Womply, a software and API company serving small businesses and app developers, today called on American lawmakers and policymakers to partner with the financial technology sector to offer direct cash stimulus to U.S. small businesses at high risk due to the COVID-19 outbreak.
“America’s small businesses are the lifeblood of our economy, and they’re on the brink of shutting down as consumers stay home to limit the spread of coronavirus,” says Womply founder and CEO Toby Scammell. “We need a swift and targeted response. These businesses have days, not weeks, before they start shutting down for good.
“The private and public sectors have rolled out many disparate initiatives but we urgently need a more targeted and coordinated solution. We’re calling on Congress, the White House, federal and state agencies, governors, state lawmakers, and industry groups to partner with the fintech industry to get working capital to small businesses as soon as possible.”
Small businesses account for nearly half of U.S. gross domestic product and employment. These firms are especially vulnerable to cash stoppages, which makes the social distancing aspect of the COVID-19 response so hard on them.
Womply data analysis shows that small business revenue started plummeting across nearly every category around March 11 and shows no signs of improving. A Womply survey revealed that 1 in 5 American small businesses would shut down within 30 days if sales stopped, which is now a reality for many.
“COVID-19 has caused an economic crisis unlike any in American history,” Scammell says. “Even during the Great Depression, businesses were open and selling their goods and services. Now many are completely closed and generating no sales. In a way, the coronavirus is having a Hurricane Katrina-like impact on small, local businesses across the country.”
Womply’s plan calls for federal and state governments to approve direct stimulus funding for small businesses. Those funds can be immediately routed to businesses by leveraging existing financial technology infrastructure, such as merchant accounts and card networks.
While logistical details are still in development, the overall plan would work as follows:
- Financial services partners would calculate average daily sales for every merchant account in America from December 1, 2019 to February 29, 2020.
- Each day until the financial crisis is over, the government would deposit the average daily sales amount into the business bank account—using private infrastructure that already exists.
- When the financial crisis is over and businesses recover, the government can make a daily withdrawal equal to a small percentage of the prior day’s sales—say 5%—until the money is paid back. The payments can be awarded as grants or loans.
“The government will have a direct stake in the success of every small business in America,” Scammell says. “This would be lower-risk, more auditable, and—critically—much faster than current public and private options for small businesses trying to weather the biggest public health and economic crisis in our lifetime.”
Womply is working to make direct contact with government leaders, policymakers, and private technology companies to facilitate this program on behalf of small businesses. To get involved, email us at email@example.com.
Womply’s mission is to help small businesses thrive in a digital world. Founded in 2011, Womply is the leading provider of data and software to local businesses and the top software partner to the payments industry. Our AI-powered data platform powers our CRM and marketing software, which serves more than 450,000 small businesses in every corner of America. In addition, Womply’s data platform helps innovative developers create more powerful software for businesses and consumers alike. To learn more, visit www.womply.com or email firstname.lastname@example.org.