More than 100 current and former CEOs are urging Congress to approve another round of small business aid in the next coronavirus relief package or risk exponentially more harm to the economy.
Modifying and extending the small business lifeline Congress approves in the form of the Paycheck Protection Program (PPP) could stave off a potentially “catastrophic” wave of permanent small business closures that could hit as early as Labor Day. Already, many businesses have shut their doors for good after buckling under the strain of the coronavirus and government-mandated shutdowns.
“Small businesses are too critical to our country’s economic strength to let fail. From retailers and restaurants to consulting firms and manufacturers, small business owners are facing a future of potential financial ruin that will make the nation’s current economic downturn last years longer than it must,” the letter says, noting that small business composes 44% of the U.S. economy.
The business executives suggest that lawmakers build on the system put in place to distribute PPP funding by reupping the program while providing additional aid for the hardest hit sectors of the economy.
The letter lists several priorities for a new relief package:
- Federally guaranteed loans, at favorable terms, that will enable small businesses to transform and sustain themselves through 2020 and well into 2021. …
- Businesses should have flexibility in how loan funds are used.
- The hardest-hit businesses should be eligible for at least partial loan forgiveness. Any forgiveness should be limited to small or mid-sized firms that have suffered significant revenue declines and are not publicly traded.
- Relief needs to be delivered expeditiously. Building on the existing PPP infrastructure would be one way to quickly stand up a new loan program.
- These funds must flow to all small businesses in need, particularly those run by people of color, who have traditionally had less access to capital. …
“We cannot stress enough the urgent need to act. Every day that passes without a comprehensive recovery program makes recovery more difficult. By Labor Day, we foresee a wave of permanent closures if the right steps are not take soon,” the letter continues. “Allowing small businesses to fail will turn temporary job losses into permanent ones. By year end, the domino effect of losing jobs – as well as the lost services and lost products that small businesses provide – could be catastrophic.”
Lawmakers in Congress with input from the White House are trying to craft a fifth round of coronavirus aid as boosted unemployment benefits are set to expire by the end of the week. Democrats want a bill that would balloon spending by an additional $3.5 trillion while creating a safety net for cities and states that have blown out their own budgets responding to the coronavirus as tax proceeds have dried up.
Republicans on Capitol Hill want a much more restrained yet still pricey $1 trillion in additional spending, reducing the federal boost to unemployment from $600/week to $200/week through September, then reducing it to 70% of a worker’s lost income when combined with state benefits.