Message To Our Representatives: Let’s Prioritize Vulnerable Businesses

Ventures and the Small Business Administration have been close partners for many years. We are very grateful for our friends at the SBA. We also know that one really tough part of their job is reaching the most vulnerable business owners – the solopreneurs and families that have put their personal savings and livelihoods on the line for their businesses. This is who our entrepreneurs are, and in our current climate of inequality it’s no surprise that this often means the most vulnerable are women-, immigrant-, and people of color-owned enterprises.

Of the SBA’s $800+ million budget, less than 2 percent is dedicated to the Microloan program – that’s just $40 million in loans for the entire United States. The coronavirus pandemic has laid bare the gap between support for businesses that are defined as “small” and those that actually are.

After four emergency funding packages from the federal government, the need to support small businesses with less than 10 employees is still very significant. This is especially true for businesses owned by women, people of color and immigrants who may face structural disadvantages or be unfamiliar with the way the federal government works. Adding insult to injury, there is also substantial evidence that black, Latinx and other minority communities are disproportionately impacted by coronavirus.


There has been a lot of controversy around federal support going to larger “small” businesses, but this outrage masks the larger issue. It’s not that these businesses and their employees don’t deserve support – it’s that our entrepreneurs do, too. In this moment, we must do more to prioritize the most vulnerable businesses.

Thankfully, there is still more opportunity for the change that our community needs. Congress is already debating additional funding packages for coronavirus relief, and the state legislature may come together this summer for a “special” legislative session to address budget issues as well. As our representatives come together, here is what our entrepreneurs need to stay afloat and recover as we slowly return to normal.

Loans, grants and loan guarantees targeted at microenterprises

By targeting funding programs at small businesses with less than 10 employees and less than $3 million in annual revenue, our government can ensure that they are reaching the most vulnerable businesses.

Future SBA funding should focus on grants or forgivable loans of $10,000+ funded through a simple, transparent process. Loans could be partially (i.e. 50 percent) or fully forgivable to create flexibility for lenders and entrepreneurs. We also believe that a “first-come, first-serve” model is not equitable, because it is more accessible to larger businesses who may have a staff person to submit the application or may have experience working with the federal government. To reach the most vulnerable business, these programs should include technical assistance funding for nonprofit providers who have existing relationships in the community.

Washington State should also fund loan guarantees for Community Development Financial Institutions (CDFIs) and Microenterprise Development Organizations (MDOs). These nonprofit, mission-driven lenders are made to serve vulnerable businesses, and loan guarantees can empower Ventures and many other organizations to give our entrepreneurs flexible, creative forms of capital to meet client needs.

Tax relief

Another way to support our entrepreneurs is by reducing their tax burden.

At the federal level, we support an expansion of the Earned Income Tax Credit, which would help both small businesses and their workers who are struggling to make ends meet. The EITC is one of our nation’s most effective anti-poverty policies and helps empower hundreds of thousands of households in Washington to achieve financial stability each year.

Washington State (and cities such as Seattle) should also provide relief from B&O taxes for businesses with less than 10 employees and $3 million in revenue. Even marginal, temporary relief could help an entrepreneur maintain workers’ hours, invest in technology to pivot to online sales – or just make rent.

Washington should also consider long-term tax relief for all low-income Washingtonians by funding the Working Families Tax Credit. This proposal is supported by a broad coalition of small business owners, workers, and social service providers. Any state proposal should include all tax filers who contribute to our state’s tax base, including those filing with an individual taxpayer identification number (ITIN).

Flexible regulation

Finally, we believe the state government should work hard to empower individuals with limited resources to start businesses in creative ways. This could include temporarily extending, canceling or reducing business license and permit fees, which may create unnecessary barriers to business ownership or renewal. These proposals would also encourage entrepreneurs to operate in the formal economy, ultimately contributing to our state’s tax base in the long term.

Finally, the state should also unleash entrepreneurship in low-income communities through innovative business models such as the Microenterprise Home Kitchens pilot proposal from 2020 House Bill 2777 / Senate Bill 6434.

By increasing access and lowering barriers to business ownership, our leaders can create opportunity when it is needed most. The current economic climate increasingly looks like both a sprint and a marathon, and we must respond with both short- and long-term solutions for entrepreneurs with limited resources.