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A critical issue now is the small business loan program in the rescue bill. It’s actually a lot better than I think people realize. Smallish businesses can get big loans and if they use it to pay salaries and critical expenses (rent etc) the loans will be forgiven.
2/ Functionally it’s pretty similar to what they’re doing in the UK and Canada where the govt takes over the payroll for affected businesses. But I get the sense that it has not been effectively publicized. A lot of small businesses owners don’t know ...
3/ about it and they’re shutting down now. Either laying everyone off or going out if business. It also gets administered by banks. They don’t charge interest and they can’t charge fees. So if it works it’s not as bad as it sounds and ...
4/ it makes it easier. You don’t have to file something with the government. You just call up the local bank branch. But that part of the roll out seems gummed up according to a number of reports today. My point isn’t to say the program is perfect. And I think for now ...
5/ it only goes for 8 weeks. That will obviously have to be extended dramatically. The point is this can really keep a lot of businesses from going under RIGHT NOW and a lot of workers losing their paychecks RIGHT NOW. So it’s really important that word gets out because ...
6/ once a lot of these businesses go under they’re not going to come back. For some employees beefed up unemployment insurance will help a lot. But at scale, when the economy restarts those jobs may not be there because the companies won’t exist.
7/ So this really requires a massive public education campaign that literally starts like today.
8/ Part I left out at the top, you have to use it on salaries AND not lay people off - or lay very few people off - if you want the loan forgiven. And that’s exactly how you want it to work, the incentive you want to build in.
