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 October 30:
- Federal Reserve lowers threshold for small business loans
- Asian-American owned businesses attacked by COVID-fueled racism
- Navy announces record-breaking number of small businesses selected for contracts
Threshold lowered for small business loans
“If you look at the law … it’s very clear that we are to make loans only to solvent borrowers. Having said that, we’re continuing to work to improve Main Street, to make it more broadly available — make it pretty much to any company that needs it and that can service a loan.”
The Federal Reserve announced that it’s lowered its threshold for borrowers in an attempt to provide more small businesses with the financial support they need to weather the ongoing COVID-19 pandemic.
The Fed will lower the loan amount cutoff for its Main Street Lending Program from $250,000 to $100,000, while also changing the restrictions around how much debt a company can carry and still be eligible.
Unlike the Paycheck Protection Program (PPP) loans, the Main Street Lending program requires that the money be repaid, although it does allow deferment to give businesses time to recover.
COVID-fueled racism hurting Asian American businesses
“Communities who have limited English-speaking skills are largely left out of a lot of the resources or are usually the last to know — or know too late — about support services or of assistance.”
Small businesses owned by Asian Americans have been uniquely impacted by the COVID-19 pandemic, as the damage wrought by lockdowns and the economic downturn have been further exacerbated by racist actions and harmful stereotypes.
Businesses in LA’s Koreatown and other areas with high concentrations of Asians experienced the economic fallout of the pandemic at least a month before the rest of the country, as the media and White House portrayed the virus as specifically linked to China or Chinese people and therefore — in the minds of many — all Asians by extension.
Additionally, Asian American business owners have historically been disenfranchised and faced significant barriers to accessing resources, further complicating their ability to receive economic assistance.
Navy selecting small businesses for contracts — new record
“Over $17 billion directly to small businesses as a prime. We not only met our kind of demanding goals but exceeded them, not only at the overall level but in sub-categories.”
The Department of the Navy announced that it’s set a new record for the amount of contracts awarded to small businesses. The goal for FY 2020 was to award 15.61% of prime contracts to small businesses and the Navy surpassed that target, awarding 16.46% of prime contracts valuing nearly $17.33 billion to small businesses.
Small business participation has grown through the Small Business Innovation Research program at the Office of Naval Research.