A 'startup depression' is the economic blow no one's talking about. Here's the plan two economic experts proposed for the government to take action and save our small businesses.

• Most small businesses lack the cash reserves to weather a month-long interruption, and a forecasts indicate that more than 2 million workers are already losing their jobs as a result of the coronavirus pandemic.
• John Lettieri, President and CEO of the Economic Innovation Group, told Business Insider that the economic situation "has the perfect storm of conditions for cratering a huge portion of the American small business community."
• Lettieri and Upwork's chief economist Adam Ozimek coauthored a plan they say should guide Congress' next COVID-19 relief legislation, and that time is running out to save Main Street businesses and avert a "startup depression."
• Visit BI Prime for more stories.

It's been said before, but it bears repeating: More than 99% of all businesses are small businesses, and they employ roughly half of the US workforce.

But as the coronavirus pandemic causes gut-churning market drops on Wall Street, Main Street businesses are bearing the real-time brunt of the emergency measures that cities and states are taking in order to save peoples' lives.

Most small businesses lack the cash reserves to weather a month's interruption, according to the JPMorgan Chase Institute, and the clock is ticking. A recent forecast from Goldman Sachs indicates that more than 2 million workers are losing their jobs this week alone.

"This is going to trigger a once-in-a-hundred-year event that has the perfect storm of conditions for cratering a huge portion of the American small business community," said John Lettieri, the president and CEO of the Economic Innovation Group, in an interview with Business Insider.

The EIG is a bipartisan public policy organization, and was a driving force behind the creation of the Opportunity Zone program in the 2017 tax law overhaul.

After the administration of President Donald Trump spent months downplaying the seriousness of the COVID-19 threat, city and state officials across the US are now forced to suddenly close all nonessential businesses and services in order to slow the spread of the contagion.

"By the very nature of this crisis, we need these businesses to shut down," Lettieri said. "The next step of that has to be giving them the resiliency to weather the storm so that they can snap back once the crisis is over."

Lettieri outlined those next steps in a plan he coauthored with Dr. Adam Ozimek, chief economist for the freelancer staffing agency Upwork.

According to estimates from the Tax Foundation in Washington, the latest $1 trillion package proposed by Senate Republicans would provide $300 million for small businesses, and would provide bridge loans of up to $10 million.

While that number does exceed the $5 million that Lettieri and Ozimek call for, the terms of those loans could prove to be more important than their size.

In their plan, Lettieri and Ozimek say Congress needs to think beyond just providing cash relief, and focus on helping ensuring that small independent businesses remain worth keeping open after the immediate emergency abates.

Not only would the program help ward off some of the worst impacts of business closures and job losses, a commitment of resources now could have numerous positive knock-on effects.

"The proposal that we've put out there would allow these businesses to continue to invest, and they kind of become distributors of their own in the economy," he said. "There's a number of things that the business can do to actually become better on the other side of the crisis rather than just mothball and ask for the best."

And it's not only existing businesses at risk here, but future ones as well.

"The Great Recession did lasting and severe damage to new business formation," Lettieri said. "So new businesses, the ones that grow and scale up, they're the big job creators every year. They account for most of US net job creation year over year. It's not the large businesses, it's actually the new ones."

He added: "We have the conditions for a startup depression coming out of what we're seeing now."

Each day that goes by without a plan from Congress or action from the White House forces still more small businesses to fire workers and close up for good, Lettieri said.

"The terrifying part now is that every day that goes by that we don't have something like this plan, another cohort of businesses is failing," he said. "Time is really of the essence."