Since the middle of March, COVID has been at the top of everyone’s mind. I have written a lot about it, from the highs to the lows. Keeping your business surviving might have been tough, but the government programs like the CARES and paycheck protection program (PPP) were helping for a while. Now, however, it seems likely that there will be any more small business stimulus money for the rest of 2020, regardless of what happens with COVID. So… what happens now? Without help, it will be very important for small business owners to keep an eye on your financial health. While that may seem obvious, it sometimes gets lost when putting out fires.
Below, we will get into three important points to know, and what you will need to know about small business stimulus possibilities going forward.
We’ve talked about this before, but there are still some things to understand when it comes to the end of CARES COVID relief. The stimulus package which was designed to help small businesses owners in 2020 ran out of time and money, and while the Senate had the option to renew it or find a new deal, they never reached a compromise between the two parties. As a result, there has been a fear about what comes next.
Politico’s analysis of what went wrong the first time with the article “Senate fails to advance coronavirus stimulus package” by Marianne Levine and John Bresnahan points to a number of issues that were present from March. Chief among them is the internal struggles within Congress that caused roadblocks from the beginning, and the struggles over what small businesses need and what Congress could provide.
While the CARES stimulus package passed in March of 2020 did end up providing some help, it was not enough in the end for small businesses to survive. The Wall St. Journey has estimated that up to 1/3 of all small businesses will not reopen in New York City. It is a similar picture for small business owners on Main Streets across the country. Inaction has consequences. Without additional stimulus in 2020, it looks like a long road to recovery, just like 2008. The best thing to do now is to adjust your spending and expectations.
2020 has had a massive impact on the economy, and small businesses have suffered more than most. If your a small business owner and have found yourself in positions of struggle, you are not alone. But is the CARES stimulus plan in 2020 any different than that from 2008, and will it help small businesses in the long run? This is the major question to answer.
Take the idea of infrastructure. In July, Brookings writers Adie Tomer, Joseph W. Kane, and Lara Fishbane wrote “An infrastructure stimulus plan for the COVID-19 recession” about how the country could look to recover. Their piece is an argument more than a report, but some of their explanation of the situation is important to infrastructure in general. One of their examples is about an infrastructure
program that would help small businesses owners, providing hiring incentives for example. This hypothetical program could potentially boost the economy and cost only $5 billion. So… why hasn’t a program like this been passed?
It is tough to say, but the standstill in Congress certainly is not helping. Beyond that, there is not enough support for infrastructure programs when it comes to business. But Congress could finance a program like this and aiding small businesses. So, if the CARES act and the Paycheck Protection Progam (PPP) did not do enough for your small business, Congress was never prepared for a bailout of this duration in the CARES act.
Well, there are still a lot of issues to consider. For example, NPR breaks down the issue with the end of unemployment benefits in a recent article by Chris Arnold. This will spur some to find new jobs, but it is not fixing the larger issues. Arnold’s article does a smart job of explaining the ramifications of COVID’s unemployment crisis, but it might not be enough at the end of the day. There is also the question of rent, with the moratorium on evictions lifting in select places across the country.
These problems are going to compound, and there are not any “easy” solutions yet. Instead, many small business owners will be looking at issues that continue for the rest of the year. If Congress is not going to provide any more financial support, there might not be much that can be done. Plus, with the need for disaster load (EIDL) and paycheck protection program PPP repayments coming up, it is safe to say that issues will continue for now and into 2021.
If your small business was relying on the government stimulus beyond CARES to survive COVID and everything else that has happened in 2020, you are not alone. Unfortunately, help does not seem like it will be coming in the short term. So, here is what to keep in mind
Brian Cairns, CEO of Prostrategix Consulting. Over 25 years of business experience as a corporate executive, entrepreneur, and small business owner. For more information, please visit my LinkedIn profile
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