How Do Small Business Owners Really Feel About Their Current Position in the Economy? – Tom Sullivan, U.S. Chamber of Commerce

Today on the Atlanta Small Business Show, we’re pleased to welcome back Tom Sullivan, Vice President of Small Business Policy for the U.S. Chamber of Commerce. In this segment, Sullivan breaks down the highlights from the latest MetLife and U.S. Chamber of Commerce Small Business Index. Additionally, he discusses continual improvements to the PPP loan program, and other COVID relief grants and loans.

Transcription:

Jim Fitzpatrick:
Hi everyone. Jim Fitzpatrick with The Atlanta Small Business Show. Thanks so much for joining us once again.

Jim Fitzpatrick:
We are so excited to have Mr. Tom Sullivan, Vice President of Small Business Policy for the U.S. Chamber of Commerce. You’ve seen this young man on our station before. Tom, thank you so much for joining us once again on the show.

Tom Sullivan:
Jim, it’s a pleasure to be here. Thank you, and thanks for your continual reporting on main streets across the country.

Jim Fitzpatrick:
Sure thanks, and we’re happy to do it. We want to get right from you, right from the horse’s mouth, you’ve got a very unique perspective and a viewpoint there working with small businesses and entrepreneurs all over the country. How are things going out there?

Tom Sullivan:
What we’ve heard from small businesses and this has been verified by our MetLife and U.S. Chamber of Commerce Small Business Index is that there’s certainly light at the end of the tunnel. That light being vaccinations. However, we also have learned that it’s a really long tunnel and that certainly depends on what type of business you’re in and it certainly depends also on the demographics. Minorities have been hit differently. They’ve been hit harder quite frankly, than other businesses during the pandemic. So it really depends, but we are primarily focused on the light at the end of the tunnel.

Tom Sullivan:
Our index actually rose three percentage points from the end of last year, which is really, really good news. I think that pragmatically we’ve got to realize that even though we’re up three points, we’re still down well below pre-pandemic levels. So we’ve got a long way to go before we kind of quote-unquote return to normal, but we’re certainly on track.

Jim Fitzpatrick:
I was going to say we’re trending in the right direction, right?

Tom Sullivan:
Yes. Yeah, we are.

Jim Fitzpatrick:
There’s no question about it. Talk to us a little bit about, obviously a lot of small businesses that did make it through the pandemic, I say through it, I agree with you there’s light at the end of the tunnel, it seems as though we’re coming to an end. The president just spoke today, and he talks a lot about July and August for us to start to really get back to normal. When you go to the airports, you’ll see that the planes are almost back to pre-level or pre-COVID levels in terms of capacity on planes and such, so it looks like we’re moving in that direction. Talk to us about some of the PPP money and how that has helped and where that stands today.

Tom Sullivan:
Sure. Thanks again, Jim. First of all PPP could always work better. We work with our friends at SBA, we work with Congress and there’s this continual improvement model. Not many people know that PPP was actually legislatively changed six times in 12 months. Now the good news is that they continue to try to make it better.

Tom Sullivan:
I think the even better news is that when you speak with small business owners, they are so amazingly grateful for a federal program that has stepped in to say, “We know you care first about your employees, and we want to make sure you can keep them on payroll even if they’re not working until you get back up and running and your customers get back.” So from that standpoint, PPP has been a remarkable success.

Tom Sullivan:
The program ends at the end of May. There is a little bit of money left; I think 20 to $40 million left. So if someone is tuning in and needs a loan and has not gotten one before, then they certainly should talk with their banker or their lender or their small business development center and ask whether or not they can be eligible for PPP loans.

Tom Sullivan:
Jim, I got to say, part of the success to this was a true public private partnership. So you had SBA saying, “Look, we’re the nation’s cabinet agency to help small business,” but at the same time, they realized that the businesses that loan money to entrepreneurs many times our credit unions, community banks, national banks, community development financial institutions, minority development institutions, there was this realization they’ve got to rely on that private sector network to get money out to small business. And because of that private partner partnership, it really did work.

Tom Sullivan:
Now we do notice that it’s a kind of a K-shape recovery. At the top of the K you see businesses that are doing really well. For instance, construction. Construction has been doing very well for the last eight to 11 months. But that bottom part of the K; hospitality, restaurants, hotels, have really been struggling. What we’ve seen is a narrowing in on those industries to try to help. You may be aware there’s a Restaurant Revitalization Fund Grant program that SBA is getting ready to launch. There’s been some challenges with SBA rolling out what’s called a Shuttered Venue Operator Grant program. Both of those programs are really narrowing in on those segments of our small business economy that have struggled the most.

Tom Sullivan:
Lastly though, I do want to point out it’s not just what type of business you’re in; it’s also the demographic. We know from research that was done as recently as last week by the Federal Reserve that Black owned businesses in America are half as likely to get the loan they need then their white entrepreneur counterparts. I think to the credit of this private public partnership that I mentioned there is renewed focus on trying to kind of fill that access to capital gap, working with historically Black colleges and universities, working with the treasury department, CDFI program. There is a renewed emphasis on helping that community that needs help more than other parts of the small business community to take part in this economic recovery.

Jim Fitzpatrick:
Right. Yeah, it’s got to be a situation of as they say, high tides lift all boats, and it has to apply in this situation. I’ve spoken to a number of small business owners here in Atlanta that have felt that way, as though because they were a minority that they weren’t getting treated the same way or they didn’t have access to the capital. But in large part, for the most part, it seems as though everybody has benefited greatly from the government rolling out the PPP program, and not just once, but twice. There’s been a lot of small businesses that have said, “My gosh, these life preservers were thrown to us at just the right time that it kept us in business and now things are starting to come back around.” And then the notion that the items that they paid for in terms of payroll and rent and things like that are still tax deductible, so that’s huge, right?

Tom Sullivan:
Yeah, it is huge. Jim, you and I were chatting a little bit before the cameras turned on about how President Biden today announced that if a small business owner’s employees need to take time off, the federal government is going to reimburse this business owner for that time off. It shows a sensitivity to what small businesses are grappling with, and that’s very, very positive.

Tom Sullivan:
We’re looking in the September, October timeframe as where the economy really takes off, and it’s really for two reasons. First, you’re going to have more full vaccination. You have kids back to school. You’re going to see a broader workforce, but also that’s when the supplemental unemployment insurance ends. You’re going to see this renewal of folks back to work. So we see at that point, that’s really where we’re going to realize this full road back to recovery that we’ve been expecting and hoping for for a long time.

Jim Fitzpatrick:
That’s right. Do you see where there are funds available, but people either don’t know about them or haven’t made application or having trouble in that area? I spoke to an individual at the SBA just the other day and she said to me, “We’ve got a lot more money available than people are aware of and we’d love to give it out, but we’re just not getting requests for it.” Have you seen some of that taking place?

Tom Sullivan:
I’ve seen one example federally, and then I’ll kind of give a teaser locally. On a federal perspective, the Employee Retention Tax Credit, when Census Bureau as recently as two weeks ago surveyed small businesses, hundreds of thousands of small businesses, over 80% of those small businesses knew exactly what PPP was. Less than half of 1% knew anything about the Employee Retention Tax Credit.

Tom Sullivan:
So if anyone is dialed in as a small business owner who has employees, please, please, please talk with your CPA. If you’re big enough to have a bookkeeper, or if you use a payroll service, please ask them whether or not you could benefit from the Employee Retention Tax Credit, because if they don’t ask, they’re leaving money on the table.

Tom Sullivan:
Now from a teaser of local money and funds, there’s an enormous amount of funds that are being distributed to counties and cities across the country through the American Recovery Plan. It is really going to be in the hands of local economic development officials on how small businesses can access those funds. I’m excited about that, but it is going to be very unique to each locality throughout the country.

Jim Fitzpatrick:
When do you think it will be that we see more small business openings than we see closings? Are we there yet, and if not, how far away are we?

Tom Sullivan:
Jim, it’s funny you say that because I was just mentioning my friend, Jeff [inaudible 00:10:47], who’s that restaurateur from Jackson, Mississippi. On top of all of these incredible things that he’s doing, he just opened a restaurant this past week. I really believe that October we are going to see this economy completely take off in a very positive way.

Jim Fitzpatrick:
That’s right. That’s great. That’s great because for those small business owners that are listening to us have this discussion right now, it might be a good time to lease that store or to get your website put together or to get your house in order. Don’t wait till October, because then you miss the rush. If you start in October, you’re not going to be up and running until February. Use the summer to your advantage. I agree with Tom, I think in October, in November, we’re going to see this thing just roaring along the way that it was pre-COVID. So put your house in order, get the monies that are out there available to you, start that small business. Build it and they will come, right, Tom?

Tom Sullivan:
Yes.

Jim Fitzpatrick:
Build it and the business will be there for sure.

Jim Fitzpatrick:
I want to thank you Tom so much for joining us once again on the show. I know our viewers and our subscribers get so much out of your visit. You’re a soothing voice out there for them right now.

Jim Fitzpatrick:
Tom Sullivan, VP of Small Business Policy at the U.S. Chamber of Commerce. He’s one of the big guys that we’re so happy to have on with us, so thank you so much.

Tom Sullivan:
Pleasure being with you, Tim. Thank you.

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