Business

Parliamentary Eye Target Coronavirus Assistance for SMEs

Washington — Parliamentarians considering new financial assistance for small businesses focus on companies with few employees who may be hurt by the pandemic-induced depression, paycheck protection program I am working on the criticism that plagued me.

“Let’s turn this program into small businesses for small businesses. Make sure it’s based on your needs to get to the small businesses that really need help,” said SMEs and entrepreneurship. Senator Bencardin (D., Md.), A ranking member of the Senate Committee on, said: Last week’s parliamentary hearing.

Bipartisan proposals for a broader $ 908 billion coronavirus support bill include $ 300 billion to the Small and Medium Business Administration and the resumption of PPP, which ended in August. The plan can limit lending to companies with less than 300 employees and show that they suffered a 30% loss of revenue in any quarter of 2020.

According to analysts, as many as 4 million SMEs could be lost in 2020 as the pandemic is hitting the local economy. The WSJ visits Yuma, Arizona, and small business owners say the next round of congressional inspiration may be too late.Photo: The Wall Street Journal Adam Yonker

Such requirements represent a departure from the first iteration of the program, which began in April and provided companies with a $ 525 billion permissible loan to cover salaries and overheads.

The PPP was designed to withdraw money as soon as the pandemic closed the economic swath. Open to companies that typically have up to 500 employees, applicants only have to prove that economic uncertainty has created the funds needed to support their business.

With relatively few requirements, companies were initially in a hurry to apply for a loan as the crisis progressed. Several well-known large corporations received the loan and later repaid it in response to public backlash.

Adam Ozimek, chief economist at Freelance Jobs Upwork, said revenue testing is a wise way to ensure that money reaches companies that really need help.

“It’s a very diverse economy and I don’t know who is hurt or how,” Ojimek said. “There are businesses in the industry that are doing well, even if the average business isn’t doing well.”

“”
“Let’s direct the program to small businesses. Make sure it’s based on your needs to get to the small businesses that really need help.”


— Senator Ben Cardin (D., Md.)

Parliamentary discussions on the new coronavirus support package will come at a crucial time for SMEs. With the proliferation of Covid-19 cases, state and local governments have imposed restrictions and many SMEs have run out of PPP funding.

According to a survey conducted by Reimagine Main Street, a nonpartisan campaign to defend small businesses during the economic recovery period from late September to late November, nearly 60% of 8,328 small business owners will be within the next six months. States that it will need financial assistance or more capital. .. 10% say they plan to close completely within the next 6 months.

Damaged industries such as live event venues and restaurants claim that loans are inappropriate for companies operating with significantly reduced capacity because PPP is pay-focused. .. PPP loans are generally fully acceptable if the beneficiary maintains pre-pandemic salary levels.

The bipartisan framework seeks dedicated funding for independent live venue operators rather than restaurants.

“We are absolutely looking for an industry-specific endowment,” said Sean Kennedy, executive vice president of public relations for the National Restaurant Association. “We also need to be practical, you need to know your audience, and our audience can now hardly agree on the basics.”

When PPP resumes, “Thank you and will soon pivot towards a larger recovery plan,” Kennedy said.

The PPP loan was backed by the SBA, but was issued by banks and other lenders. This initially frustrated many SMEs that did not have strong relationships with financial institutions. Studies have shown that this setting may have made it particularly difficult for black business owners to take advantage of the program.

Regarding the Care Act, the law that created the PPP was “not intentionally created, developed, and most importantly implemented because it relates to our community and small business owners,” US Black said. Said Ron Busby, Chief Executive Officer of. Chambers Inc, a network of Blackchambers of Commerce during a web event hosted by Reimagine Main Street last week.

The bipartisan framework secures some of the funding for companies with less than 10 employees and lenders in smaller communities, which are considered the primary source of funding for companies in minority and poorly serviced communities. We are proposing that widely.

Share your thoughts

What improvements should Congress make in providing additional coronavirus assistance to SMEs? Join the conversation below.

During the first iteration of PPP, Congress initially did not provide dedicated funding to community lenders. Self-employed and independent contractors, on the other hand, were not allowed to apply for PPP until the program was open to other companies for a full week.

Senator Marco Rubio (R., FL), chairman of the Senate Small Business Commission and a key PPP architect, pointed out that the average loan amount for the program was $ 100,729, and the initiative is sufficient. I rejected the criticism that I couldn’t reach a small business. It decreased over time. The loan amount is based on the size of the recipient’s average monthly salary.

Nonetheless, Rubio said at a parliamentary hearing last week that PPP should be resumed in a “coordinated surgical procedure.”

“We can build on the success of the first round, fix some of the issues identified in that first round, and protect SMEs during the winter,” Rubio said. I am.

Write to Amara Omeokwe (amara.omeokwe@wsj.com)

Copyright © 2020 DowJones & Company, Inc. all rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Parliamentary Eye Target Coronavirus Assistance for SMEs

Source link Parliamentary Eye Target Coronavirus Assistance for SMEs

Back to top button