GUSTO COO LEXI REESE SAYS CONGRESS NEEDS TO “INCENTIVIZE BANKS AND LENDERS” TO APPROVE LOAN FORGIVENESS WITHIN THE NEXT SIX WEEKS: “TIME MATTERS FOR SMALL BUSINESSES”
LISTEN + FULL TRANSCRIPT HERE
This week on the CBS News podcast FACING FORWARD with MARGARET BRENNAN, Lexi Reese joins Brennan to talk about the state of small business in America during the COVID-19 pandemic. Reese is the chief operating officer of Gusto, a platform used by more than 100,000 small businesses to facilitate their payroll, benefits and HR needs.
Full transcript of the episode available at CBSNews.com HERE. The latest episode of FACING FORWARD is out now on Apple Podcasts, Spotify and wherever podcasts are available.
Excerpts from this week’s episode:
On whether federal aid has helped small businesses: “Congress intended the PPP to accomplish two goals: help small businesses cover their near-term operating expenses, which we knew were going through the roof, and provide an incentive for employers to retain their employees and keep them on payroll. The intent was right. The impact has not been felt well… Tons of businesses, nearly one in four business owners who have not applied for loans in round two, is because they haven’t had their first loans forgiven.”
Minority owned businesses disadvantaged by federal program: “75% of Black-owned businesses have not had their loan forgiven. That’s compared to 56% of white business owners. Ninety-six percent of Black-owned businesses are sole proprietors or businesses owned and operated by one person. And sole proprietorships struggle to get access to PPP funding again because the documentation requirements are particularly onerous on these businesses. But it’s not because they don’t need them. So the fix is SBA can prioritize minority-owned businesses and make sure that the access is commensurate with the representation that these businesses have in the American workforce.”
Small biz owners cannot afford $15 minimum wage hike now: “If we just talk about really taking a holistic view, for small business owners to be able to do it, one, they need to stay in business. Two, to stay in business, they need to get the access to capital they need quickly and they need to, when they get access to capital that comes in the form of a loan, not have that debt hanging over their head for too long. And then three, the minimum wage being raised would make sense only after those two things happen. Because if you added that in right now from a tops-down approach, small business owners would say, are you guys not getting it? Come on man. All my expenses are going up right now. I still can’t get access to the money that I need to make all of this math work.”
On women forced to leave the workforce during the pandemic: “Women in the labor force is at a 33 year low… women have made incredible gains in the economy over the past decade and they are employing other women, but they’ve been making gains in industries that are the hardest hit by this pandemic, especially those that rely on face-to-face interactions, salons, spas, education, retail… women dropping out of the workforce or closing their businesses to be able to take care of their kids who can’t go to school… this doubles the trouble for women-owned businesses.”
On the urgency for more congressional action: “Banks are financially incentivized to extend new loans rather than forgive existing ones. So Congress needs to incentivize banks and lenders to approve loan forgiveness and push lenders to approve loan forgiveness applications within the next six weeks. Time matters for small businesses.”
CHEAT TWEET: With the #COVID19 economy still sluggish in its recovery, how can the hardest hit survive? @margbrennan talks #smallbussiness relief and the road ahead for minority and women-owned biz with @GustoHQ’s @lexir on #FacingForwardPod. cbsn.ws/2M53SBT
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