KEY POINTS:
- Early this morning, the Senate leaders announced an agreement on a $2 trillion stimulus package as the country grappled with COVID-19.
- The package will include $367 billion for loans to small businesses.
- This will provide relief to approximately 17 million small businesses employing 142 million Americans, according to the most recent data from the U.S. Census.
- These firms are responsible for $6.2 trillion in payroll annually.
ECONOMIST CORNER:
As businesses shutter in the wake of COVID-19, many small businesses (with less than 500 employees) have been left without the cash flow necessary to pay employees, rent or utilities. Compounding this is the fact that only 33 percent of small businesses do not have “rainy day funds” for unexpected expenses, according to a survey by the Chamber of Commerce. To assist these firms, the Senate bill will provide small businesses loans to cover the cost of employees, rent, utilities, and other business expenses. These loans will be forgiven if the business retains their employees. These provisions keep workers attached to the labor force and provide the economy its best change to rebound after the crisis.