Local business advocates say that the stimulus bill that passed through Congress on Tuesday — which contains a second round of Paycheck Protection Program loans worth hundreds of billions — is exactly what small businesses in Maryland need to stay afloat right now. But despite enthusiasm over this second round of PPP, advocates are lamenting the bill’s lack of liability protections and failure to distribute funds to local and state governments.
Without liability protections, small businesses could find themselves debilitated by frivolous lawsuits that they can’t afford to defend, said Mike O’Halloran, director of the Maryland chapter of the National Federation of Independent Business.
O’Halloran said that advocates will be pushing for liability protections at the state level once the General Assembly convenes next month. A bill, sponsored by Sen. Christopher West, that will offer these protections to businesses has been prefiled ahead of the 2021 session.
“We’re not looking for anything like blanket immunity,” O’Halloran said, emphasizing that the bill would serve to protect companies making their best efforts to protect their employees from COVID-19, not the “few bad actors” who are throwing caution to the wind.
Advocates are also concerned about the lack of funding for state and local governments; the most notable use for those funds, according to Ashley Duckman, vice president of government affairs for the Maryland Chamber of Commerce, would be supplementing the state’s dwindling unemployment insurance trust fund.
“We know that we continue to have a record number of claimants drawing off the fund,” Duckman said. “Employers are responsible for backfilling that fund in the form of unemployment insurance taxes, so we know we’re going to see a very large increase in those for employers come 2021, and state and local funding would really have helped to offset that.”
Despite these notable absences, advocates are enthusiastic about the second round of PPP loans. O’Halloran commended PPP as a “vital financial assistance tool, and (a) proven one,” citing Maryland NFIB members’ appreciation of the program when it originally debuted as a part of the CARES Act.
The program comes with some welcome changes, such as newly allowing organizations that hold 501(c)6 status, which includes state and local chambers of commerce, to receive loans.
There are also restrictions on which businesses can receive a second loan; to qualify, the business must have fewer than 300 employees and must demonstrate that their revenue decreased from the previous year by 25% in at least one quarter.
These changes will ultimately favor the businesses that need the most help, Duckman said.
“I think what this is intended to do, these restrictions, in terms of the fact that it’s a second draw, is to weed out those who really are hemorrhaging and really need the assistance, versus those who are just hedging and may be doing okay,” she said.
Industries that have continued to thrive amidst the pandemic, such as home repair, will likely be left out due to the caveat relating to revenue decreases.
“Companies like that, they’ve been able to weather this storm a little bit better,” O’Halloran said. Meanwhile, other industries — personal services and hospitality especially — have been struggling since March. “So, the fact that Congress put in some parameters that make it a little bit easier for them to get to the front of the line? That’s certainly a good thing.”
Duckman also commended the bill for addressing complaints that business owners had had about the initial PPP, such as simplifying the loan forgiveness process and stating that expenses paid for with forgiven PPP loans are tax deductible. But she also recognized the potential for further challenges to arise.
“Like this entire pandemic, I think we’re building the plane as we’re flying it,” Duckman said. “Certainly this new package addresses a handful of things that were concerning … but with any large stimulus package, I’m sure that new challenges will be emerging and we’ll look forward to tackling those as we unpack this.”
Other parts of the bill will affect business owners indirectly, she added. Firstly, the bill allocates billions to child care facilities, a boon for employees who have to go into work but cannot send their children to in-person schooling. The bill also includes around $8 billion towards vaccine distribution, which many employers see as key to getting workers back into the office.
“All components of the bill really lead back to support for individuals which leads back to support for small businesses,” she said. “It’s really just a broad swath of aid … I think all components of it lead back to creating a strong foundation for recovery.”