An Open Letter to the Incoming U.S. Administration

The past 10 months of compounded crises – from the pandemic to the trade wars, and natural disasters – eroded the gains of the last 10 years and flattened the curve of opportunity, especially for the entrepreneurs that had ambitions of fast-paced growth.

While short-term relief packages are immediate stopgaps to stemming the flood of unemployment, small and midsize businesses – accounting for more than 90% of our nation’s businesses – continue to suffer, living day by day and relief check to relief check.

Dun & Bradstreet stands ready to support the incoming administration with the data and analytic insights they need to build targeted relief and long-term recovery programs that will have the most impactful and lasting effect on the small business community – the backbone of our economy.  

Based on analysis of previous Coronavirus Aid, Relief, and Economic Security Act (CARES Act) relief programs, Dun & Bradstreet recommends:

Action 1: Target economic sectors that use the assistance the most effectively, including women and minority-owned businesses.

One of the most powerful indicators of business recovery is payment delinquency rates. The number of jobs saved per dollar spent is also a critical metric. An initial analysis of these indicators shows that the first round of Paycheck Protection Program (PPP) and Economic Injury Disaster Loans (EIDL) provided the most significant impact in the following areas:

  • Businesses with five (5) to nine (9) employees saved the most jobs, 112 per $1 million in assistance. By contrast, businesses with 50-plus employees retained only 76 jobs per $1 million.
  • Women and minority-owned businesses that received PPP assistance demonstrated the most significant reductions in severe payment delinquency rates at 11% and 13% respectively. Comparable businesses that did not receive assistance had severe payment delinquency rates of 19% and 20% respectively.
  • The retail industry – with its low wage structure – fared very well when given assistance. Those businesses that received PPP funding demonstrated a 5.3% severe payment delinquency rate, compared to a 10% severe delinquency rate for retail businesses that did not receive assistance. By comparison, businesses in the mining industry featured the highest post-assistance payment delinquency rate of 12%.

Data science and analytic insights clearly indicate that federal aid is having the greatest impact when targeted at these three key areas:

  1. Small businesses in the hard-hit retail sector, followed closely by the hospitality and transportation sectors;
  2. Under-served businesses across all sectors, particularly those owned by minorities and women;
  3. The smallest businesses.

Action 2: Tighten the reins to validate companies or continue to lose billions of taxpayers’ dollars to fraud

After examining a representative sample of $5.7 billion in PPP and EIDL loans, our certified fraud examiners found that:

  • At least $1.1 billion was granted to entities whose financial signals, including credit worthiness and operational activity, were unstable, suggesting that the business was potentially closed,
  • Another $504 million of these loans went to businesses that were victims of identity theft.

In order to prevent waste, fraud, and abuse, it is critical that immediate actions are taken to tighten the reins on policy and procedures to qualify companies before they are given assistance. Key considerations include:

  1. Validating businesses’ information, including address, phone number, ownership and website address;
  2. Verifying the businesses’ financial health and credit worthiness;
  3. Determining whether the business leaders and other business entities to which they are linked are equally reputable;
  4. Triangulating business data with other government portals, including the Treasury’s ‘Do Not Pay’ portal.

As one of the founding companies of the American enterprise, Dun & Bradstreet tracks the financial health of hundreds of millions of businesses worldwide –  public and private, big and small. We are already working with the Federal Emergency Management Agency, the Small Business Administration, the Department of Veterans Affairs, and the Federal Reserve Bank to make our data and analytics available for the greater good. We stand ready to help support the creation of the targeted interventions needed to help our economy and our people build back for a better tomorrow.

I look forward to a productive conversation about how Dun & Bradstreet can support our leaders’ efforts.


Dr. Stephen C. Daffron
Dun & Bradstreet