Biden’s plan for Philly’s Latinx small businesses could bring crucial aid after COVID-19
Such courting of the Latinx vote has never been seen before in a presidential election — from both parties.
The nation is not yet in the aftermath of COVID-19, but it’s already been made clear who has suffered the brunt of the repercussions from our leaders’ inaction.
Whether parties will acknowledge it or not, Latinx small businesses and entrepreneurs are a core part of the United States economy.
Philadelphia’s own poverty rate among Latinx Philadelphians is at a staggering 38%. The pandemic further exacerbated racial inequity in the business community and forced Latino and minority businesses to close at alarming rates, threatening over 11,000 Hispanic businesses in the city.
As of June, one in 10 Latinx businesses remains closed.
Before the pandemic hit, revenue growth of Latinx-owned companies was up 10%, but this has seen a steady decline.
Even more alarming is, of those Latinx companies that applied for Paycheck Protection Program (PPP) funding, their costs have risen higher than their revenues in the months since.
“Latino businesses currently are spending more than they are bringing in, and their costs are higher than during the pre-COVID period. Meanwhile, sales are still down,” said Biz2Credit CEO Rohit Arora.
Biz2Credit recently released its Latino owned Business Study for 2020, which found that the sales of Latinx-owned businesses have witnessed a 21% drop from Sept. 2019 to Sept. 2020.
“If they remain cash flow negative, the future could be grim – especially if Washington delays passing a new stimulus package to keep the economy going,” Arora continued.
In response, Democratic presidential nominee Joe Biden has issued a “restart package” to provide small business owners support for retaining and rehiring workers, as well as for fixed costs — including PPE equipment.
Biden has also called for an immediate overhaul of the Paycheck Protection Program to help Black and Latinx owned businesses obtain relief. Biden has also called for flexible grants for small businesses that have lost considerable revenue.
Specifically for Latinos, Biden has pledged over $50 billion in public-private venture capital to Latino entrepreneurs and other entrepreneurs of color. He has also promised to expand access to $100 billion in low-interest business loans by funding state, local, tribal, and non-profit lending programs in Latino communities and other communities of color.
One of the highlights of Biden’s plan is to make a historic $400 billion procurement effort to support small businesses and directly tackle long-standing inequities in the federal contracting system, according to a statement issued by the Biden-Harris campaign.
The statement says Biden will ensure the process “finally mirrors the demographics of this country,” adding he will triple the federal goal for contracting with small, disadvantaged businesses.
He will triple the federal goal for contracting with small disadvantaged businesses (SDBs), which includes Latino small businesses, from 5% to a minimum of 15% of all procurement dollars by 2025.
To achieve this, Biden says he will expand long-term technical assistance and federal contracting preferences for small, disadvantaged businesses by increasing subcontracting opportunities, and incentivizing state and local governments, and private sector partners to contract with such businesses.
The Biden-Harris campaign, specifically, has demonstrated its keenness on appealing to the Latinx vote, especially in the months leading up to the General Election. Over the Summer, Biden released his plan for the Latino Community, which is now in addition to this small-business recovery plan.
Just a month later, Biden issued a recovery plan for Puerto Rico. Apart from being historic, the plan demonstrated his campaign’s knowledge that, at least in terms of Puerto Rico, Biden doesn’t view the entire Latinx demographic as a monolith.
It’s a lot of promises, but if they go into effect in a Biden-Harris administration, they will make a tremendous impact for Latinx businesses and entrepreneurs, especially in the wake of COVID-19.