CEOs Predict ‘Wave Of Permanent Closures’ Unless More Relief Is Given To SMBs

Howard Schultz, the former CEO of Starbucks Corp., and dozens of other top executives urged Congress to support small- to medium-sized businesses (SMBs), including providing forgivable federal loans for those hardest-hit by the pandemic.

In a letter addressed to House and Senate leaders and signed by nearly 100 executives, including the CEOs of Walt Disney Co., Merck & Co., Alphabet, Walmart, and Microsoft, the executives called for swift action to help the nation’s struggling SMBs.

“We cannot stress enough the urgent need to act,” said the letter to Speaker Nancy Pelosi of California, House Minority Leader Kevin McCarthy of California, Senate Minority Leader Charles Schumer of New York and Senate Majority Leader Mitch McConnell of Kentucky. “… By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon. … Allowing small businesses to fail will turn temporary job losses into permanent ones.”

Published Monday (Aug. 3) on Schultz’s website, the letter warned the House and Senate about the potential for a more disastrous economic fallout ahead if more relief isn’t provided to SMBs

The executives are pushing for aid that builds on the Paycheck Protection Program (PPP). They called on lawmakers to support a measure that would extend the period of relief for the hardest-hit businesses that have seen their revenues decline.

Specifically, the executives said any legislation that will enable SMBs to sustain themselves through 2020 and into 2021, should be adopted, and relief must last longer than a few months.

While the letter praised the PPP, calling it a centerpiece of federal aid that has provided a short-term relief to many, the executives wrote any new loans should be delivered fast.

Some portion of the money should be directed to financial groups that cater to low-income areas, according to the letter.

The CEOs’ call for action comes as Democrats and Republicans remain far apart on a new stimulus package that would include a portion for SMBs. Each side is considering a second round of PPP, which was extended to Saturday (Aug. 8) and still has money available.

The business leaders said that by year end, the domino effect on goods and services in the country could be catastrophic.