Small Business Group Critiques House Passed Emergency Coronavirus Spending Bill

The small business community is among the hardest hit by the coronavirus pandemic. With the market in free fall and the uncertainty breeding in communities across the country, Main Street has been left to grapple with how to stay afloat during these challenging times. Small businesses—particularly in the service and retail industries—operate on razor-thin margins before a crisis like this strikes. America’s entrepreneurs need quick, decisive, and responsible action now to provide relief to the economic impacts they are already experiencing.

While we’re glad the U.S. House of Representatives moved swiftly on bipartisan legislation to address the impacts of the coronavirus that included help for the self-employed (H.R. 6201), we believe the House missed a vital opportunity to mitigate the impacts to small businesses, and in fact included provisions that may harm small businesses that are already struggling. 

The bill included provisions that will require employers to provide emergency paid sick leave and paid family leave to employees who are impacted by COVID-19. At the same time, the bill exempts large corporations of 500 or more employees, which are the most situated to provide paid leave, from having to do so. Meanwhile, small employers will be eligible for only partial reimbursement via quarterly tax credits to offset the cost of this leave—put simply this is not enough to help small employers in peril. 

Lawmakers and the Administration must not delay any further. We urge them to immediately act on the following measures:  

• Make paid sick leave and paid family leave fully reimbursable for small businesses on a weekly basis. 
• Increase responsible credit and cash flow for affected small business by:
  • Passing the SBA Business Stabilization Direct Loan Program Act of 2020, which would create a new program under the SBA to directly supply interest-free loans to small businesses being impacted by COVID-19. Small businesses would be able to use these loans to provide employee benefits, pay wages, pay taxes, make telework arrangements, pay rent, refinance existing debt, and more. 
  • Passing the new SBA Disaster Grants, as proposed by Senate Democrats, which would direct grants for eligible small business recipients to help cover the cost of lost business, providing paid sick leave, and more. 
  • Adjust repayment due dates on loans, property taxes, and commercial to give small businesses the flexibility they need to stay afloat. For example, Senate Democrats proposed a payment forbearance for six months on loan repayments. 
• Protect small businesses from bad actors by extending the Truth in Lending Act disclosure requirements to small business loans and credit products. Doing so will help ensure small businesses struggling with cash flow are not taken advantage of during this pandemic.
• Increase funding for Small Business Development Centers (SBDCs) and other small business support centers to ensure they have the tools they need to support small businesses in their communities that are struggling.
• Streamline information on disaster loan assistance: The Small Business Administration must utilize its network to immediately and effectively inform small businesses about how to access loans through the SBA’s Disaster Loan Assistance program. 

The passage of H.R. 6201 is an important first step to addressing the dramatic impacts of COVID-19. But the small businesses that makeup 99% of all employer firms in America are going to much more in the days, weeks, and months ahead. Addressing a pandemic requires a robust response, and we call on Congress and the Administration to act accordingly. 

For more information on the emergency response policies Small Business Majority recommends amid the COVID-19 pandemic, click here.