Caroline Cummings
Cummings is the executive director of Oregon RAIN, which helps build entrepreneurial ecosystems in Oregon.
Oregon’s ability to recover when the immediate threat of COVID-19 subsides depends on people like Riley Hoagland of Lincoln City, a tireless inventor with notebooks full of great ideas. He took a new consumer product to market last year and received his first major international order shortly before the virus hit. And within the last two weeks, he's invented a new home health care device in response to the COVID-19 crisis.
It relies on people like Anielis Raas of Philomath, who, almost overnight, converted her clothing manufacturing business to produce face masks for health care workers and first responders. She’s also stepped up to deliver business workshops in Spanish for her fellow entrepreneurs. She’s not only saving jobs, she’s saving lives.
It relies on people like Benny Augeri of Corvallis, who makes some of the best doughnuts in the state. When he had to close up shop, Benny converted to a delivery service that leaves fresh doughnuts on doorsteps. Now he’s bending over backwards to keep eight employees on the payroll — but with the onerous requirements and uncertainty surrounding the Small Business Association’s Payroll Protection Program, he fears he’ll still have to lay off his staff.
Since the COVID-19 crisis broke, we have heard from hundreds of entrepreneurs across Oregon who are anxious about paying rent, meeting payroll and staying in business. They’re desperate for capital and frustrated by red tape. They feel invisible, unheard and ignored.
Many of the rural and minority entrepreneurs we serve didn’t even receive the funding and feel shut-out from the opportunity.
We understand regulators and financial institutions are building the plane while flying it, but they need to recognize the depth of this crisis. They need to prioritize businesses with fewer than 20 workers.
In Oregon, 97.7% of businesses – more than 9 out of 10 private sector firms – in Oregon have fewer than 20 employees, according to statistics from the state department of employment. Most startup companies fall in this category and face additional barriers to launching their businesses.
In the last two sessions, two bills – Senate Bill 258 and House Bill 4033 – put forth to the Oregon Legislature that would have helped these businesses access capital and support entrepreneurial growth were killed by the Joint Interim Committee On Ways and Means, despite significant support from both sides of the aisle.
It’s unfair for this segment of small businesses and startups to compete in the same “small business” category as companies with up to 500 employees, as defined by the SBA.
Startups and small businesses are the quickest casualties during and after a disaster. Half of them have less than 15 days of operating cash on hand. According to the Federal Emergency Management Agency roughly 40% of small businesses never reopen their doors following a disaster, and 90% of smaller companies fail within a year unless they can resume operations within five days.
We’re grateful that Congress stepped up with some resources and hopeful there will be more on the way – and that they will reach the smallest of businesses and those run by people of color. We are grateful to U.S. Sen Ron Wyden for urging Congress to work with lenders to ensure fair access to minority-owned businesses and data transparency. We need more of this support. We need legislators to prioritize businesses with fewer than 20 workers — the backbone of America’s economy — as well as minority business owners.
I was pleased to see that Oregon’s Emergency Board approved $5 million in financial assistance to businesses with a maximum of 25 employees last month. This money will be also matched with another $5 million from the Oregon Business Development Department, resulting in a $10 million fund that will offer assistance to small businesses that haven’t been able to access the SBA’s Paycheck Protection Program or other federal emergency funds. However, I’d like to see Oregon’s legislature think beyond this current crisis and develop laws that reduce barriers for emerging businesses.
I ask Oregon legislators to look to the policies spelled out in America’s New Business Plan, which was developed by the Kauffman Foundation and is backed by a coalition of over 150 entrepreneurial support organizations around the country, including ours. One example would be to develop an Entrepreneur Impact Statement that looks at how new laws, regulations and rules affect businesses in Oregon that are less than 5 years old.
Lastly, we ask Congress, the White House, and the Oregon Legislature to create laws that prioritize emerging businesses with fewer than 20 employees. If anyone’s going to revive the American Dream and create new jobs, it’s them.
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