Womply, one of the fastest-growing and leading provider of data and software company in the U.S which provides software and API to the small businesses, is now working towards making direct contact with government leaders, policymakers and private technology companies in order to start a program that will support the crashing income of small businesses in the country.
The company was found in 2011 and its mission is to help small businesses thrive in the digital world.
According to recent research, it has been observed that given the current public status of the country, small businesses are facing great destruction in their income. This is because due to the recent outbreak of COVID-19, the consumers of goods and services of the small businesses chose to stay home in order to maintain social distancing. Hence, the majority of the businesses have little or no financial help left and are on the verge of closing.
The Founder and CEO of Womply Toby Scammell stated that small businesses are the lifeblood of the American economy, however, with preventive measures being practiced by the citizens and consumers restricting themselves to home in order to avoid the spread of COVID-19, the businesses will soon be shut.
After considering the economic status of these businesses and their effect on the economy of the country, Womply has framed a plan that includes immediate initiatives by the Government to fund grants or loans in terms of cash to the businesses. This action is taken by Womply on behalf of all the small businesses in order to save the Country’s economy as according to Scammell these companies have days and not even weeks to shut down.
Cash Stimulus to U.S. Small Businesses
Small businesses are responsible for nearly half of U.S gross domestic product and employment but are now at risk due to the drop in their revenue caused by the social distancing factor which is an outcome of the COVID-19 outbreak.
A research analysis carried out by the company showed that the income of these businesses started falling from March 11 onwards and show no signs of improvement since and according to a survey, it was studied that 1 out of 5 small businesses in the U.S will shut down within 30 days of sales stopped.
“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. COVID-19 has caused an economic crisis which has never been seen in American history before”
The plan by Womply which will fund small businesses was framed in order to achieve a quick and targeted response. The public and private sectors both have come up with different solutions to the problem and a more targeted action with good coordination which gives desirable outcomes is preferred.
In order to make the plan work as soon as possible, the Congress, the White House, federal and state agencies, governors, state lawmakers, and industry groups were called upon to partner with the fintech industry to get working capital to small businesses.
However, the company’s plan is to involve federal and government with them providing direct stimulus funding which can immediately be used by the businesses for their existing financial technologies infrastructure such as merchant accounts and card networks.
The logistical details are still being developed. However the overall plan will look as follows:
1)Average daily sales will be calculated for every merchant account in America from 1 December 2019- 29 February 2020 by Financial services partner.
2)Using the private infrastructure that already exists, the government will deposit the average daily sales amount in the banking account of the business. This will be done each day until the financial crisis is over.
3) Once the crisis is over, the government can make a daily withdrawal equal to a previous day’s sale like for e.g 5% until the money is paid back. This can be done once the businesses recover and the payments can be awarded as grants or loans.
Scammell added that the government will have a direct stake in the success of every small business in America and that it would be a low risk ,much faster option which would guarantee better results than current public and private options for small businesses trying to face and survive the biggest public health and economic crisis ever seen.