PPP left many small businesses behind. Next stimulus cannot do the same.

As legislators debate another coronavirus relief package, they must include three components: one stimulus directed toward small businesses, another for individuals and a third that makes bank regulation part of the solution, rather than part of the problem.

If these components are part of a new stimulus package, small businesses still standing will have a fighting chance.

Many small-business owners foresee the oncoming train of lockdowns in the winter months as the COVID-19 pandemic continues to increase. However, there is renewed hope that life can return to normalcy by the end of next summer as several vaccination options are expected to be distributed in the coming months. The only problem is that many small businesses will have shuttered by then.

The situation is all the more tragic since big-box retailers and ecommerce giants such as Amazon, Google, Walmart, Costco and Target have actually thrived in the pandemic while many storefront smaller competitors were forced into government shutdowns.

Small businesses need a rescue package tailored specifically to them to survive. It would possess similarities to the Paycheck Protection Program (PPP) in that it could be administered by the U.S. Small Business Administration, but would be hyperfocused on those small companies in dire need of aid.

Rather than the PPP’s $10 million limit in forgivable lending, the cap could be set $1 million. Further, rather than cover nearly every business, a new program could apply to specific industries such as retail, personal services, fitness centers, restaurants, transportation and tour services, entertainment and the like.

These businesses could apply for loans based on a three-month average of 2019 expenses to get help going again. The loan amount could be forgiven based on every dollar spent for buying new supplies, repair costs, opening expenses, and 50% of all salaries and benefits for workers earning less than $100,000 annually who are rehired or continue to be employed, and 75% for any new hires. Expenses toward forgiveness could be claimed from either July 1, 2021, or the time of reopening, whichever comes first, until the end of 2021.

Like the PPP, banks and other providers could serve as intermediaries. The SBA could pay a 3% fee on loans up to the first $500,000, and 1.5% on amounts up to the second $500,000.

Rather than have this be a footrace due to limited appropriations, any compliant applications tendered during the period should be funded. This hyperfocused relief program could be offered in addition to current proposals for a modified PPP to push the economy through the winter recession.

For individuals, the next stimulus package could include enhanced unemployment payments. As of last week, lawmakers were considering a package to provide an additional $300 per week unemployment stimulus, compared to the additional $600 per week previously offered through July.

The reality is for several months, those who are truly in need of the funds have been getting zero extra dollars, which can’t continue if Congress wants to restore the U.S. economy quickly.

Finally, with regard to the role of the banks, the next package could enable financial institutions to take a greater part in the solution. The loan forbearance provisions in the first stimulus package could be extended throughout 2021.

Even with a vaccine, many businesses that provide large gatherings and entertainment venues may not resume until late 2021. There should be a provision that allows banks to defer interest and make other changes to loans without running into regulatory or accounting barriers.

The current forbearance provision expires at the end of 2020. But with a jump in COVID-19 cases and an expected bad winter, banks still need the flexibility to work anew with borrowers rather than forcing people into default. Without costing the government a penny, this provision can prevent companies — especially small businesses — from filing bankruptcy.

Before the pandemic, small and medium-sized businesses accounted for more than 60% of net new jobs in the U.S. through 2016. On the heels of COVID-19, that number will fall precipitously ecommerce giants have made significant gains partly driven by stay-at-home orders. After this crisis is over, government at all levels must protect small businesses from closures and consolidation.

It is hard to walk a single block in New York City now without seeing at least two, and more often, three stores closed. Small retailers and restaurants provide the alchemy that transforms residential districts into communities. These businesses often provide the first job for many young people, and teach the social skills for success and entrepreneurship.

Neighborhood stores are the first pillar of our collective social capital. A relief program specifically designed to bring resurgence to these neighborhood businesses is the right solution as part of a much-needed new stimulus program.