Congress Plans Next Small-Business Aid Package
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What’s the new small-business relief plan Congress is considering?
Future Money Briefing for Tuesday, December 15th. I'm J.R. Whalen for The Wall Street Journal. Congress is still working out the details of a new coronavirus relief package for businesses. But unlike last time when small, medium, and large businesses received funds based on payroll costs, the package on the table now is geared towards smaller companies that can show they've been hurt by the economic downturn.
There are some industries that have said basing a loan amount on payroll doesn't really make sense for them because many businesses in those industries are still operating at much reduced capacity.
Coming up, our economics reporter Amara Amokwe will have details on how the new relief package will benefit the nation's smallest businesses. That's after the break.
In the last iteration of the Federal Paycheck Protection Program, many of the nation's smallest businesses didn't get the funding they needed because of the way payouts were calculated. That's likely to change under the new relief package now being negotiated in Congress. Our economics reporter, Amara Omoque, has been following this, and she's here with us with details. Amara, thanks for taking the time to be with us.
Thanks for having me.
You know, it seems like a lot of small businesses haven't been able to move much past square one during the pandemic. Just when they started seeing some customers return, state and local governments put restrictions back in place.
How does this package differ from the original Paycheck Protection Program?
I imagine that business owners must feel the next set of relief funds can't come fast enough.
Yes, I've been talking to business owners. And if you look at survey data, several different surveys that are out there, there are a lot of small business owners, particularly in those hard hit industries that rely on person to person contact that say, look, we need more aid. And it shouldn't only even be in the form of loans, such as in the Patriot Protection Program. We need grants. We need other long term support programs.
Who would qualify for second PPP loans under the proposed framework?
And so talking to business owners, particularly at this crucial moment where state and local governments are implementing restrictions again to deal with this surge in coronavirus cases, particularly as we go into the winter months where things like outdoor dining aren't going to be much of an option, small businesses are really saying we need this aid and we need it now.
So where do things stand on negotiations in Congress?
So I'm going to caveat my answer by saying that these negotiations are ongoing and seemingly ever evolving. But lawmakers generally agree on a bipartisan basis that small businesses need more aid and that they should get more aid. So there is a bipartisan proposal that is out there right now that would direct about $300 billion towards small businesses in the next coronavirus package. And lawmakers generally agree that this package of small business aid should be more targeted.
What are the next steps and where do negotiations stand in Congress?
It should target smaller firms and firms that can demonstrate that the pandemic has really affected them negatively.
How is the aid package being reworked to do that?
Well, so this bipartisan framework that is proposed would make it such that if a company wanted to take a second loan under the Paycheck Protection Program, which was the main way that the federal government offered aid to small businesses earlier this year, that company would have to have 300 or fewer employees. And they would also have to demonstrate that they have suffered a revenue loss this year.
Why are industry groups asking for aid not tied to payroll?
Now, that would be a difference from sort of the first iteration of the Paycheck Protection Program. That program was hastily designed and put together because lawmakers really wanted to get money out to businesses quickly. So applicants to the Paycheck Protection Program, they had to provide very little paperwork. They pretty much only had to attest that they needed the money to support their ongoing operations. amid economic uncertainty. And because of those relatively few requirements, we saw a lot of businesses rush in for PPP loans when the program first opened back in April.
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Chapters
6 chapters
1
What’s the new small-business relief plan Congress is considering?
0:05–1:30
2
How does this package differ from the original Paycheck Protection Program?
1:30–1:56
3
Who would qualify for second PPP loans under the proposed framework?
1:56–2:46
4
What are the next steps and where do negotiations stand in Congress?
2:46–3:19
5
Why are industry groups asking for aid not tied to payroll?
3:19–4:29
6
How would the proposal target underserved and minority-owned businesses?
4:29–6:20
Speakers
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