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 2:
- 10 million Americans file for unemployment in 2-week timeframe
- The small business Paycheck Protection Program is scheduled to begin tomorrow
- President Trump invokes Defense Production Act to speed ventilator manufacturing
“Given the incredible deterioration of the labor market in a matter of weeks, federal policymakers will absolutely need to come back and provide more desperately needed relief, and more support for the recovery once the lockdown is over.”
As public health officials watch the number of global coronavirus infections top 1 million, U.S. economists have their eye on another figure: the number of unemployment claims. In the past 2 weeks, roughly 10 million Americans have filed for unemployment benefits, making another round of economic stimulus money a near certainty.
While the unemployment rate was close to a record low of 3.5%, many economists anticipate it to quadruple in the coming months as the retail, hospitality, and travel industries continue with massive waves of lay-offs.
“We’re talking about attempting to do 10 times our normal monthly loan volume, and maybe more than that.”
Banks across are supposed to begin disbursing nearly $350 billion worth of government-backed loans tomorrow, yet many of these institutions still lack clarity on how the process is supposed to work.
Part of the $2 trillion dollar aid package, the Paycheck Protection Program extends government-backed loans, up to 250% of 2019 payroll, to companies with 500 or fewer employees to help them meet payroll and other business expenses. The program then allows businesses to later apply for loan forgiveness if they don’t lay off workers or cut their wages.
Yet many lenders are still waiting for the details about how they’re supposed to process, track and underwrite the loans — an especially scary prospect given that the usual financial documentation and collateral requirements have been waived.
SBOs who have already let staff go, take note: as long as you can document that you had employees as of February 15, 2020, you are eligible to apply for funds to be used to rehire workers.
And for SBOs worried about maintaining social distances, the loan application can be filled out online.
“Today’s order will save lives by removing obstacles in the supply chain that threaten the rapid production of ventilators.”
President Trump invoked the Defense Production Act today, directing 6 manufacturers to help meet the nation’s staggering supply of ventilators.
Meanwhile, on the other side of town, Speaker of the House Nancy Pelosi flexed her own muscles, convening a special select bipartisan House committee with subpoena power to oversee the White House’s response to the COVID-19 pandemic.