🚨THREAD🚨
I’ve spent the last 48 hours talking to small businesses here in Western PA. Some feedback from these discussions will follow.
I’ve spent the last 48 hours talking to small businesses here in Western PA. Some feedback from these discussions will follow.
They feel that House & Senate are taking too long to get them relief. Speed is critical right now & urgent action is needed to preserve them. Keeping people healthy AND employed during this crisis should be the focus.
First & foremost, a loan guarantee program for small businesses is critical to keeping the economy going & will prevent millions of business failures & millions upon millions of lost jobs. It will also enable the economy to recover fast once the virus is under control.
Based on what I’m hearing from small business owners, a loan guarantee program like the following would give them a lifeline to see this crisis through, as well as keep people healthy & employed.
1) Loans made available to small businesses with 100 or fewer employees through local banks, but guaranteed by the Federal government. This way it can all happen fast. And fast (weeks not months) is absolutely critical right now.
2) Loan amounts for each small business equal to 6 months of each company’s monthly payroll cost (based on average payroll in January and February 2020 -- before the onset of the crisis).
3) Zero interest or payments for the first 12 months of the loan.
4) If a small business can prove that they used the money to pay their employees (to make payroll) within calendar year 2020, then the loan amount is forgiven by the Federal Government at the end of Calendar 2020.
5) If the small business cannot prove this, then they pay back the loan over five years with interest at the Federal Funds Rate and payments starting 12 months after the date of the loan.
In addition, any plan moving forward should also include the following tax relief for small businesses:
1) Payroll tax relief for the employer & employee for the remainder of 2020.
2) Refund payroll taxes the employer paid for the last 6 months thru March 2020.
3) Ability to file for a tax refund for 50% of the taxes paid for fiscal year 2019 for all S corporations. This would quickly make funds available.
3) Ability to file for a tax refund for 50% of the taxes paid for fiscal year 2019 for all S corporations. This would quickly make funds available.
Also: Designation of #Covid_19 as an insurable event under a company’s business interruption insurance. Then a government backstop for the insurance companies that pay these claims. The insurance companies are setup to quickly & effectively handle this.
The most important issues for small business owners by far are quickness of response & availability. SBA and other govt. programs can be inefficient & slow. That is why few use them.
Small businesses are the major driver of economic activity in our nation. We must act fast to get them a lifeline so they can keep the lights on, & keep employed & healthy during this unprecedented crisis.
I want to emphasize that these provisions aren’t an economic silver bullet.
BUT small business leaders in my district have said provisions like these would help them weather this storm.
BUT small business leaders in my district have said provisions like these would help them weather this storm.
