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 May 19:
- Facebook launches virtual shopping mall to help small businesses
- CARES Act expands bankruptcy provision to help small businesses
- Congress eyeing changes to COVID relief measures
Facebook launching virtual shopping mall to help SMBs
“We’re seeing a lot of small businesses that never had online presences get online for the first time, and we’re seeing small businesses that had online presences now make them their primary way of doing business.”
Small businesses will be allowed to set up “virtual storefronts” using Facebook’s social media platforms, including Instagram and WhatsApp. CEO Mark Zuckerberg announced that the company will not charge small businesses to set up these storefronts since small businesses make up the majority of Facebook’s advertisers.
SBOs will be able to use their virtual storefront to feature their goods, advertise to consumers and communicate with customers using messaging apps. Customers will be able to buy products directly from retailers’ websites or through the check-out function in Instagram. Zuckerberg believes that these virtual storefronts will be the difference between going under and staying afloat for many businesses.
CARES Act expands bankruptcy eligibility
“Sort of like the pandemic, there’s really no discrimination, Whether the companies are sexy or not, are large or not … it’s affecting all of them.”
Once upon a time, long, long ago, a new law took effect that made it easier for small businesses to navigate the bankruptcy process.
Okay, it was actually only this past February that The Small Business Reorganization Act became law, adding the Chapter V provision to the bankruptcy code that allows small businesses with up to $2.725 million in debt to file for a more streamlined and less expensive bankruptcy process. Now, as an unprecedented number of SBOs weigh their options for the future, it’s worth noting that the CARES Act expanded Chapter V bankruptcy eligibility by raising the debt ceiling to $7.5 million. This expanded bankruptcy protection coverage will expire next year.
Congress debates COVID-19 relief measures
“We do need to give them more time to spend those monies.”
While politicians remain at an impasse about another round of stimulus legislation, some lawmakers are discussing ways to tweak the programs already created and funded by earlier rounds of COVID-19 relief bills.
Senator Marco Rubio, Chair of the Senate subcommittee that deals with small businesses, would like to extend the 8-week timeframe that SBOs have to spend money received from Paycheck Protection Program (PPP) loans. Senate Republicans have also indicated that they might be willing to revisit the 75-25 rule that requires companies to spend three-fourths of the money on payroll, noting that some businesses have more fixed costs than others.