The Milken Institute Tuesday pushed for more ambitious government relief measures in response to the coronavirus crisis in order to help small businesses survive.
Small businesses employ roughly half of workers in the United States — and economists from Goldman Sachs and elsewhere are projecting job losses in excess of two million this week alone as a result of the worsening crisis caused by the virus, according to the Santa Monica think tank.
“Given that the U.S. economy is over $20 trillion, current proposals for a recovery plan of $1-2 trillion dollars may not be sufficient to minimize job losses and lay a foundation for recovery,” said Kevin Klowden, executive director of the institute’s Center for Regional Economics and California Center.
Milken has developed a series of 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 are advised to:
— Use available lines of credit as soon as practicable to avoid problems with accessing cash flow due to further disruptions in the lending environment;
— re-examine long-term expenses and reduce, delay or eliminate short-term non-essential operational costs;
— reduce hours for non-essential personal — instead of layoffs — to minimize downtime and ramp up operations quickly once conditions improve; and
— establish open lines of communication with creditors and suppliers to increase flexibility and provide more opportunities for adjustment.
As part of its efforts, 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.