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Gusto COO Lexi Reese on the push to forgive small business loans amid pandemic

Gusto COO Lexi Reese on the push to forgive small business loans amid pandemic

Gusto COO Lexi Reese on the push to forgive small business loans amid pandemic
Feb 19, 2021 4 mins, 27 secs

In this episode of Facing Forward, Margaret Brennan talks with Lexi Reese to talk about the state of small business in America during the COVID-19 pandemic.

MARGARET BRENNAN: Lexi Reese, it's great to have you on the podcast.

MARGARET BRENNAN: So I think one of the most interesting things about you is- is what you did before your current job.

Then you went to business school, and now you're the chief operating officer of a company that, you know, helps other small businesses get their employees paychecks and the taxes paid and all that.

I, you know, Gusto where I am today that helps small businesses pay, provide health insurance and financial benefits to their employees, is- is kind of the culmination of all these chapters.I have been- I've spent my life in pursuit of how do you give opportunities and access to capital, to small business owners and the people that rely on them.

MARGARET BRENNAN: I love that connecting the dots to- to show how finance is kind of the lifeblood of getting businesses going.

MARGARET BRENNAN: It was a bumpy rollout, but it was a very popular program.

We have at Gusto talked to 1100 small businesses about this weird dynamic that's happening right now where Congress says, well we made the aid available, the second round still has 65% of the allotment not taken by small businesses.

MARGARET BRENNAN: So for eligibility, you have to show what you got, a 25% decline in your revenue year over year.

MARGARET BRENNAN: Because their costs had gone up.

MARGARET BRENNAN: --than what it looked like on paper.

Tons of businesses, nearly one in four business owners who have not applied for loans in round two, is because they haven't had their first loans forgiven.--.

MARGARET BRENNAN: So I was speaking in the spring to a very prominent economist who said, look, like, this is good we're doing programs like this for small businesses.

I mean, I know you like this program, but what's the counterargument to that idea that taxpayers should keep subsidizing small businesses, if you're saying the program is flawed anyhow.

MARGARET BRENNAN: We continue to hear from the administration in particular that there is just this mass exodus of women, in particular from the workforce.

This week she said, you know, it's small businesses in particular that are closing and hurting women.

Last February, around 5 million women were business owners and 2 months later, by April, 1 in 4 had closed their doors.

So, my first week in office I spoke with a group of small business owners, many of whom are women.

I mean, are they truly seeing this exodus of women in small business in particular.

MARGARET BRENNAN: What are you seeing in terms of how small businesses are impacted along racial lines.

MARGARET BRENNAN: But you know that the businesses are asking for the loans to be forgiven.

MARGARET BRENNAN: All right, we're going to take a quick break.

MARGARET BRENNAN: One of the things that is also being talked about right now that would impact small businesses is this debate over the federal minimum wage, which hasn't been increased in a decade.

MARGARET BRENNAN: So that was President Biden saying that if you gradually increase the minimum wage along these lines that he laid out that it would offset any concern small business owners might have.

Is that what the small business owners you work with think.

And small business owners generally want to help their employees not just survive, but thrive.

If we just talk about really taking a holistic view, for small business owners to be able to do it, one, they need to stay in business.

Because if you added that in right now from a tops-down approach, small business owners would say, are you guys not getting it.

MARGARET BRENNAN: Right.

A small business that's just struggling right now anyhow can't afford to do this--.

MARGARET BRENNAN: --as well intended as it is-- .

The pandemic hit, Melissa shifts her focus from growing her revenue to ensuring, as many small business owners do, that every single one of her employees remained on payroll.

MARGARET BRENNAN: Right.

But I've also had conversations with lawmakers, with Republican women who are pro-family, who are pro-business, who say the reason they oppose some of these proposals is because small business owners cannot afford it.

And small business owners want to be able to insure their health- their employees with health benefits, with financial benefits and with child care, because that makes for a thriving workplace and hence a thriving economy

Small businesses know how to make tradeoffs to pay for taking care of their employees

MARGARET BREENAN: So what you're saying is it's really up to whether the business owner wants to do it or not and make it a priority

So I think, you know look, work- women and working moms leaving the workforce is an epidemic in its own right

MARGARET BRENNAN: And then it's figuring out how taxpayers pay for it or offset it as well

If we can help make sure that the access to capital that the PPP provides is- remains accessible to all business owners, including those who are underrepresented- women and across Black and Latin-X workers across genders

MARGARET BRENNAN: All right, Lexi Reese, Chief Operating Officer of Gusto, thank you for your insights

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