There’s no question small businesses across the nation are getting creamed in the midst of the China-originated novel coronavirus scare. With statewide shutdowns and directed limitations on operational hours, unemployment claims have spiked and employers are struggling to keep their heads above water, at no fault of their own.
Working alongside Sens. Susan Collins (R-MI) and Lamar Alexander (R-TN), Sen. Marco Rubio (R-FL), chairman of the Small Business and Entrepreneurship Committee, has outlined $300 billion in relief for such businesses via a federal relief package expected to be signed by President Donald Trump as early as Monday.
Rubio’s provisions would allow small businesses with fewer than 500 employees access to cash-flow through 100% federally guaranteed loans. If employers maintain their payroll until June 30, 2020, the loans would be forgiven, effectively making them grants.
If small businesses have already experienced worker losses due to the crisis – states like New York and California have already shuttered businesses by mandate – employers can still be eligible for the loan assistance by rehiring employees they lost as of March 1: “This proposal would be retroactive to March 1, 2020, to help bring workers who may have already been laid off back onto payrolls,” guidance from the senator’s office outlines.
Here are some of the key provisions small business owners need to know:
-Loans would be immediately available through existing Small Business Administration-certified lenders, including banks, credit unions, and other financial institutions, and SBA would be required to streamline the process to bring additional lenders into the program.
-The Secretary of Treasury would be authorized to expedite the addition of new lenders and make further enhancements to expedite delivery of capital to small employers.
-The size of the loans would be tied to an applicant’s average monthly payroll; mortgage, rent, and utility payments; and other debt obligations over the previous year. The maximum loan amount would be $10 million.
-Conditional upon business retaining their employees and payroll levels during the covered period (March 1, 2020, through June 30, 2020), the portion of the loan used to cover payroll and payments on pre-existing debt would be forgiven. Further, employers with tipped employees would receive forgiveness for additional wages paid to such employees during the covered time.
As noted by the Miami Herald, Rubio’s small business relief plan has essentially evaded criticism and is not expected to be changed before landing on President Trump’s desk.
“The economic uncertainty and potential global impact we are facing due to the coronavirus pandemic are unprecedented,” the Republican said in a statement, according to the Miami Herald.
“America’s more than 30 million small businesses — and the 59.9 million individuals they employ — today face the prospect of going bankrupt,” Rubio continued. “They face this threat due to no fault of their own, but because of a global pandemic that takes human lives and grinds productivity to a halt. Congress must set aside our normal procedural and partisan games to act without delay.”
Small businesses “don’t have a few weeks before they run out of operating cash,” the senator emphasized via Twitter on Friday. “They are (often tearfully) laying off workers all over the country, by the minute because they have no choice.”
“Small/mid-size business owners are also employees themselves,” he noted. “The trauma this is inflicting on them, their employees and our country is severe. We don’t have the luxury of days to kick around ideas or try to one-up each other. We need to reach agreement and act now.”
Small/mid size business owners are also employees themselves. The trauma this is inflicting on them,their employees & our country is severe.
We don’t have the luxury of days to kick around ideas or try to one-up each other. We need to reach agreement & act now. 5/5
— Marco Rubio (@marcorubio) March 20, 2020