package, perhaps as soon as this week.”
As Washington, D.C. politicians continue to debate the next round of economic stimulus measures, they’re considering how best to continue supporting small businesses, including a bipartisan piece of legislation called the RESTART Act.
Touted by Senators Bennet and Young, the legislation would create a longer-term program for federally-funded low rate loans for businesses with up to 50,000 employees.
The program would target businesses that have been hardest hit by the pandemic and offer loan forgiveness based on the amount of lost revenue. The program would also allow businesses to use the money for purposes beyond payroll without being penalized.
Do consumers care if your brand stands for racial justice?
“The most authentic brand actions are ones that proactively advocate societally-oriented, anti-racist actions. These are actions that come with some risk, but they are also most likely to be rewarded with real consumer loyalty.”
As businesses examine their values and mission statements in light of the national conversation about systemic racism and bias against Black and other people of color, there’s the risk that some businesses’s actions are merely performative. Other organizations wonder how standing up for a social issue will impact their revenue, brand reputation and customer loyalty.
Research indicates that Millennial and Generation Z consumers are particularly concerned with brand authenticity, that they want corporations to stand for social issues in authentic ways, and that they will support companies that engage and support social issues.