The pandemic has raised questions about certain words and what exactly is meant when they are used. Take “small business.” When I think of small businesses, what comes to mind is Liz Grant’s acupuncture practice and Laura Davis’s Cosmos Catering.
Paul Benson reports this week that 465 Outer Cape businesses received a total of more than $32 million in disaster loans through the Small Business Administration. That’s good news, but the truth is things could’ve been much better. The same lawsuit brought by news organizations that forced the government to report those numbers showed that most of the money supposedly directed at “small business” went to large corporations. Overall, the biggest 5 percent of grantees got more than 50 percent of the funds.
I wondered, how big can you be and still be considered “small” by the SBA? I tried looking this up, and discovered that small businesses are “privately owned corporations, partnerships, or sole proprietorships that have less revenue than larger businesses.” Looking further, I found that “a small business is one that has fewer than 1,500 employees and a maximum of $38.5 million in average annual receipts.” That sounded pretty big.
Then I read Dylan Sloan’s story in this week’s Indie about how the owners of the Dunkin’ franchise in Wellfleet want to put in a drive-through window, a plan that was shot down by neighborhood opposition several years ago. Is Dunkin’ a “small business”?
Neal Faulkner of Boston, one of two owners of the Wellfleet store (and 27 other Dunkin’ franchises), thinks so. “We’re a little mom-and-pop business,” he told our reporter. “We just happen to have ‘Dunkin’ ’ on the building.”
Fast-food franchisees gobbled up more than $1 billion in the SBA’s Paycheck Protection Program — money that was supposedly designated to help the real mom-and-pop outfits. “Franchisees with hundreds of restaurants flew under the radar, in one case collecting $60 million in PPP loans,” wrote H. Claire Brown and Jessica Fu in The Counter this week. “Relief grants meant to buoy small businesses at the onset of the pandemic were largely absorbed by some of the nation’s biggest franchises.”
How could that happen? The big boys lobbied the SBA to include restaurant chains and franchisees in the PPP, and a giant loophole was created: they were deemed “small” as long as they didn’t employ more than 500 people at any one location.
The Counter’s investigation also found that fast-food chains have largely rebounded since the pandemic began. Meanwhile, “smaller restaurants have not shared in that success,” they wrote.
Here on the Outer Cape, almost every business is truly small — too small to hire the lobbyists who make the rules that too often put them out of business.