Small businesses are among the hardest hit by the COVID-19 crisis. Many are shuttered, and far more face cash flow constraints, raising questions about just how many will survive this recession. The government has responded with a critical forgivable loan program, but for many of these businesses, this program alone will not provide the cash they need to retain workers, pay rent, and help their business come back to life when Americans are no longer sheltering in place. This essay calls on regulators to find new and creative ways to work with existing intermediaries, including banks and online lenders, who have the infrastructure and tools needed to help small businesses get the additional loans they need to survive and thrive. Leveraging existing institutions could enhance the speed, scale, and scope of the government’s response, all critical virtues in the efforts to support small business.
Banking and Finance Law | Business Organizations Law | Law | Law and Economics
Center for Law and Economic Studies
Todd Baker & Kathryn Judge,
How to Help Small Businesses Survive COVID-19,
Law in the Time of COVID-19, Katharina Pistor, Ed., Columbia Law School, 2020; Columbia University School of Law, Center for Law & Economic Studies Working Paper No. 620
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