GOP Bill Supports Money Market Funds, Cuts Costs For Small Businesses
The proposal would also affect $ 299.4 billion for Small Business Administration loans to businesses with fewer than 500 employees. The loans would be capped at the cost of covering a portion of the company’s monthly costs – payroll, debt repayment, mortgage and rent – for up to four months, up to a maximum of $ 10 million.
Since companies use the loans to cover payroll only, the debt would be forgiven, but companies can also use them to cover other regular operating expenses and then pay them back.
While forgivable loans would help many small businesses stay open during the coronavirus downturn, they might not be doing enough if customers maintain maximum social distancing, said Stan Veuger, resident researcher at the conservative American Enterprise Institute. . “For some businesses that will be good enough, but not for those that generate virtually no income.”
Veuger said he would have preferred forgivable loans to get more funds and fewer restrictions, allowing the money to be used for other fixed costs like rent, while retaining the condition that businesses do not. not downsizing. He argued that this was more efficient and effective than the payments to individuals which are also part of the bill.
“Instead of a guy making $ 3,000 a month losing his job and getting a check for $ 1,000, the guy would continue to make his $ 3,000 a month,” he said. “It’s a way of targeting people right now, these people in industries that are basically not functioning right now.”