Relief proposals need to be expanded, says executive director
LOS ANGELES, March 25, 2020-- The Milken Institute is advising small business owners to take specific actions immediately while calling for more ambitious government relief measures in response to the crisis.
"Small businesses employ half of U.S. workers. Economists from Goldman Sachs and elsewhere are projecting job losses in excess of 2 million this week alone. Given that the U.S. economy is over $20 trillion, current proposals for a recovery plan of $1–2 trillion may not be sufficient to minimize job losses and lay a foundation for recovery," explains Kevin Klowden, executive director of the Center for Regional Economics and California Center (CRE).
Together with Eugene Cornelius, Jr., CRE senior director and a former top official at the U.S. Small Business Administration, they are offering recommendations to assist businesses suffering from the lack of funding needed to retain employees and to expand after the recovery begins.
Specifically, small business owners need to:
1. Use available lines of credit as soon as practicable to avoid problems with accessing cash flow due to further disruptions in the lending environment
2. Reexamine long-term expenses and reduce, delay, or eliminate short-term non-essential operational costs
3. Reduce hours for non-essential personal (instead of layoffs) to minimize downtime and ramp up operations quickly once conditions improve
4. Establish open lines of communication with creditors and suppliers to increase flexibility and provide more opportunities for adjustment
The Milken Institute is working with the Small Business Administration and other groups to expand capital access for underserved communities and address lending gaps for minority entrepreneurs.
Both Klowden and Cornelius are available to discuss the federal, state, and regional policy actions needed, along with providing additional specifics for business owners.
