April 20, 2020
The Honorable Mitch McConnell, Senate Majority Leader
The Honorable Chuck Schumer, Senate Minority Leader
Dear Majority Leader McConnell and Minority Leader Schumer –
I write to you this evening to applaud you and all members of the Senate for your swift action on behalf of American creators and other small businesses. We are learning today that a second, much-needed round of funding for both the PPP and EIDL loans is now being fast-tracked and could receive approval in the morning. We urge all members of the Senate to support this plan, but we must also sound a word of caution that we hope will be part of your considerations. Urgent funding is critical. But creating additional processes that help distribute the funding to the smallest of small businesses is equally as critical if we are to help those businesses weather this unprecedented storm.
The visual arts industries in America (graphic designers, illustrators, and photographers of all types) support hundreds of thousands of American families who find themselves holding on for dear life in this crisis. With few exceptions, those businesses became unemployed overnight. There was no transition. One day they had the ability to make money and feed their children; the next day their businesses were dead in the water. Those hundreds of thousands of micro-business creators – businesses of 10 or fewer employees, with most of them being just one to three employees – were anxiously awaiting the relief packages being worked on in Congress. These businesses were perhaps more desperate than any others, with little or no reserves on which to fall back. Unfortunately, by the time the relief bucket got to many of them, there was nothing left.
We were surprised to learn that businesses of 500 or fewer employees were put in the same category as businesses with 50 employees. And we were even more surprised to learn that those businesses were placed in the same funding category as micro-businesses with fewer than 10 employees. There was simply no way for the neediest of America’s small businesses to compete for the funds they so desperately needed. Once the packages were announced, associations like ours began updating our members on how to apply. It didn’t help. The reality is that there was no way for small, micro-business creators to keep up. The larger, better organized, better staffed employers simply beat small creators to the front of the line. While the processes were simplified, we argue that they were not simplified enough.
One of the most significant problems is the lack of understanding about the PPP and EIDL on the part of U.S. lending institutions. We have found that banks have wrongly turned away our members, claiming that sole proprietors don’t have payroll, and therefore, don’t qualify. We call on Congress to recognize the realities of most American businesses, the vast majority of which fall into the micro-business category. We urge you to create new funding for the PPP and EIDL loans, with additional processes creating differing entry points based on the size of the businesses. We ask that ample funding be provided specifically for America’s small businesses of 10 or fewer employees. Only in this way can we ensure enough assistance is making it to the end of the line where the most vulnerable of American businesses wait.
We would point out that the issue is not just about keeping people employed. It must also be about keeping sole proprietors viable, so that when we emerge on the other side of this crisis, we have those businesses to help us restart the economy. This point is critical. After all, in times of crisis big business lays off, while small business does the work of restoring our economy to full health. We must act now to keep our photographers and other micro-business creators from drying in the sun-scorched environment created by this unprecedented event.
Congress has acted swiftly and boldly to keep America’s economy from withering. We applaud you for your courage and willingness to work together. With that experience under your belt, we urge you to recognize that new funding is needed, which includes processes that pump funds directly to the smallest of small businesses. We now know that simply creating a bucket where the strongest get to drink first will not work.
America’s micro-business creators are living through a dust bowl, with little to nothing to keep them going. You are their only hope. As always, we stand with you to help create processes that level the playing field and allow those who are most in jeopardy to compete for assistance. They need help, and they need it quickly.
Chief Executive Officer
CC: Members, U.S. Senate