The Small Business Administration has declared a statewide disaster in Vermont making loans available for businesses affected by the COVID-19 pandemic. The loans offer up to $2 million with an interest rate of 3.75% per business. These loans might be helpful for some but what is a small business? Using general definitions/estimates: small businesses make up 99% of U.S. businesses -- a small business (dependent on type) may have up to 500 employees -- around 89% of all U.S. businesses employ 20 people or less -- 23 million businesses in the U.S. have no employees at all. So, between or below one to 500 employees and up to $7 million in sales can identify a business as small. That’s quite an umbrella.

Many Vermont villages and towns, as well as neighborhoods in larger cities, are anchored by truly small businesses (micro-businesses). Even before the pandemic, the number of vacant storefronts in our towns shows how difficult it can be to sustain a successful business. What’s the reality of a loan being effective and helpful that charges 3.75% interest to businesses reduced to little or no income due to the pandemic? For many small business owners, depending on their business ownership structure, unemployment benefits are not an option.

Providing positive and effective relief for truly small businesses will require thinking outside the box and breaking away from the Small Business Administration’s definitions and regulations. The U.S. airlines are requesting nearly half of their billions of bailout money in grants. Why not offer grants for small businesses as well? These are challenging times, to say the least. Financial business assistance needs to be presented in a realistic manner that will allow for attainable solvency for the many Vermont-sized businesses that anchor our communities and strengthen their fabric.

Bodo Carey


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