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 April 10:
- Main Street SBOs waiting on advance grants that may never materialize
- List of auto insurance companies offering refunds grows
- Number of unemployment claims tops 16 million
- Google to help New York state fix unemployment website
“They understand the limits of government and there would be red tape, but they did not expect for the rules to change so dramatically.”
Stalled payments from the Small Business Administration’s Economic Injury Disaster Loan program are only causing more frustration and fear to SBOs hoping for a lifeline. The disaster assistance loans are directly managed by the SBA and applicants were initially told that they would be immediately eligible for a $10,000 grant within 3 days of successfully completing an application.
Recently, though, state branches of the SBA have offered conflicting information, indicating that the $10,000 grant might have qualifications and that program funds are running low. In Massachusetts, SBOs were first told that the grant only covers $1,000 per employee before clarification on the issue disappeared altogether. Meanwhile, a senior administration official has stated that 4 million small businesses have submitted EIDL applications worth $383 billion, even though Congress only allocated $17 billion for this program.
Overall, about 70% of U.S. small businesses have already applied for some sort of assistance from the CARES act, though it’s unclear how many have actually received cash so far.
Last week (Last month? This week? It’s all running together) we noted that 2 auto insurance companies were refunding hundreds of millions of dollars worth of refunds to customers. Well, the list is growing and the amount of forthcoming refunds now equals nearly $7 billion.
“Stocks are up because the damage to the economy — evident in claims — is beyond comprehension, while the response of the Fed is easier to understand.”
If you’re confused why Wall Street had its best year in nearly 5 decades while jobless claims soar, read this. Economists think this is due to the markets not fully realizing the scope of the economic devastation while focusing, instead, of the Fed’s historic interventions.
Across the country, jobless claims have topped 16 million, yet many states have proven to be completely unprepared to deal with the influx of applications. Google has teamed up with New York state to help their struggling application website. Calls to unemployment officers have increased by 16,000%.
The IRS announced today that the first round of direct cash payments will begin going out in the middle of next week. This initial round will go to people who filed a 2018 or 2019 tax return with direct deposit authorization. The IRS also announced that it has postponed other tax filing deadlines, such as second quarter estimated tax payments.