The good news is we are seeing signs the nation’s economy is recovering from a pandemic-caused recession.
We are seeing a decline in the number of claims for unemployment benefits. New jobs are being created. Once-stalled innovation and technology projects are moving forward. The retail and real estate sectors are opening their doors after months of state-mandated business closures to contain the spread of the deadly coronavirus.
But those tempted to shout “Mission accomplished!” are urged to be more cautious.
In a recent report to Congress, Federal Reserve Board Chairman Jerome Powell warned that the recovery is fragile. There is “significant uncertainty” regarding the pace of the U.S. economic recovery, which leaves small businesses and lower-income and minority Americans particularly at risk.
“The levels of output and employment remain far below their pre-pandemic levels and significant uncertainty remains about the timing and strength of the recovery,” Powell said in prepared remarks preceding his semiannual economic update to Congress in June. “Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely.”
So far, Congress and the president have authorized about $3 trillion of aid to businesses and workers. Another aid package is expected to be hammered out between the House and Senate beginning in July.
According to the Fed, three-fourths of the nation’s small businesses with employees applied for government assistance through the so-called Paycheck Protection Program, which Congress created in March to prevent layoffs. The program offers businesses low-interest loans that can be converted into grants if companies maintain their payrolls.
Powell has vowed also to use every tool in the Fed’s toolbox to help businesses. That includes the Fed’s new Main Street lending program, which is geared toward helping smaller firms negotiate the downturn. He warned Congress that the recovery would be at risk if federal relief is withdrawn from Americans and the nation’s small businesses at this critical time.
“The pandemic is presenting acute risks to small businesses,” Powell told Congress. “If a small- or medium-sized business becomes insolvent because the economy recovers too slowly, we lose more than just that business. These businesses are the heart of our economy and often embody the work of generations.”
The U.S. Small Business Administration is overseeing the distribution of relief funds through local banks, as well as other assistance programs. Accomplishing the goal of helping small businesses keep their staffs employed is the focus of the SBA’s partners, including the Small Business Development Center at California State University, Bakersfield.
Nearly half of America’s private-sector workers get paychecks from companies with less than 500 employees, and a third of those work for businesses with fewer than 100 workers. The SBA and its partners — the nationwide network of Small Business Development Centers, Women’s Business Centers, Veterans Business Outreach Centers and SCORE — have long nurtured this vital sector of the U.S. economy.
In these particularly trying times, the Small Business Development Center at CSU Bakersfield is helping local companies maintain access to capital by maneuvering through the red tape of loans and incentive programs.
As social distancing continues to be a necessary tool to prevent the spread of the highly contagious coronavirus, a wide range of services has been developed to counsel business owners and entrepreneurs. These free services include telephone access to experienced SBDC consultants, online resources and business guides, and weekly webinars.
For information about participating in upcoming webinars, which are conducted every Wednesday from 12:05 to 1 p.m., call 661-654-2856 or consult the CSU Bakersfield SBDC Facebook page. Those unable to participate in a live, online event can watch webinars on-demand on the CSUB SBDC YouTube channel.
One of five service centers within the University of California, Central California SBDC Regional Network, the SBDC in Bakersfield assists small business owners in Kern, Inyo and Mono counties by providing free consulting, small business training and research. For more information, go to www.csubsbdc.com.