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 25:
- Senate close to voting on stimulus package
- Jobless claims surge over the past week, topping out at 4 million
- Tax deferment for SMBs is a large part of the stimulus plan
“ … a wartime level of investment for our nation.”
The White House and Senate announced Wednesday morning that they’d reached an agreement on the third COVID-19 stimulus package. The economic rescue legislation calls for $2 trillion worth of spending to support unemployed workers, small businesses, hard-hit industries, and direct cash payments to most American households. The House of Representatives still needs to vote in order for the bill to become law.
A few Republican senators, however, are indicating their displeasure with the amount of unemployment benefits called for by the proposed legislation.
According to Senator Lindsay Graham, “This bill pays you more not to work than if you were working. You’re literally incentivizing taking people out of the workforce at a time when we need critical infrastructure supplied with workers. If this is not a drafting error then it’s the worst idea I’ve seen in a long time.”
Graham and other critics are calling for a vote on amendment to the bill.
Update: CNBC is now reporting that Senator Bernie Sanders has said that he will withdraw his support from the legislation if Graham and others do not drop their opposition.
“This will be the first shock and awe. … It’s terrifying, but it’s why nobody is going to tell Congress they did too much.”
It seems like a lifetime ago that we were reading daily stories touting the near record-breaking unemployment rate and the labor shortage across many American industries. Now, we’re looking at the unprecedented number of jobless claims filed in the past week. While the exact number will not be known until the claims are processed, economists believe that somewhere between 1 and 4 million Americans filed for unemployment last week.
“The tax isn’t forgiven, but they don’t need to send the federal government a check right now.”
As details about the legislation emerge, many small-business owners want to know how the $300 billion worth of funds will help them. The key provisions of the bill offer SBOs a payroll tax credit and allow business owners to defer paying taxes as long as they keep workers on the payroll.
Additionally, businesses with 500 or fewer employees are eligible for “business interruption loans” to help offset the cost of paying workers during the COVID-19 pandemic. Analysts are reporting that the loans would be capped at either $10 million or 2.5 times the amount of the business’s monthly payroll, whichever is less. While the money is offered as a loan, there is some indication that repayment might not be mandatory.
Some bright spots in today’s news:
- 40,000 healthcare workers are reportedly stepping up to meet the overwhelming need for more medical personnel in New York City.
- In Seattle a new drug in the experimental phase has had some success treating patients with COVID-19.
- President Trump has set the interest rate at 0% for all federal student loans for the next 60 days.