Small businesses everywhere have been hit particularly hard by mandatory closures and safety measures required to help slow the spread of the coronavirus (COVID-19).
On Friday, Alabama U.S. Sen. Doug Jones, a member of the Senate Banking Committee, proposed a new model to direct money to small businesses by funding payroll service companies. The “Small Business Lifeline Fund” would establish a new fund that would offer short-term, no-interest “bridge” loans to employers that would be directed through their payroll processing company.
“While we’re all taking drastic steps to help stop the spread of the virus, we have to do the things necessary to help keep our small businesses afloat and keep our workers paid during this time,” said Jones. “By providing a new fund for loans that small businesses can process directly through their payroll companies, we can cut the red tape that would otherwise slow down money getting into the hands of the workers who need it most. The Small Business Lifeline Fund is a creative solution that we could implement quickly and on a short-term basis to help fill this gap.”
The Small Business Lifeline Fund would:
- Offer loans to fund up to 75-percent of a business’ last three months of payroll;
- Provide money directly to businesses and workers without the bureaucratic obstacles they would otherwise face in getting loans from a bank at this time;
- Help alleviate pressure on the unemployment insurance program by keeping workers paid;
- Ensure payroll taxes continue to be paid in order to protect important programs like Medicare and Social Security.