CEOs of some of the world’s largest companies have written a letter to top congressional leaders of both parties in the House and Senate, warning lawmakers to bail out small businesses now or risk permanent closures by Labor Day with a catastrophic domino effect.
Legislation should include federally guaranteed loans and “These funds must flow to all small businesses in need, particularly those run by people of color, who have traditionally had less access to capital,” the letter warned.
Organized by Starbucks Chairman emeritus Howard Schultz, the letter was signed by more than 100 current and former CEOs including:
The company executives said that federally guaranteed loans should “enable small businesses to transform and sustain themselves through 2020 and well into 2021.” They said that this support “must last for longer than just the next two or three months.”
Their letter comes as Congress as a new coronavirus relief package remains stalled in Congress.
Neither the House’s HEROES Act nor the latest version of Senate Republicans’ HEALS Act include significant funding for small businesses besides an extension of the Payckeck Protection Program, Axios reported.
The botched rollout of the Small Business Administration’s Paycheck Protection Program meant some large and publicly traded companies applied for and received money intended for small businesses. For Black Business owners, the problem was exacerbated.
PPP allocated $349 billion to offer small businesses low-interest, forgivable loans of up to $10 million, with some restrictions. However, banks’ systems crashed. Some only allowed existing customers to apply. Due to high demand, U.S. Treasury Secretary Steven Mnuchin requested an additional $250 billion for the program.
Before covid-19, there were more than 30 million small businesses in the U.S., Forbes reported. About 70 percent of them applied for an emergency loan under the CARES Act’s Paycheck Protection Program, according to research by the National Federation of Independent Business.
In early July, The U.S, Treasury Department Treasury named 650,000 companies that got U.S. small business PPP loans.
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“By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon,” the letter stated. “Tens of millions of Americans have already lost their jobs in this pandemic. … By year end, the domino effect of lost jobs — as well as the lost services and lost products that small businesses provide — could be catastrophic.”
The letter included the following suggestions from company CEOs:
