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On Monday, more than 100 current and former chief executive officers at major companies in the United States wrote a letter urging Congress to act to implement long-term financial relief for small businesses to mitigate the economic catastrophe brought about by the COVID-19 pandemic.
The letter was spearheaded by former Starbucks CEO Howard Schultz and signed by many prominent business leaders, including the CEOs of the Walt Disney Co., Microsoft, Walmart Inc. and Google’s parent company, Alphabet Inc.
The letter warned that if Congress did not immediately act to provide financial relief to small businesses, the consequences – which would include millions of permanent job losses – could cripple the nation’s economy.
“Most small businesses don’t have enough cash in the bank to weather more months of reduced revenue and customer traffic. To survive until a vaccine is widely available, millions of small businesses will require longer-term support from the federal government.”
The letter added, “While the Paycheck Protection Program (PPP) has provided short-term relief for many, that lifeline is coming to an end. Another round of PPP would certainly be helpful for many of these businesses, but the hardest-hit sectors will need much more significant and sustained support.”
The letter called for funds to be given first to small businesses owned by people of color who have been historically disadvantaged in terms of access to capital and other resources.
It also asks for funds to be directed toward Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs), which help businesses in low-income areas.
The letter further states that financial support must be given for more than just two to three months and should ideally be extended “well into 2021.”
The CEOs ask that businesses be allowed flexibility in how they use their loans and that the businesses that have been hit the hardest by the COVID-19 shutdowns have their loans turned at least partially into grants.
The letter also advises that the aid be built into the existing PPP infrastructure so that it can be delivered expeditiously.
The CEOs warn that if immediate action is not taken by Congress, the closure of multiple small businesses could lead to permanent job losses.
“By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon. Tens of millions have already lost their jobs in this pandemic. Allowing small businesses to fail will turn temporary job losses into permanent ones.
“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."
“From retailers and restaurants to consulting firms and manufacturers, small business owners are facing a future of potential financial ruin that will make the nation’s current economic downturn last years longer than it must.”
“We cannot stress enough the urgent need to act,” the letter went on to add.
The letter comes as negotiations between Democrats and Republicans over the impending COVID-19 relief bill have stalled due to multiple disagreements.
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