- The motion is adopted.
(group cheering)
(gavel cracking)
- [Narrator] On March
27th, the House passed
the biggest stimulus
package in American history,
and included in it was
more than $350 billion
for small businesses.
- We're gonna keep our
small businesses strong
and our big businesses strong,
and that's keeping our country
strong and our jobs strong.
- [Narrator] But for many
small business owners,
it's simply not enough.
- If you look at it, it's a
white-collar, work from home,
kind of executive, or senior
employee protection program.
It is not a blue-collar,
very small-business--
- Main streets.
- Main streets
- Business protection program.
- [Narrator] Liza Fox and Michael Campbell
opened a children's play zone in 2017,
and shortly after, they expanded it
to include a coworking space.
Elemeno is just a few
blocks away from Congress
in Washington, D.C.'s
Capitol Hill neighborhood,
and since expanding,
it's become a one-stop shop for families
to work, learn, and relax.
After successfully growing
the business for three years,
the couple had started on plans to expand,
but, like millions of
small business owners
around the country,
Liza and Michael had to
close up shop in mid-March
as the coronavirus
pandemic swept the country.
They suspended all of
their membership dues,
which means there's no incoming revenue
and they're still on the hook
for all of the outgoing costs,
and due to the nature of their business,
there was no way for them
or their four employees
to work from home.
- We have some of the same
employees we had when we opened,
so they're part of the extended family.
When we shut down, we of course gave them
as much notice as we had (laughs)
that it was going to happen,
and with no income, we
have limited options
for continuing to pay them.
Now we did, we already
offered paid time off
and some other benefits,
and then we're going to
provide another paycheck
out of the business' coffers
for this next two weeks,
so they will have had
another full month's pay,
but that's with zero income on our end
and without any government assistance
coming through either yet.
- It's vitally critical
that these small business
are able to make it through.
- [Narrator] Mark Zandi
is a Chief Economist
at Moody's Analytics.
- There's 7.8 million
business establishments
across the United States.
Only 20,000 of them have
more than 500 employees,
so the vast majority
of businesses out there
are a so-called small business.
If you add up all the
jobs working at companies
with fewer than 500 employees,
it's about half of all of the
jobs in the United States,
so it's a big chunk of the economy.
If you're less than 50 employees,
that accounts for roughly 25%
of all jobs in the country.
If you have less than four employees,
about four and a half million of them
have fewer than four employees,
so the vast, vast majority of businesses,
companies out there are very, very small,
less than a handful of people.
- [Narrator] The CARES Act
is offering small businesses two things.
First is something known
as the Paycheck Protection Program or PPP,
loans designed to keep
employees on payrolls
for eight weeks, and that will be forgiven
if companies retain or rehire
most of their employees.
It also says that the loan
can be used for other costs,
but the caveat is that
only 25% can be used
on things like rent or utilities
in order to meet the criteria
for the loan to be reimbursed.
The other support offered in the bill
is the Economic Injury
Disaster Loan Program,
and that promises up to $10,000 in grants
for eligible applicants,
but as Liza and Michael
found out after applying,
companies are only able to
receive $1000 per each employee,
half of what they were expecting.
- [Woman] Okay, Alexander,
are you ready to go down?
- [Narrator] While these two programs
do provide limited relief for Elemeno,
the couple argues that the aid
is mainly supporting their employees
and it is not going to
keep the business alive
for their workers to return to.
- Everything you see in
this pie chart is fixed
except for about 3%
that has a little bit of
variability in supplies,
but our rent is this blue,
49% of our monthly expenses,
and that's high, we recognize that,
but our rent is our space
and our space is our product.
Our payroll is the orange.
That's strictly payroll,
that's not us as business
owners getting any payments,
and then the others are fixed expenses,
so none of those things go away
even though our door is closed,
so with the government programs
that we have applied for
and hope to receive, that does help us
with this payroll chunk,
with the orange 29%.
That's great, because
we love our employees
and we want to help them
through this tough time.
That also is the only thing we had
any flexibility on in the first place,
so, unfortunately, if we needed to,
we could lay off our
employees and save that 29%.
It doesn't help us with the other 71%
of our fixed monthly expenses.
The $10,000 Economic Injury
Disaster Loan advance
helps, would help, of course.
It would cover this chunk,
this assorted others
for less than two months, that $10,000,
or it wouldn't cover even
one month of our rent.
- [Narrator] At the heart of one
of Liza and Michael's complaints
is who gets the money.
They say it benefits companies
with large payroll costs
and only provides limited aid
to cover rent and utilities,
which is essential for small,
main street businesses to survive.
- It really is the burden of
unemployment passed on onto us,
because we have all the
administration, right.
We're doing all the applying,
we've had lots of back
and forth, lots of stress
between trying to figure out
which bank will offer it to us.
At the end of the day, we pass
the money to our employees,
and we are closed.
- If you're a company where
you don't have many employees,
you're not gonna benefit as much,
but from a broader
macroeconomic perspective,
I do think it makes sense
to be focused on workers
and making sure that, you know,
businesses hold onto those workers.
And we gotta avoid business
failures and bankruptcy.
I mean, that's gonna be really key,
because if a lot of these
businesses go out of business,
if they fail, if they go bankrupt,
when employee workers
won't have a business
to go back to when the virus passes,
and it'll diminish our economy.
- [Narrator] In mid-April,
the $350 billion loan program
for small businesses ran out of money.
A fresh round of aid is being
negotiated by lawmakers,
but details are not yet clear.
In the short-term, the family can get by.
Their landlord said
they could defer payment
on one month's rent,
plus Michael gets income
from another startup
that's not been hit hard
by the crisis so far.
The immediate question on the
minds of small business owners
like Liza and Michael
is what the next round
of aid will do to keep
their businesses alive
and support the economic recovery.
- Every contract we have to sign
have personal guarantees
from us as individuals.
We can't file Chapter 11 as a corporation,
so if the business is not able to survive,
not only are we out of a job
and out our investment in the business,
but we are personally
liable for these debts
that we have no control over.
(pleasant electronic tones)
