Small businesses won't survive winter and another crushing COVID-19 wave unless Congress acts now

• With winter coming, thousands of small businesses and millions of jobs are under threat and may shutter without aid from Congress. 
• A new aid package must include three things: extending PPP funds and tax credits to winter expenses, fund testing and PPE with forgivable loans, and provide a general winter tax credit. 
• Lexi Reese is the COO of Gusto, the people platform that provides modern payroll, benefits, compliance, and expert HR to more than 100,000 small businesses across the U.S. Jeanette Quick is Gusto's Lead Counsel for Financial Services.
• This is an opinion column. The thoughts expressed are those of the authors. 
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While a new federal coronavirus relief bill remains at a standstill, small businesses are struggling to prepare for winter and a resurgence in COVID-19 cases. Unless aid comes quickly, thousands of small businesses will be forced to shutter. 

Ensuring the survival of small businesses should not be a partisan issue. Millions of jobs are at stake, and a new aid package cannot wait until Inauguration Day.

As the United States hit 11.6 million COVID cases in mid-November, states including New Jersey, Washington, Michigan, and Iowa rolled out new restrictions. California halted its reopening plans, suspending indoor dining, fitness center workouts, and religious services. These restrictions are important safety measures, but the impact on small businesses — which employ 47.5% of the US workforce — could be devastating. 

Small business owners aren't sure what happens next

Suzanna Cameron, who owns a flower delivery business called Stems Brooklyn, has made numerous pivots in 2020, but now finds it impossible to plan for the next phase. "The uncertainty of event restrictions and shutdowns makes financial planning only 50% reliable, while in past years we could guarantee income. At this point, it feels like I have to operate on blind faith."

As COVID restrictions shrink some businesses and shut down others, winter weather will soon take away the outdoor options that have sustained many retailers, restaurants, and bars. 

Urban Body Pilates and Gyrotonic Studio in San Jose, California, went virtual in the spring and opened an outdoor space in its parking lot during the summer. "Now it's too cold for outdoor workouts, and mandated business closures keep changing," says owner Shannon Bynum-Adams. "It's incredibly costly to run a boutique studio right now between online class management, staff overhead, and the cleaning supplies for a 1,700-square-foot space."

Data from our company, Gusto, which works with 100,000 US small business customers, estimates a potential loss of 2.8 million of the jobs recovered since April due to winter weather alone. Historically underserved workers will be hit hardest: Black workers are projected to lose 140% of recovered jobs across Retail Trade and Leisure & Hospitality. Latinx workers are projected to lose 51% of recovered jobs in these industries, and women are projected to lose 76%.

Small businesses can't hold on until next year. Congress must act immediately to provide a new aid package that addresses small businesses' most urgent needs. Here are three specific areas the package must address. 

Extend PPP funds and tax credits to winter expenses like heaters.

As cold weather brings new expenses, small businesses shouldn't have to bear the burden alone. Without costly equipment like space heaters, tents and awnings, the outdoor options that have kept bars, restaurants and other businesses afloat won't be possible. 

The next aid package must provide tax credits and Payroll Protection Program (PPP) funds for these expenses. Small businesses that accessed PPP funding in the spring and summer must also be allowed to reapply for aid to cover new expenses. 

Fund testing and personal protective equipment (PPE) through forgivable loans and tax incentives.

It's not enough to help businesses keep staff on payroll. Congress must also help them keep staff and customers safe, especially during the current wave of COVID. Providing PPE like masks, gloves, face shields and disinfecting wipes is a major expense, and we're hearing from small business owners that they're struggling with the cost.

Federal aid must fund PPE through both forgivable loans and tax incentives. This equipment is essential for limiting the spread of COVID and is often mandated by law. Additionally, some states are now mandating COVID testing by employers — but putting the cost on small businesses. Business owners shouldn't be stuck footing the bill. 

Provide a general winter tax credit. 

A separate October survey, which has yet to be published, of Gusto's 100,000 US small business customers showed that 36% of owners have used personal funds to keep their business running as a result of COVID, while another 27% think they'll have to do so soon. These businesses are running on a fraction of their revenue with little to no cash reserves. Federal aid will be crucial to helping them survive the coming months, especially as the holiday revenue that many businesses rely on may not come. 

The next relief package must include a general winter tax credit for the hardest-hit seasonal businesses — for example, those that show at least a 30% reduction in gross receipts in winter 2020 relative to the same period in 2019. 

Helping small businesses should be everyone's priority

The fate of small businesses and the US economy are closely entwined. The country's 30.2 million small businesses employ nearly 60 million people. Targeted aid will safeguard jobs and help businesses provide the equipment and PPE necessary to keep employees and customers safe. The third wave of COVID and winter weather have already started, and the worst of the economic damage will happen in the coming months, well before Inauguration Day. Small businesses deserve a Congress that works together to provide aid immediately.

Lexi Reese is the COO of Gusto, the people platform that provides modern payroll, benefits, compliance, and expert HR to more than 100,000 small businesses across the U.S. She has spent her career advocating for small businesses at American Express, Google, and Accion International.

Jeanette Quick is Gusto's Lead Counsel for Financial Services. She is a widely recognized expert in fintech and financial services, and previously was Senior Counsel to the Senate Banking Committee, where she was the lead advisor on consumer finance, and Senior Attorney at the Office of the Comptroller of the Currency.