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 June 23:
- Square accused by small businesses of withholding much-needed funds
- U.S.-China trade deal holds up, despite rumors
- Businesses still laying off employees after receiving PPP money
Square accused of withholding money from SMBs
“It may not be the coronavirus that puts us out of business but actually the greed of Square that breaks the camel’s back.”
Square, the payment company owned by Twitter chief Jack Dorsey, is facing mounting accusations that it has been withholding money from thousands of small businesses.
The credit card processing company is charged with not paying its customers between 20 and 30% of the transactions it processes on their behalf. Small businesses say that they were given little or no warning about this and that they need the money to survive. Square reports that they are holding on to the money to protect against risky transactions, a claim that business owners say is untrue. Instead, they say, Square is protecting its own bottom line at their expense.
U.S.-China trade deal still stands
“I think the reason the deal is gonna hold for the time being is that China’s actually doing a good job at implementation.”
Despite comments to the contrary by a high-level trade advisor yesterday, President Trump and others in his administration say that the Phase 1 trade deal negotiated with China in January still stands.
The deal was signed after months of stalled negotiations over punitive tariffs placed by both countries that negatively impacted many small businesses across the country.
Economists worried recent recovery will be short lived
“Despite states beginning to gradually reopen their economies, many business owners say they’ll likely need more aid to weather the economic recession.”
Extended unemployment benefits from the federal government are set to expire at the end of July, right about the time that many small businesses will run out of money from their Paycheck Protection Program (PPP) loans. These factors, and others, have many economists concerned that any recent moves toward economic recovery will be short lived.
In fact, without additional support from the federal government, 14% of small business owners report that they will have to lay off employees after using up money they received from the PPP. 30% of small business owners report that their sales in mid June were down by over half from what they were before the start of the global health pandemic.