More than 100 CEOs from some of America's largest companies urged Congress to provide longer-term relief to small businesses devastated by the coronavirus pandemic.
In a pleading letter, Salesforce CEO Marc Benioff, Starbucks founder Howard Schultz, former American Express CEO Ken Chenault, and Walmart CEO Doug McMillon and others asked lawmakers for a list of measures that would help small businesses, which contribute 44% of the country’s GDP and employ half the nation’s private-sector workforce to stay afloat.
Other company leaders who signed onto the letter: Google CEO Sundar Pichai, Union Square Hospitality Group CEO Danny Meyer, Marriott CEO Arne Sorenson, MasterCard CEO Ajay Banga, Ulta Beauty CEO Mary Dillon, and former HP CEO Meg Whitman.
“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,” the CEOs wrote.
Enhanced unemployment benefits expired Friday and the Paycheck Protection Program, which launched in April, ends on Aug. 8. Negotiations between lawmakers and members of the Trump administration, including Treasury Secretary Steven Mnuchin, are ongoing over the next steps.
The CEOs asked for another round of PPP, but noted that "the hardest-hit sectors will need much more significant and sustained support,” pointing out that many businesses may be required to close once again. Through July 17, $518 billion has been paid out in more than 4.9 million loans. through the PPP.
"To survive until a vaccine is widely available, millions of small businesses will require longer-term support from the federal government,” the leaders wrote.
What's needed, the letter says, is loans guaranteed by the federal government with favorable terms with lasting support well into 2021, flexibility in how they use the money, partial loan forgiveness for the hardest hit, speedy relief, and for the government to make sure money also goes to businesses that are owned by people of color.
As a model of legislation, the business leaders praised the bipartisan legislation put forth by Sen. Michael Bennet (D-CO) and Todd Young’s (R-IN) RESTART Act, which has many of these provisions.
"This is not a call for bottomless handouts," the CEOs wrote.
Underscoring the need for action, the CEOs said that every day without a plan makes recovery more difficult and that without immediate action, waves of permanent closures will lead to a domino effect of lost jobs, products, and services by Labor Day — which "could be catastrophic."
The stakes are especially high given the fact that the coronavirus does not seem to have an end in sight before a vaccine — and small businesses are hurting. In New York City, for example, already a third of small businesses may close permanently because of the economic destruction from the coronavirus. According to Yelp data over 2,800 small businesses have closed permanently since March 1, the Times reported Monday.
“Republicans and Democrats already agree that small businesses are essential to the fabric of our communities and economy,” the letter said in closing. “It is time to put that belief to work.”