The Paycheck Safety Program (PPP) has helped many companies climate the COVID-19 pandemic, however many have been misplaced alongside the way in which. A Nationwide Bureau of Financial Analysis survey discovered that 22% of small companies have closed due to coronavirus and women- and minority-owned companies have been hit even tougher. Many homeowners whose companies are nonetheless open say they’re anxious about their survival if they don’t obtain monetary assist to make it by the winter months, however a bipartisan invoice within the Senate might deal with that dilemma.
Final week, I hosted a webinar with Senator Michael Bennet [D-CO] and Starbucks Founder and Chairman Emeritus Howard Schultz on S. 3814, the Reviving the Financial system Sustainably In direction of A Restoration in 2020 (RESTART) Act. The laws, sponsored by Bennet and Senator Todd Younger [R-IN], extends PPP, creates new loan applications, and has 55 cosponsors within the Senate. Schultz has additionally led an effort that has resulted in 8,700 enterprise house owners signing a letter in assist of the invoice.
“In 1987, Starbucks was a small business. I knew what it meant not to be able to make payroll. I knew what it meant to try and just do everything we possibly could, fighting passionately as young entrepreneurs to save our business,” Schultz stated on the webinar. “And we didn’t have the challenge of COVID. We were just trying to make it through.”
Sen. Bennet additionally has a background in enterprise. In between his stints in public service, he labored for an funding firm in Denver, the place he helped with the consolidation of three movie show chains into the Regal Leisure Group, the second-largest movie show firm within the U.S. His joint introduction of the RESTART Act with Sen. Younger is predicated on that have and the firsthand accounts of enterprise house owners in his state.
“I just spent the last several weeks during the August recess visiting with these business owners across Colorado,” stated Bennet. “Several of these meetings ended in tears because they don’t know how they are going to pay their workers or stay in business when the winter months hit.”
The RESTART Act is designed to guard these companies by quite a few avenues. The invoice extends PPP loans for 16 weeks to make use of the funds if the recipient has lower than 500 full-time staff and has suffered a minimum of a 25% decline in income. The recipient can use the loan to cowl payroll prices, hire, utilities, and private protecting gear.
“If you’re a sit-down restaurant or a gym, you’ve potentially been completely closed or operating at a limited capacity for months and you’re not going to be at full capacity for a while,” stated Bennet. “The RESTART Act would give you the support to sustain your business through the end of the year and into early next year. No interest would be due in the first year and no principal would be due in the first two years, giving you the runway to get back up to full strength.”
As Sen. Bennet famous, the laws additionally establishes a loan program the place the Small Enterprise Administration (SBA) ensures 100% of loan quantities made to particular small companies with lower than 5,000 full-time staff with phrases that embody most period of not more than seven years, a loan quantity that can’t exceed 45% of 2019 gross receipts, and no principal fee necessities for the primary two years of the loan. If the loan is the same as or greater than the quantity of the enterprise’s whole loss for the taxable yr of 2020, then will probably be forgiven. As well as, lenders which have already been authorized to make PPP loans will be capable to administer loans established by this invoice.
“In order to try and describe to members [of Congress] what we are dealing with, I have used the expression that small businesses in America need an economic bridge to the vaccine,” stated Schultz. “Small businesses need financial support to transform and sustain themselves, so they can navigate this unprecedented moment.”
If the invoice just isn’t handed on a stand-alone foundation, it might nonetheless be included in a bigger COVID-19 aid package deal. That method and/or further legislative efforts for small companies with some of these components would obtain Sens. Bennet’s and Younger’s, and Schultz’s objective.
“My objective is not to pass RESTART. My objective is to help save America’s small businesses,” stated Bennet. “I think RESTART is the best bipartisan idea we have, but we’re always open to improve it.”
Whether or not the RESTART Act or one other laws package deal is the answer, one factor is definite: many small enterprise house owners are nonetheless struggling due to COVID-19 and can need assistance attending to the opposite facet of this pandemic.