Many businesses, especially in the trade, catering or consulting sectors, are on the verge of bankruptcy
About 100 executives from the major US and multinational corporations, such as Walmart, Microsoft and Merck, as well as federal business associations, in a letter to US lawmakers and senators called for an agreement soon on a new small business support program.
Negotiations continue in Congress, where Democrats and Republicans failed last week to agree on a plan to support households and businesses affected by the new coronavirus.
In their letter, the associations and large companies predict that there will be a “wave of permanent closure” of businesses if nothing is done by early September and a “potentially catastrophic” job loss by the end of the year.
“We know that small businesses are our essential for the country’s economic and social health”, noted in the letter that was written by the founder and former managing director of Starbucks chain, Howard Schultz: employ almost half of private-sector employees and produce 44% of the US GDP. Many of them, especially in the trade, catering or consulting sectors, are on the verge of bankruptcy following the measures taken by the authorities to curb the spread of Covid-19.
As part of a gigantic US economic recovery plan agreed in the spring, when economic activity had virtually stalled, Congress and the administration of President Donald Trump have provided more than $ 521 billion in loans to small and medium-sized enterprises. But this program, the Paycheck Protection Program or PPP, has come to an end.
“A new PPP would certainly help many of these businesses, but the areas that have been most affected will need more and longer-term support. Although our country reopens, this does not mean that we are returning to a normal state and many companies will need to close again. “Most of these small businesses do not have enough money in the bank to deal with a smaller turnover and reduced customer base for many months,” the letter concludes.