There is no doubt that the economy is a defining talking point in an election year, however the true surprise comes from the volatile state of the U.S. economy and how fast we got here. Companies both large and small saw a year primed for growth turn into a tsunami of challenges. The widespread COVID-19 shutdowns in March put a strain on even the most financially stable companies. With many places closed or at limited capacity it fell on the government to extend a helping hand. The aid took the form of Payment Protection Program (PPP) loans that was part of the CARES Act and the results for business owners were mixed. Discussions of a second round of loan money have been put on ice recently and they are unlikely to resume until after the election.

The policymakers elected on Nov.3 will be critical in developing a new stimulus plan and they will have to learn from the missteps of the first PPP loan to aid America’s businesses. The PPP loan sent out this year was an immediate response to the downturn of the economy and it was meant to support small businesses that were suffering. The loan forgiveness parameters were designed to curb unemployment and they were even extended to allow more companies to keep their employees paid. The loan also provided for landlord payments to help businesses keep their physical locations running. Most Americans might consider a small business to be a restaurant chain with a few locations or a neighborhood salon, but larger companies were able to qualify as well. Restaurant chains like Ruth’s Chris Steak House and Shake Shack along with companies like the Los Angeles Lakers basketball organization took out loans from the program. This caused significant backlash, especially from small businesses that could not qualify for the money and felt like the system was being exploited. The issues were compounded further by the complicated application process which favored large corporations that have dedicated financial teams. The loans also had to be acquired through a lender which inundated banks with requests. Unfortunately, lenders prioritized companies they already had accounts with which were disproportionately the large corporations. Many of the major chains actually returned the money once their loan became public and in the odd situation of Potbelly Corporation, they returned the money only to take it out again later.

The companies that did receive the funding were able to pay employees and rent, however it wasn’t enough to cover other expenses like vendor purchases that are essential to operations. In many cases the money was insufficient and lengthy lockdowns prevented some from fully reopening. When a company did reopen their doors, the relief bill did not provide for an adjustment period to return to business. Talks about a second round of loans have been ongoing in recent weeks, although both political parties seemed to have hit an impasse when it came to specifics. The chances of another stimulus have been put on hold earlier this week as President Trump announced negotiations will not resume until after the election.

When a new relief bill is finalized it will be important that it provides more for small businesses than the previous iteration. The Independent Restaurant Coalition is just one of several organizations that have petitioned Congress to make changes to the CARES Act. They have requested changes like tax incentives to hire new employees and cover more losses while business returns to normal. There will also need to be more transparency with regards to who qualifies for the loans as the first round left several small businesses out while money remained in the fund.

The officials elected on November 3rd will have direct impact on what a second round of stimulus looks like. Small businesses are a major component of our economy and our communities and they want to get back to work. A second relief bill should help them regain momentum and help stabilize our economy.