BY MARY KATHRYN DAIGLE
Earlier this year, everything changed for small businesses across the country. The public health crisis brought on by COVID-19 required an intentional slowdown of the economy to slow the spread of the virus. Restaurants, gyms, and countless other small businesses closed their doors. Some have slowly begun to re-open, others remain shuttered.
Seeking help in the crisis, millions of small business owners applied for a loan through the Small Business Administration’s Paycheck Protection Program (PPP). While the PPP application process was difficult for many to navigate, receiving the loan wasn’t even a possibility for many small business owners. Entrepreneurs with a felony record within the last five years were deemed ineligible for the PPP. For many returning citizens who are entrepreneurs, they had to fight to keep their business afloat without federal aid.
COVID-19 LEGISLATION, SMALL BUSINESSES, AND RETURNING CITIZENS
On March 19, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a historic emergency relief package designed to mitigate financial hardship for individuals, families, and businesses. The legislation made Small Business Administration (SBA) loans available through the Paycheck Protection Program, which provides loans for small businesses and nonprofits, including houses of worship. A policy brief by the Center for Public Justice explains:
The Paycheck Protection Program offers forgivable loans to be used for payroll, mortgage interest, rent and utilities. These programs are available to small employers (500 or fewer employees). Loans are to be made by banks approved for the SBA’s 7(a) small business loan program. Unlike grants provided to deliver government-specified services, these loans seem purposed toward maintaining a community’s institutions and workers.
When Congress announced the PPP, many small business owners breathed a sigh of relief, anticipating government assistance to help keep their employees on the payroll. However, this provision of the CARES Act left out an important population: small business owners convicted of a felony within the last five years.
For four months, businesses owned by returning citizens with a felony record have gone without necessary financial relief. This lack of funds affects the business owners, their employees, and the communities of which they are a part.
In the time since the initial guidance was released, returning citizens and advocates have called for legislation or new guidance that would enable small business owners with a felony on their record to apply for PPP loans. The flourishing of businesses run and operated by formerly incarcerated men and women translates to increased employment opportunities, economic growth, and lower recidivism rates.
A PUBLIC JUSTICE RESPONSE
The Role of Government
As we continue to navigate economic hardship brought on by COVID-19, public justice requires government and civil society to support the flourishing of small business owners who contribute to the fabric of our local communities and economies. Government has a responsibility to promote policies that contribute to justice. In this case, government should orient its work around restorative justice (re-integrating a returning citizen) instead of retributive justice (punishing a returning citizen). Policies should be developed that both reduce the barriers to PPP loans and effectively address the hardships that many small businesses will continue to experience.
As Heather Rice-Minus, Vice President of Government Affairs and Church Mobilization at Prison Fellowship, said in a statement,
Second chance entrepreneurs who have already paid their debt to society were intended to be included in financial relief under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). It’s unfortunate that the Treasury Department rule penalizes those with criminal records who are… building a new life. All persons bear the image of God and deserve the dignity of a second chance.
While the Treasury Department reduced some of these barriers through independent actions throughout June, the criteria still currently exclude people whose prior convictions have nothing to do with financial crimes.
In June, Senators Rob Portman (R-OH), Ben Cardin (D-MD), and Cory Booker (D-NJ) introduced the Paycheck Protection Program Second Chance Act, which would change restrictions to exclude only those who are currently incarcerated, or who have recent financial fraud convictions from receiving PPP loans. Under this legislation, the SBA could waive the restriction for those who committed a financial fraud felony, but are now in good standing.
New guidance from the SBA and Treasury Department, advocacy work from both nonprofits and personally impacted formerly incarcerated entrepreneurs, as well as policy initiatives of elected officials are all positive steps, yet more must be done to support returning citizens during the pandemic.
The Role of Civil Society
While government has an important role to play, public justice recognizes that government alone cannot address the varied needs of returning citizens, including entrepreneurs. Civil society institutions, including businesses, secular and faith-based nonprofits, families, and houses of worship should think creatively about the ways they can support small businesses run by returning citizens and their employees. As a Forbes article by Kenny Hannon points out, there has been a rally to the aid of small businesses, from communities faithfully spending at the local corner bakery to banks waiving certain fees for small business customers. While championing small businesses, civil society institutions should be intentional about promoting formerly incarcerated peoples’ small businesses in particular.
Nonprofits like Prison Fellowship, Sisters Returning Home, and Refoundry support returning citizens. They provide mentoring, training, as well as advocacy work, calling for decreased barriers to employment, substantive police reforms, and an increase in funding for reentry programs.
Businesses can form partnerships with a returning citizen’s small businesses, refer their clientele to their services, or make donations. Especially during this time of economic crisis when unemployment numbers are at record highs, employers should also reexamine their hiring practices and remove unnecessary barriers to employment for returning citizens.
Individuals and families also have a role to play through their economic decisions. Supporting the businesses of formerly incarcerated people keep business running, even in the midst of a coronavirus economy. While complex government programs and business partnerships can do a great deal, the power of a simple transaction between a buyer and seller cannot be overlooked.
““We follow the first century Jew who cared for those cast aside and offered second chances to sinners. Therefore, to live like Jesus in our modern context, we must open our eyes to see the struggles of returning citizen small business owners and stand for second chances.”
In addition to government and other civil society institutions, the Church must also be present in this space. We follow the first century Jew who cared for those cast aside and offered second chances to sinners. Therefore, to live like Jesus in our modern context, we must open our eyes to see the struggles of returning citizen small business owners and stand for second chances.
Part of championing second chances means we stand for access to employment. As people of faith, we know that work is a source of human dignity. As Pope Francis says in the Encyclical Letter, On Care for Our Common Home, humans were “created with a vocation to work.” He stresses the necessity of work, as it is “part of the meaning of life on this earth, a path to growth, human development and personal fulfillment.” Work confers dignity to a person. When we do it, we image Christ who is always at work with the Father (John 5:17). A theology of work explains why unemployment stings so much: more being than financially troubling, life without work degrades our humanity. Because of this reality, the barriers to returning citizens finding meaningful work should be eliminated. If we believe in second chances, we must defend work that reflects the dignity of returning citizens.
Practically, the Church should be vocal in its support of returning citizens and their families. Many churches already have ministries for those in prison or for those who have recently returned from prison. Being attentive to the diverse needs of returning citizens and their families during COVID-19 is of utmost importance, and one dimension of this includes support of those who own and operate small businesses. The Church can come alongside these men and women, offering not only financial support, but care for emotional, mental, and spiritual needs of entrepreneurs during this especially difficult time.
COVID-19 presents unprecedented challenges for small business owners and their employees. With the PPP, lawmakers indicated their commitment to trying to sustain this sector, yet this important program left out many small business owners with a criminal record. We should continue to advocate for policies that support returning citizens and their businesses during this time of crisis. Civil society can also contribute to this work and support the livelihoods of returning citizens, and by so doing provide for their employees and their business’ contribution to the flourishing of the community.
Mary Kathryn Daigle was an intern for Shared Justice in the summer of 2020. Growing up and witnessing modern social issues housed in historic victorian homes on Pittsburgh’s Northside fuel her passion for history and political science. She currently studies these disciplines at Wheaton College in Illinois and plans to graduate in May, 2021.
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