Will Congress kill your small business? Coronavirus stimulus bill deciding factor

Rhonda Abrams, Special to USA TODAY

Congress will decide whether your small business lives or dies. That’s not an exaggeration. What Congress does now, in the stimulus bill agreed on by the Senate and White House (but not yet passed by the House) to combat the coronavirus outbreak, determines whether millions of small businesses, including yours, will outlast this crisis.   

Tuesday night, Senate Republicans and Democrats finally agreed on a massive stimulus bill—by far the largest financial bailout in American history, totaling $2 trillion dollars in aid. The financial aid includes a number of provisions that will help you and your small business—and if you are self-employed, financial assistance for you as well.

As of this writing, it appears that this bill does not provide GRANTS for small business, which were included in a bill being considered by the House of Representatives. However, this will not be the last stimulus bill passed, and if loans aren’t the lifeline for your small business, you need to raise your voice and contact your representative and senator right away, both at their office and through their social media channels.

Specifically, some of the provisions of the Senate bill likely affecting you:

•  $367 billion in aid for small businesses—apparently mostly, if not all, in the form of loans

•  $600 per week in self-employment unemployment insurance—for the first time, the self-employed and gig workers will qualify and there will be $600 additional self-employment insurance for those who already qualify.

•  $1200 per adult and $500 per child for every American, with phase out of this grant for those earning more than $75,000 individually/$150,000 filing jointly.

•  Paid sick leave and family leave. Small businesses will be required to provide, and will be reimbursed by the government, 2 weeks paid sick leave (at full salary—up to $511 per day) and up to 12 weeks paid family leave (at 2/3rds salary—up to $200 per day) for both full-time and part-time workers.   

Note: This legislation is not yet law. While the White House has indicated the president will sign, the bill still needs approval by the House of Representatives, which is currently out of session. To pass the bill quickly, Speaker of the House Nancy Pelosi wants to pass this by ‘unanimous consent’—which would not require the legislators to return to Washington. But even one member of the House could object—meaning it would slow down passage until later this week.

To keep you abreast of these developments, I’m holding a daily (Monday-Friday) Facebook Live event at 1 p.m. Eastern on my Facebook page and sending a daily update newsletter: Sign up at www.PlanningShop.com.

Registered nurses and patient care technicians wait for their next patient to drive up to be tested for the coronavirus at Christenberry Fieldhouse in Augusta, Ga.

But there are flaws in this law that still mean hundreds of thousands—if not millions—of small businesses will die.

“We are facing an extinction-level crisis for small businesses in this country,” warned Amanda Ballantyne, National Director of Main Street Alliance. “If Congress doesn't act immediately to provide operating grants for impacted small business owners, millions of small businesses will be left with no choice but to close their shops and lay off their employees.” That means millions of unemployed workers. Fewer consumers. A slower economic recovery.

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Here’s what’s needed that I currently don’t believe is in the Senate bill (details were still hard to come by as of this writing):

1. Grants for small businesses and fast. The House of Representatives bill included $100 billion in grants, not just loans. That infusion of cash support would enable small businesses to survive the next few months and keep millions employed.   

2. Payroll subsidies to small businesses to keep employees on payroll right now. That will keep workers off unemployment, enable small businesses to get up and running quickly as the economy recovers as they’ll still have their workers, and help those small businesses that could ‘pivot’ to do so fast.

3. Moratorium on commercial evictions, so that they won’t lose their storefront, office, or warehouse while experiencing cash flow problems.

4. Relief on commercial loan and business credit card payments and interest.

5. Delayed tax payments and no quarterly payments for 2020 for businesses with fewer than 100 employees. The federal government can help small businesses with cash flow by reducing the need for tax payments for the rest of the year.

6. Delayed payment of utilities and no shut off of utilities of small businesses. To keep the lights on—literally.  

7. Reimbursement for paid sick/family leave to come sooner than quarterly. This is something that needs to be addressed FAST. Currently, it appears there is going to be a huge lag between the pay small businesses are mandated to pay and government reimbursement. Small businesses are just not equipped to handle this.

Loans clearly are not enough with a completely unknown economic future. “Jobs and businesses will not bounce back quickly,” predicted Ballantyne. “Business owners will not take out loans to cover payroll in an economic climate like this, it simply will not happen.”   

Loans aren’t going to help KB Brown, who had to lay off his four employees at Wolfpack Promotions in Minneapolis, which prints fabric promotional items. “We’re scared. We’re nervous,” he said. “We’re literally at zero. We still have to pay our mortgage.” His business will not bounce back soon, and a loan would mean he’d be even more likely to lose his home.

Nevertheless, since he has fabric and sewing machines, he’s making masks to donate.

“I have no idea what my revenue streams will look like,” said Molly Moon Neitzel, owner of Molly Moon’s Homemade Ice Cream in Seattle, who is skeptical of whether a loan would help her. Before the Covid-19 crisis—which hit Seattle hard and early—Neitzel had 120 year-round employees, adding an additional 100 seasonally. She laid off 76 already and anticipates laying off more. “I have almost no cash flow at this point. If I got cash assistance, I could keep my team, and we could pivot to grocery and delivery…and we could create a business plan to meet the new kind of demand in the new economy. People want ice cream. Ice cream makes people happy. But I need help.”

Small business owners are also terrified about the coronavirus itself and that the government will not be serious in tackling it. That there won’t be enough support for health care providers and they’ll end social distancing measures too soon, leaving the virus—and the fear—out there.

"I keep hearing politicians talk about how there’s sort of two problems – a public health problem and the economic problem,” said Aaron Seyedian, owner of Well Paid Maids in the Washington, D.C. area, whose business with 15 employees shut down March 13. “I ask folks in Congress to remember that the public health problem needs to be solved before we can even think about getting back to work.”

Rhonda Abrams is the author of “Successful Business Plan: Secrets & Strategies,” the best-selling business plan guide of all time, just released in its seventh edition. Connect with Rhondaa on Facebook ; Instagram and Twitter @RhondaAbrams. Register for Rhonda’s free business tips newsletter at www.PlanningShop.com

This article originally appeared on USA TODAY: Fate of small businesses rests on coronavirus economic stimulus bill