SUN Port Charlotte
August 31, 2020
OUR POSITION: Small businesses have an uphill battle to flourish with the challenges in front of them.
Frank Knapp Jr. figured small businesses might be in trouble when Congress passed the tax revisions in 2017. He believes even more strongly today that anyone trying to run a small business faces obstacles common only to them.
Knapp visited the Sun last week to discuss his Small Business for America’s Future group. He said he and three others came together to advocate for “responsible tax reform and for policymakers to prioritize Main Street by advancing an economic framework and COVID-19 recovery plan for small businesses.”
He says no one is looking out for the little guy.
The best example he gave is his claim that only 16% of Florida’s small businesses got a Payroll Protection Program (PPP) loan.
And why did that happen? He says he knows.
“The Feds put banks in charge of overseeing the loans,” Knapp said. “So who do banks give loans to? They give them to their best customers.”
Knapp said small businesses — especially those just starting out — were left behind because banks looked at businesses with a history of success to invest the PPP funds in.
He said small businesses have had to deal with this sort of challenge for a long time and he wants to make it better. But there are roadblocks in the way.
“The tax break did not do what it was supposed to do,” he said of the massive overhaul of tax structure that gave individuals a bigger paycheck but also gave corporations huge benefits.
“The tax break gave money to the people who need it least. It was suppose to create funds that would be used for infrastructure, schools and so on and that did not happen. And we don’t have any businesses coming back from overseas because of the breaks.”
Knapp said when the tax breaks for individuals end in 2024 people will lose the benefit but corporations will continue to get the tax break indefinitely.
He believes America was built on the backs of the small businessman and that era could be ending.
“Most new jobs nationwide are created by businesses with four or fewer employees,” he said.
But America is at a 40-year low in new business start-ups. He said the government needs to do a year-long study why that is happening and fix it.
Some of the problems he sees that need fixed include the fact that entrepreneurs do not have access to start-up money.
“The traditional way is to get a loan — like a new truck for a landscaper and so on,” he said. “But banks today too often feel a new business owner is too risky. We’d like to see the Small Business Association give loans (instead of banks).”
His advocacy group took a survey that found:
- 53% of those surveyed have not taken on new debt because of COVID-19.
- 80% do not think Washington leaders understand the needs of small business owners.
- One in four small business owners have debt of $20,000 and 18% have debt of more than $100,000.
- 40% of those who got a PPP loan used the money to reopen.
Knapp said there are 30 million small businesses in the U.S. and most of them have four or fewer employees. And, 6 million of those small businesses employ 60 million people.
He is traveling over much of the U.S. to push people to ask their congressman to focus on help for small businesses. He said he visits newspapers because they have the “megaphone.”
To learn more about the group’s mission go to www.smallbusinessforamericasfuture.org.