Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
SMB News Highlights from March 18, 2020:
- White House proposes $1 trillion aid package, which includes $300 billion for small business loans
- SBOs are turning to their 401(k) plans for liquidity
- Senate approved a COVID-19 bill, which includes paid family leave, funds for medicaid and food assistance programs, and free testing for coronavirus
- U.S. and Canada closes border for “non-essential” travel
- President Trump invoked the Defense Protection Act, to give authority to order manufacturing of critical goods
The Washington Post published a story today outlining some of the measures aimed at propping up small businesses in a $1 trillion-plus aid package. The package includes $300 billion earmarked for “Small Business Interruption Loans” intended to help companies continue paying employees and prevent further layoffs.
The loans, backed by the government, would help restaurants and other hard-hit industries continue paying workers for 6 weeks. The amount would be capped at $1,540 per week per employee and the Treasury Department would manage interest rates and loan maturity. Businesses with 500 or fewer employees would be eligible for the loans.
The aid package also includes money to send 2 cash payments to many American workers hardest hit by the coronavirus pandemic. While the exact details have not been hammered out, the White House’s intent is to send a $1,000 check on April 6 and then again on May 18.
Until these funds become available, however, some small business owners are accessing their own 401(k) plans in order to keep the lights on. As one SBO says, “I need the telephone to take orders, I need the electricity to make the food.”
As a story by NPR notes, most small Main Street businesses have only a few weeks worth of cash reserves on hand, making help from Washington urgent as they try to keep their heads — and the heads of their employees — above water.
Thankfully, the Senate approved its multi-billion dollar COVID-19 aid bill this afternoon and sent it to the White House for President Trump’s signature. The bill includes:
- 2 weeks of paid sick leave for American workers in quarantine
- 12 weeks of paid leave (at 67% of their usual salary) for workers who have to stay home to care for school-age children
- Enhanced unemployment insurance
- Funds for medicaid and food assistance programs
- Free testing for the coronavirus
In an effort to help contain the spread of the virus, the U.S. and Canada announced today that the border will be closed to all “non-essential” travel. The leaders of both countries say that the closure will not impact trade between the two nations.
President Trump also invoked the Defense Protection Act, which gives the president broad authority to order domestic manufacturing industries to produce necessary items for the country during times of critical shortages: “Invoking the DPA is like calling in the calvary in response to a national emergency.”