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 26:
- House set to vote on $2.2 trillion stimulus package despite concerns about constitutionality of remote “voice vote”
- Government-backed loans may take 2 weeks or longer to process
- Unemployment claims hit record high at 3.28 million
- A break-down of new unemployments benefits
“If 96 percent of them can make it, then can’t 51 percent of the people who, on average, aren’t in the dangerous cohort, more vulnerable cohort — how come they can’t make it?”
Speaker of the House Nancy Pelosi has indicated that there is broad bipartisan support for the $2.2 trillion COVID-19 rescue package and that lawmakers are ready to vote on the legislation as early as Friday. A representative from Kentucky, however, has voiced concerns that holding the vote remotely, without having a quorum of lawmakers physically present, is unconstitutional.
In addition to this legislation, Speaker Pelosi signaled that she believes another round of cash assistance will be necessary to keep American households afloat. While the current stimulus bill provides checks for a smaller amount than many Democrats would’ve liked, Speaker Pelosi admonishes people to “Appreciate it [the Senate bill] for what it does. Don’t judge it for what it doesn’t.We have more bills to come.”
“We’d lend to you hand over fist in normal times, but everything is shutting down and we don’t know what that means for you yet.”
Despite the federal government’s relatively quick approval of COVID-19 rescue packages, cash might not be available soon enough. The bill appropriates $370 billion dollars for banks to lend directly to struggling businesses through SBA-backed loans, however it could take up to 2 weeks for cash to be disbursed and hit business accounts.
Earlier rescue legislation made provisions for disaster-type loans through the SBA, but the SBA website has not been able to handle the increased traffic and applicants have been told it could take as long as 3 weeks to process those applications.
“Americans displaced by the coronavirus crisis filed unemployment claims in record numbers last week”
The Labor Department reported unemployment claims from last week jumped to 3.28 million, the largest number ever recorded. The surge shows the economic impact of the coronavirus shutdown, and individual states have reported their website crashing as people file claims.
“The number shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982,” according to the CNBC article.
“Unemployment insurance offices have been completely overwhelmed with claims and are having a tough time handling the volume.”
As the number of jobless claims reaches historic heights, out-of-work Americans are wondering what benefits they can expect to receive from the COVID-19 rescue legislation. According to the new bill, gig workers, workers who quit their job due to coronavirus-related concerns and furloughed employees are all eligible to apply for unemployment.
Under the new law, workers are eligible for their state benefits and an additional $600 from the federal government, plus up to 23 weeks of standard state benefits. Unemployment payments are considered taxable income.