The small-business loan program designed to keep workers employed is out of money, and some main street business owners hit by the coronavirus pandemic say that it simply is not enough to keep their business alive in the first place. Photo: B.A. Van Sise/NurPhoto
“There are roughly 19,000 businesses in the Phoenix area and most of these are small businesses with less than 500 employees. In fact more have less than 4 employees or in some cases exclusively independent contractors. Example, in-home care agencies. The CARES Act, unfortunately, does not benefit these smaller businesses because the loan advance is tied to the businesses’ past 12 months’ payroll costs. So the businesses with more employees are eligible for more relief under the Act, which relief can then be used for retaining talent and pay certain fixed costs. But in the case of small businesses such as the neighborhood Boba tea shop where there are independent contractors, these businesses are not even eligible to apply for the Paycheck Protection Program. It’s understandable that Congress wants businesses to retain employees but if these businesses don’t receive the funds they need to pay their fixed costs to keep the lights on, there won’t be any businesses left for these employees to go back to.” ~Shruti Gurudanti, Attorney at Rose Law Group
