Trump’s Coronavirus Relief for Small Business: What’s Included?
If you’re like me, you may now find yourself checking up on coronavirus stats before your morning coffee. A serious concern for the world, the coronavirus (COVID-19) outbreak is more than a health crisis. It’s also a tough economic trial for small business owners.
With high-tourism areas like California, New York, and Washington state already dealing with “sick workers and spooked customers” (NY Times), the rest of the nation’s tourism, restaurant, and retail sectors are fighting financial panic.
This week, the Trump Administration has come out with new measures to contain the outbreak and ease financial complications. This includes proposing measures for coronavirus relief aid for small businesses.
As we keep track of the spread of the outbreak, here is a news brief on what’s going on inside the White House, Small Business Administration, and the U.S. Chamber of Commerce — and how these changes will impact small business.
$50 billion relief package for small business during coronavirus outbreak
On March 11, 2020, President Trump proposed a new $50B COVID-19 relief package for small businesses affected by the coronavirus outbreak. Trump has already addressed the Small Business Administration (SBA) to provide liquidity through small-interest loans and is asking Congress to fund the initiative with an additional $50 billion.
“I am instructing the Small Business Administration to exercise available authority to provide capital and liquidity to firms affected by the Coronavirus,” Trump addressed the nation in a video from the Oval Office.
“Effective immediately the SBA will begin providing economic loans in affected states and territories. These low-interest loans will help small businesses overcome temporary economic disruptions, caused by the virus. To this end, I’m asking Congress to increase funding for this program by an additional $50 billion dollars.”
— President Trump
Earlier in March, Trump signed legislation H.R. 6074 which would provide $8.3 billion additional federal funds in light of the COVID-19 outbreak. The bill included emergency loans for small businesses that suffer financial losses due to the coronavirus outbreak.
Payroll tax cut 2020 and other coronavirus-related tax measures
A small business relief measure currently advocated by the White House is a complete payroll tax cut until the end of 2020. Currently, both workers and employers must pay 7% in payroll taxes (which are separate from income tax) which include Social Security and Medicare withholding taxes.
Hoping to get the payroll tax cut approved by both Republicans and Democrats, and please remember, very important for all countries & businesses to know that trade will in no way be affected by the 30-day restriction on travel from Europe. The restriction stops people not goods.
— Donald J. Trump (@realDonaldTrump) March 12, 2020
Trump is presently advocating the 2020 payroll tax cut which will help both small business owners and their employees save more money in times of inevitable economic decline due to the coronavirus pandemic. A similar tax cut was temporarily introduced in 2012 under the Obama Administration.
This time around, gaining enough bipartisan support to pass the tax cut in Congress has been a matter of extensive debate. In particular, senators argue the payroll tax cut would not help workers laid off during the COVID-19 outbreak and may take a toll on Social Security.
If passed, the 2020 payroll tax cut will ring in welcome support for small business owners who may use saved tax money to cover economic losses due to the outbreak.
U.S. Chamber of Commerce COVID-19 guidance for business owners
The U.S. Chamber of Commerce has just held a coronavirus press conference and released two documents: special guidance for employers and workplace tips for employees for the duration of the coronavirus outbreak.
Even if you’re in a state that currently has no confirmed cases, the U.S. Chamber of Commerce advises every business owner to have a plan/strategy for conducting business in case of disruption to regular workplace routines.
“I urge all U.S. businesses, especially those who might still lack an action plan to download these documents and build their own response. Now is the time… to listen to experts, to stay informed, and to take reasonable measures to prepare. Now is not the time to overeact and panic.”
— Thomas J. Donohue, CEO of the U.S. Chamber of Commerce.
Coronavirus prevention practices suggested by the Chamber of Commerce and the CDC include:
- Encouraging all sick employees to stay at home
- Sending any sick employees home immediately
- Sanitizing your working environment and providing disposable wipes for routinely wiping common surfaces like doorknobs
- Avoiding travel (as of March 13, passenger air travel to/from Europe is halted)
- If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure in the workplace but maintain confidentiality as required by the Americans with Disabilities Act (ADA). Employees exposed to a co-worker with confirmed COVID-19 should refer to CDC guidance for how to conduct a risk assessment of their potential exposure.
As additional measures, small business owners should consider:
- Setting up a remote workplace — this can be very handy to keep any panic and unnecessary conflict between employees at bay. For any team that can work or manage employees remotely but currently does not offer such an option, now is a great time to look into making that work.
- Keeping clients in the know about protective measures — when shipping or customer service slows down, always help customers understand that you’re doing the best to take care of the situation and care for your employees. The worst you can do for customer service is keep clients in the dark.
- Having a sick-leave strategy in place — with no official legislation as to paid sick-leave in the USA, it’s up to small businesses to work out a strategy where their team feels heard and cared for.
The coronavirus outbreak poses short-term disruption and economic trials for small business. But experts agree that by preparing ahead of time, your small business can come out of it smarter and stronger.
No matter what your industry and location, a good question to ask yourself right now is — which of these steps will I take to keep my business running smoothly and my employees protected?