Welcome to the Small Business Rundown. Each day, we bring you stories that impact small business owners and their workforce.
Small business News Highlights for March 23:
- Senate fails to advance stimulus package over the weekend and again today
- Many small business owners are wary of taking on more debt
- American workers OK with working from home long term
We hope you and your loved ones had a safe, calm weekend.
The list of cities, counties, and states issuing shelter-in-place orders is growing by the day (hour?), even as President Trump signals his desire to ease restrictions at the end of the initial 15-day quarantine period. Honk Kong provides an important cautionary tale, however, on the dangers of lifting bans on public gatherings and social distancing measures.
“The markets are tanking once again because this body can’t get its act together. This has to stop. The country is out of time.”
Washington, D.C., is currently on lockdown and the Senate is locked in a stalemate. After failing to pass a $2 trillion stimulus package over the weekend, the Senate failed to advance the bill again this afternoon, causing the stock market to fall even further and House members to start working on their own economic rescue legislation.
Last week President Trump signed the first COVID-19 aid package, which includes up to $7 billion worth of funds for low-interest and guaranteed loans for struggling small businesses. Many small-business owners are hesitant to take on debt given their already-tight operating margins: “All we do is make enough money to make it through the off-season. We’re not that profitable. We don’t have any reserves. How do we borrow a year’s worth of money and then have to pay it back?”
The terms of the SBA-backed loans allow SMBs with up to 500 employees to borrow up to $2 million at an interest rate well below the usual rates offered, however defaulting on the loan can mean forfeiting the real estate or other collateral required by nearly all the loans.
“The longer this drags out obviously the more devastating this will be for the small business community.”
Advocates for the small business community continue to urge Congress to act as quickly as possible to pass legislation, even while warning that cash won’t necessarily be sufficient to rescue many small companies.
In fact, some estimates say that 15,000 retail locations will close permanently this year due to the COVID-19 pandemic.
On a slightly more positive note, a Glassdoor survey found that American workers are feeling good about their current WFH capabilities. Almost 70% reported that they would be OK if their employer made long-term working from home mandatory. Unfortunately, 30% of respondents report that their company has done nothing to address their workplace concerns about the coronavirus.
If you or your employees have any questions about the stimulus checks slated to be sent out by the federal government, you can find answers here.