WASHINGTON, D.C. — The U.S. Chamber of Commerce today called for additional action to ensure American businesses of all sizes can stay open and keep employees on the job. Collectively, these actions will help avoid the potentially devastating economic effects from the spread of the coronavirus.
While the third coronavirus response package, the CARES Act, will provide much needed relief for small businesses and the hardest hit industry sectors, it fails to take care of the 68 million American workers that are employed by enterprises with more than 500 employees.
“Our primary principle remains clear and firm: No family and no business should go bankrupt because of the financial hardships caused by the coronavirus,” said Neil Bradley, executive vice president and chief policy officer, U.S. Chamber of Commerce. “We applaud the provisions for small businesses. In turn, unemployment should be the last resort for American workers employed by large employers as well. It’s imperative that we do everything in our power to keep employers and their employees solvent during this disruptive period.”
Today, the Chamber called on Congress to build on the Senate’s small business proposal for America’s larger employers, but with much less generous terms, via a“bridge loan.”
The "bridge loan" program should consist of:
- Federally guaranteed loans: Companies with more than 500 employees that have seen a revenue loss of 10% or more as a result of the COVID-19 outbreak based on the creditworthiness of the company in January 2020 would be eligible.
- Maximum loan amount: Three months of payroll expenses (including pro-rata healthcare expenses).
- Repayment: Loans would be repayable over five years.
- Employee retention incentive for severely impacted employers: Employers with more than 25% loss in revenue that maintain at least 90% of the employees at existing pay levels through December 2020 would have 10% of their loan forgiven. However, there are other improvements that need immediate attention to provide expedited liquidity to help all businesses cope with the economic effects of the pandemic.
- Backing: These loans would be issued by financial institutions through a credit facility administered through the U.S. Federal Reserve.
“Businesses across the country are beginning to face a liquidity crisis. Employers want to do the right thing and keep paying their employees, but many are going to need temporary help to do so. If we are going to avoid massive layoffs, Congress needs to act quickly and utilize existing tools with broad flexibility to keep businesses operational during this unprecedented time,” said Bradley.
This proposal, in addition to other actions recommended by the U.S. Chamber and those already initiated by the federal government, will ensure that businesses have increased liquidity, access to financing, and the ability to pay their employees as they weather the temporary loss in revenue from the virus.
The U.S. Chamber of Commerce is committed to helping American businesses respond to the coronavirus so they can support their employees, customers, and communities. Our members and the state and local chambers, who are on the front lines of this pandemic, need us now more than ever to help them through this significant disruption. We will continue working every day to help our country’s people, businesses, and economy weather this storm and emerge stronger—just as we have at other challenging times in our nation’s history. Visit uschamber.com/Coronavirus for more informaion.