In March, the beginning of the COVID-19 pandemic saw numerous reports of people hoarding important supplies. Authorities in Tennessee investigated two brothers who had stockpiled nearly 18,000 bottles of hand sanitizer. Panicked shoppers prepared for stay-at-home orders by buying huge quantities of toilet paper, bottled water, and other provisions.
As disappointing as some of these incidents were, our country now faces an even bigger hoarding problem. Businesses only mildly affected by the pandemic or with plentiful access to capital have “boxed out” small businesses in the race to apply for federal assistance. As large businesses use government resources to hoard cash, some small businesses may not survive much longer.
I have spoken with the leaders of many small organizations, both non-profit organizations and for-profit businesses, about the pandemic’s impact. Many of them could not access the Paycheck Protection Program, which Congress established last month to aid small businesses.
In theory, the program sounds like a godsend for firms that have been shut down for public health reasons during the pandemic. Businesses with fewer than 500 employees can apply for loans through their banks. The loans will help fund payroll and operating expenses during the virus-related shutdowns. Firms that hire back their furloughed workers won’t have to repay the loans — the federal government will convert the dollars into a grant.
But many small businesses can’t even get in the door for these loans. In the mad rush to apply, many big banks chose to prioritize their biggest customers. A loophole that allowed restaurant chains and hotel franchisees to apply for loans allowed well-known companies such as Shake Shack, Potbelly, and Ruth’s Chris Steak House to receive federal assistance. It’s the kind of story that makes people angry at bureaucrats and politicians: The rich and well-connected get richer while the proverbial “little guy” gets the shaft.
That said, political pressure did make Shake Shack and Ruth’s Chris pledge to return their funds. (Potbelly has thus far declined to do so.) Congress appropriated another $310 billion for the program last week, which allowed more businesses to apply for and receive relief beginning Monday morning.
But even that additional funding likely won’t cover all the need. The owners I talk to worry that they won’t have any more luck receiving program funds this time around than they did with the last tranche of funding. Others note that the funds only cover businesses’ payroll, meaning owners who don’t pay themselves a salary and take profits from the business to pay their personal expenses won’t have a source of income to pay their own grocery bills or the mortgages on their houses.
We have spent the past several weeks applauding our front-line workers — and rightly so. From doctors and nurses in crowded emergency rooms to clerks and warehouse workers in our grocery stores, these individuals have kept working to keep all of us safe, healthy, and well-fed.
But my small-business friends want to work — desperately. Through no fault of their own, government actions and safety considerations forced their businesses to close. They see their life’s work, their hopes and dreams, evaporating before their very eyes. Their entrepreneurial spirit represents the beating heart of our economy, and I worry that without immediate action, that spirit will quickly fade.
Supporting our front-line workers shouldn’t become a partisan issue, and neither should supporting our small-businessmen and businesswomen. They deserve our full support, and they deserve action from Congress, states, and local governments to sustain their businesses during this pandemic.
Chris Burns is the CEO of Dynamic Money and host of the Chris Burns Show on WSB. He is a regular on Fox News, as well as a regular commentator on CNN, national radio, and other outlets.
