The spread of COVID-19 and the necessary, state-by-state restrictions imposed on commerce and business is threatening the health of small businesses across America. 37% of small businesses have less than 30 days of cash on hand. Most businesses wait a minimum of 28 days to get paid – and in many cases it is even longer.
How can we help keep small business open? Congress has approved $350B in stimulus money and is prepping another large infusion to supplement that, but in the days and weeks it is taking to implement, thousands of small businesses are closing and may never open again.
But – at any given time, small businesses are owed $900B in receivables. We must pay today – we must encourage large enterprises and organizations to pay their small business vendors immediately — this is a sure way to keep many of our small businesses solvent while they await support from the stimulus.
This is the focus of #paytoday, a coalition started by concerned companies that together serve over 5 million small businesses. Actual Agency is proud to be a member, together with Fundbox, Alignable, Womply, Gusto, Homebase, smallbusinessedge, smallbizdaily, and Business.com, Here is how it works: each company’s CFO has taken a pledge to pay its small business vendor payables immediately, and it is what we are asking of larger corporations and organizations.
The data is frightening: we realized that if we didn’t do something, many small businesses wouldn’t survive more than a month after the coronavirus quarantines began. So, we started this movement: if everyone just paid the money they owed small businesses right away, it would inject a huge amount of capital into the small business economy and give them some runway until the stimulus funds are disbursed. Our goal is to raise the visibility of the problem, amplify the voice of small businesses, and mobilize enterprises and governments to get on board before it is too late.
With small businesses responsible for nearly half of the payrolls in this country, it raises eyebrows that so many are so close to the edge when it comes to their cash reserves. Couple this with the fact that small businesses create approximately 60 percent of the net new jobs in our country, and file about 14 times more patents per employee than their larger counterparts, you have an even more worrisome picture.
Karen Mills, Director Small Business Administration 2009-13
Small business is the economic lifeblood of America. We must #paytoday.