Congress needs to expand $349B small business bailout program
Let’s face it: Some of the small businesses that have been forced to close are not going to recover from the shock of Gov. Charlie Baker’s order to close all non-essential businesses, as part of the global effort to stem the spread of the coronavirus. But others, given a lifeline, can have a fighting chance to make it through to the other side.
That lifeline remains the U.S. Small Business Administration’s $349-billion Payroll Protection Plan, which offers loans to pay the bulk of a company’s payroll for eight weeks. Yes, there are some details you have to sort through as to what qualifies, but the loans are largely forgivable, and no business owner must offer a personal guarantee or put up any collateral to qualify. With employees on the payroll, it’s a no-brainer for a business owner or nonprofit running short on cash. Congress passed this program into law less than two weeks ago as part of the $2-trillion coronavirus economic stimulus package. After a very rough start to its implementation, the program saw the approval of $190 billion in loans in the first four days. While another $160 billion is still in the tank, the backlog banks and credit unions are processing will likely run out soon. If you’re a small business owner who has not done your homework yet on this funding, get on your horse today. Call the bank you do business with and ask them how to apply, visit the SBA website or click on the WBJ events page on our website where you can watch two different webcasts explaining how the program works. But most of all, act now.
As businesses desperately need this funding to stay afloat in the coronavirus crisis, Congress must work together to bolster the program, as $349 billion clearly will not be enough. The Senate considered legislation on April 9 to add $250 billion to this pot, but the measure wasn’t immediately approved as Congress technically wasn’t in session and the usual partisan bickering got in the way. As Congress works on the details of another stimulus package, we urge this money be included. In fact, it is appearing increasingly likely eight weeks of payroll loan forgiveness won’t be enough for small businesses to stay afloat, since the efforts to stop the spread of coronavirus are already extending into summer.
Keeping workers employed is a much better alternative than an increase to the already massive jump in employment: about 17 million nationwide in the last three weeks, including 470,000 in Massachusetts. By keeping their existing workforces, companies are better positioned to recover from this economic crisis, and those workers maintain their salaries and benefits in contributing to the economy. As much as this is a no-brainer for businesses to apply for the program, it should be a no-brainer for Congress to continue the program for as long as social distancing is a necessary evil to stop the coronavirus.
But businesses in need shouldn’t wait on Congress to do the right thing, especially as each passing bill increases the likelihood these stimulus efforts will fall back to the partisan quagmire Washington, D.C., has become. There is still money left. Local bankers who have been administering the applications through the overtaxed SBA system have been working 15-hour-plus days, as the pressure to help clients access this funding has been immense. The window is still open to receive this very favorable funding. If you have not yet applied, don’t delay any longer.
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