The information supplied below was accurate at the time it was given on April 16, 2021, but guidance surrounding current programs is subject to change, as is the text of the bills currently being worked on. For the latest information on Covid relief measures, please visit SBA’s website.
The content from this call was provided for informational purposes only, and should not be construed as personal business advice on any subject matter.
On April 16, Envolve hosted a Small Business Policy Day for small business owners and entrepreneurs to hear from Senate staff about current Covid relief measures and upcoming legislation targeting the entrepreneurial ecosystem. We were fortunate to be joined by representatives from Senator Ben Cardin (MD) and Senator Chris Coons’ (DE) offices for two sessions. Kylie Patterson from Senator Cardin’s office led the first session, giving an overview of current Covid relief measures available to small business owners, as well as some legislation that is currently being discussed. Shivani Pampati from Senator Coons’ office gave our audience an overview specifically on the Next Generation Entrepreneurship Corps Act, which his office has been instrumental in outlining.
Session 1: Kylie Patterson, Office of Senator Ben Cardin
Patterson started by offering some background of Sen. Cardin’s work in Congress, both in the House and in the Senate. Patterson showcased the long history of bipartisan work that Ben Cardin has done and his special interest in helping small businesses. She enunciated part of this work is framed in Cardin’s priorities: equal opportunity for the underserved and focusing on the pandemic, small minority, and women-owned businesses priority in jobs act. She explained that the Small Business and Entrepreneurship Committee has been working tirelessly since last March to provide relief to those who need it most.
Patterson then summarized current Covid relief measures for small business owners and entrepreneurs:
American Rescue Plan Act (ARPA):
- Additional funding was allocated for the Shuttered Venue Operators Grant Program (SVOG). Businesses are now eligible to apply for both PPP and the SVOG – applications will be opening shortly.
- $28.6 billion for the Restaurant Revitalization Fund, which will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business.
- Additional funding for the PPP and adjustments that have made the program more effective for Schedule C filers. The application deadline has been extended to May 31.
- Additional $15 billion for the Targeted EIDL Advance for the businesses that have been the hardest hit.
- Community Navigator Program: Goal is to increase the knowledge around and use of the Small Business Development Centers.
- State Small Business Credit Initiative: Each state will be allocated funds to be used for business revitalization at their discretion.
Patterson also provided information regarding current legislation being proposed that pertains to small business and entrepreneurship:
- Next Generation Entrepreneurship Corps Act: Goal is to increase funding to underserved businesses.
- Uplift Act – This bill seeks to develop incubator programs at HBCUs for both students and community members.
The Committee is also in the process of evaluating current SBA projects and working with the U.S. Patent and Trademark Office to evaluate at what rate SMBs are using their services and how they can better help small businesses protect their intellectual property and brands.
Patterson then asked the audience about the top challenges they have experienced in their journey as entrepreneurs. Responses included:
- Securing capital
- Figuring out business model/structure or IP related questions
- Understanding and navigating government contracts
- Effectively setting up e-commerce
- Accessing patient capital
- Staying up-to-date on tech and automation
Will the SBA “Community Navigators” Initiative be funneled through SBDCs or open to other not-for-profit organizations on the ground?
The intent is for funding to go to qualified nonprofits and business centers.
How is the SBA making sure that all PPP funds are going to the businesses that need them?
The intent of the PPP was always that it would go to underserved businesses. Many changes have been made to help ensure the businesses that most need funding receive it.
- Guidelines have been set that businesses need to demonstrate a reduction in revenue
- In an effort to prioritize lenders who are best able to reach communities of color, funding was set aside specifically for CDFIs.
- For second draw loans – borrowers had to demonstrate a loss of revenue, and a pool of funding was set aside specifically for new borrowers and borrowers with less than 10 employees.
Patterson stressed that a large problem in accessing PPP funding has been misinformation. For the latest, most accurate information, always visit the SBA’s website.
As vaccine rollout is opening up to all adults, will we see more programs geared toward helping businesses fully reopen once things go “back to normal”?
When the Economic Act the Congress passed in December, there was additional funding appropriated to the Microloan program and increased guarantees to support small businesses to help return back to normal. The committee is also looking at disaggregating current data to offer better solutions for minority-owned and women-owned businesses and how they could improve some of the SBA lending programs.
Session 2: Shivani Pampati, Office of Senator Chris Coons
This session discussed the future of small businesses and the Next Generation Entrepreneurship Corps Act. We welcomed Shivani Pampati, who spoke on behalf of Sen. Chris Coon. Pampati has been part of the Economic Policy Team for over a year, and she has been focused on entrepreneurship, small business, and innovation.
Pampati gave an overview of the Next Generation Entrepreneurship Corps Act. She started by explaining the bill’s aim to help rebuild distressed areas. Pampati explained that most underserved and underrepresented entrepreneurs do not have access to capital and this bill seeks to fill this loophole.
Pampati pointed out that the Next Generation Entrepreneurship Corps Act will include a national business competition. It will have a selection panel of 12 leaders from the public and private sector who would run a competitive process to select 320 entrepreneur fellows annually, from diverse backgrounds, to start both traditional and high growth-potential businesses in low-income census tracts.
The selected fellows would receive a $120,000 two-year stipend for living and basic startup expenses; health benefits; and interest-free federal student loan deferral for two years. They would also receive business training, be matched with a local business mentor, as well as connected with local accelerators and incubators. There would also be support from a national advisory board of CEOs and VCs.
The ultimate goal of the bill is to provide the necessary resources to entrepreneurs outside of the traditional high investment areas.
Will this be an annual program?
The current legislation initially provides funding for 5 cohorts over 6 years.
Is there going to be an application process for entrepreneurs?
Yes, entrepreneurs would have to present a business plan that will be evaluated by the committee.
How is the Selection Committee going to be formed and be vetted as members of the direct community vs. large titles and known names who may be removed from the individuals that this bill aims to serve?
12 individuals will be selected from different sectors and areas of expertise, who all have experience in reviewing and evaluating business plans. These individuals will go through a vetting process, similar to Senate confirmed positions, but will be chosen by the SBA Administrator. The group will be required to be bipartisan and diverse. They will also be required to work with local organizations that have deep connections in the target communities.
Is this ideal only for venture backed focused entrepreneurs?
No, it is open to entrepreneurs from all sectors. There is specific language indicating that the cohort should not favor high growth or venture backed businesses.
You mentioned mentorship. Will the mentorships be 1 on 1, or will there be an opportunity to work with different mentors who have different areas of expertise?
Mentorship will work in two ways. Participants will have the opportunity for 1 on 1 mentorship with notable CEOs and VCs, and there will also be peer cohort support.
How do you envision the private sector’s role in the program?
First, it would be involved with the Selection Committee. Second, it would be involved with partnerships, connecting entrepreneurs with incubators and accelerators, and making sure they are aware of the resources for access capital.