Small-business owners like myself, with limited income flow as a result of coronavirus-related safety measures, are grappling with the decision either to retain employees who depend on us or use whatever cash we have to forego the risk of delayed creditor payments.
My sister and I own Integrity Squared CPA’s and my family also farms in Stockton, Mo. We raise cattle for beef consumption as well as operate an agri-tourism venture. Social distancing requirements mean our customers won’t be able to come to the farm to pick this year’s crop of strawberries, we’ve seen record low prices for our cattle, and the small businesses that are our main source of income in our accounting firm are on shaky ground.
Fortunately, I will not have to choose between keeping employees who have worked for my family for over 20 years on payroll and keeping the lights on thanks to a provision in the stimulus bill signed by President Donald Trump and voted for by my representatives: Sens. Roy Blunt and Josh Hawley and Rep. Vicky Hartzler.
In the “Coronavirus Aid, Relief, and Economic Security Act,” the relief package signed into law by Trump, is a provision that establishes the “Paycheck Protection Program,” designed to encourage employers like me to retain or rehire employees.
“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” says Treasury Secretary Steven Mnuchin. “If you go and hire back your workers for eight weeks you will have a forgivable loan and the government will pay for that.”
Business owners with 500 or fewer employees are eligible to apply for the low-interest loan program. The first payment is due six months after the loan is granted, and the loan must be paid back within two years, unless a business qualifies for full or partial loan forgiveness.
“Speed is the operative word,” says Small Business Administration Administrator Jovita Carranza. “Applications for the emergency capital can begin as early as [late March], with lenders using their own systems and processes to make these loans.”
The expedited cash flow comes at a time when rent, utilities, mortgage, and invoice balances are due or past due. My business must receive this assistance so that we don’t have to fold our operations, and my employees are forced to go on unemployment when a record 26 million Americans have been forced to do so over the past five weeks.
My employees can’t afford the uncertainty of unemployment during this time of stress. This program isn’t a long-term solution, but it helps bridge the gap between now and when America defeats this pandemic.
Until then, I’m grateful that, because of the Paycheck Protection Program, the accounting firm, ranching, and tourism businesses we’ve spent blood, sweat, and tears building won’t be swallowed up. I’m also grateful that my employees won’t lose as much ground building their wealth and planning for their families’ future as they otherwise would if this program didn’t exist.
Kalena Bruce is a Certified Public Accountant in Missouri and former chairwoman of the American Farm Bureau’s Young Farmers and Ranchers Committee. She is a member of Job Creators Network, a small business advocacy group.