The COVID-19 pandemic is sweeping across the globe, and it's already had a huge impact on the business community. Many small and mid-sized businesses are looking at closing their doors as customers and workers are told to stay home.
Some specific industries face specific prohibitions that are crushing their businesses, such as restaurants having to shut down dining rooms and offer only pick-up and delivery.
Lawmakers in Washington are working with the White House on an emergency stimulus package that aims to get money into people's hands. The details are changing quickly, but here's the current thinking on how small and mid-sized businesses could get some much-needed help.
Checks straight to Americans
The idea that's gaining the most traction in Washington is sending money directly to Americans. One idea involves making an immediate $1,000 cash payment to each person, with the idea of getting money into people's hands in the next couple of weeks.
Others are pointing to a sliding scale that would send larger checks to those with incomes below a certain amount. Either way, getting money to people is important not just for those who are struggling with being out of work, but also for businesses counting on their customers still being able to afford making their regular purchases.
Targeted relief for businesses
In addition, the White House has said that it wants to see specific provisions to support small businesses. The Treasury Department and the Federal Reserve are taking steps to open more flexible credit terms for businesses, making small business loans and grants more readily available to those in need.
One proposal would have the Small Business Administration essentially guarantee small business loans, helping to persuade lenders to relax credit standards and get money into business owners' hands.
Read about the SBA’s definition of a small business.
The IRS has also allowed small and mid-sized businesses to delay tax payments they'd have to pay for 90 days, giving them some breathing room in terms of cash flow. More dramatic relief hasn't yet materialized.
For a while, officials were thinking about a temporary payroll tax holiday, which would have not only put more money into workers' paychecks, but also given businesses a break from having to make their employer contributions to Social Security, Medicare, and unemployment payroll taxes.
However, some lawmakers criticized the delayed impact those moves would have, favoring more immediate cash payments instead.
Will politics get in the way of business relief?
The problem with the stimulus package for small and mid-sized businesses is that there are many competing opinions about the best way to provide a boost to the economy. As often happens, debate in Washington can lead to extended political wrangling and long delays in actually getting things done.
That said, there's a shared sense among politicians that America's businesses can't afford to wait for the relief they need. Settling for good now instead of perfect later is what most business owners want.
Now Washington just needs to get out of its own way and pass a stimulus package with some provisions favorable to small and mid-sized businesses.