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As part of the wider economic relief package it passed last week, Congress enacted a $349 billion rescue effort for small businesses battered by the coronavirus crisis. It’s a potential lifeline to countless restaurants, bars, shops, and others that have lost sales or been forced to shutter for the sake of public health.
But is it going to work?
We don’t know yet. Which is why I want to hear from small-business owners, as well as the accountants, lawyers, and bankers who work with them, to help figure it out. The Paycheck Protection Program, as it’s been dubbed, will offer low-interest loans to small and medium-size businesses so they can cover payroll and other major expenses for eight weeks, and will forgive the debt as long as they don’t lay off staff. In short, the government is going to pay businesses to keep their workers employed (not totally unlike what’s being tried in Denmark). The U.S. Small Business Administration, which is overseeing the program, released guidelines and a short sample application on Tuesday and said that lenders could start processing loans as soon as April 3.
But there are many reasons to worry about whether this program will succeed, and for whom. Will there be enough funding for all the businesses that need help? Will the loans be large enough to keep them afloat? What happens afterward? Will the money go to small businesses that are in serious peril right now? Or are the rules and requirements so complicated that only bigger firms that can afford skilled lawyers and accountants will be able to take advantage of it? How fast will banks, which are tasked with underwriting these loans, actually be able to get money out the door? If this program doesn’t work as advertised, what should Congress try next?
To figure out the answers to these questions, I’ll talk with the small-business owners whose livelihoods now depend on this program succeeding. If that’s you—whether you’re still deciding if one of these loans makes sense for your business, or are jumping into the application process, or have already decided it’s not for you—please get in touch. Likewise, I want to hear from lawyers and accountants who are helping businesses navigate the Paycheck Protection Program, and bankers who are deciding whether to participate. Even if you think the whole program will be a baffling mess, I want to hear your perspective.
As I wrote last week, whether the government can save small businesses is one of the single most important questions facing the country right now. The more restaurants, bars, and independent retailers that go bust, the longer it will take the economy to recover from this disaster, and the more our cities and towns will be irreversibly changed. A lot is riding on the government’s efforts working. With your help, I’ll follow those successes and failures in real time.
If you’re interested in talking, please email me at email@example.com.