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ICYMI — NYT: Small-Business Failures Loom As Federal Aid Dries Up

Small businesses in North Carolina and across the country are hurting and looking for help from Congress as Senator Thom Tillis is on vacation after walking away from COVID relief negotiations. With Tillis and Senate Republicans refusing to negotiate, the Paycheck Protection Program and federal unemployment benefits have expired as spending has decreased, hiring has slowed down and unemployment numbers are on the rise. 

It’s past time for Tillis to do his job, return to Washington and secure critical relief for North Carolina small businesses. 

Cal has repeatedly stood up for North Carolinians and called out the harmful consequences of Congressional inaction. Cal will continue calling on Congress to do its job and reach a deal to help North Carolinians and get our economy working. 

New York Times: Small-Business Failures Loom As Federal Aid Dries Up

By Ben Casselman

September 1, 2020

  • The United States faces a wave of small-business failures this fall if the federal government does not provide a new round of financial assistance — a prospect that economists warn would prolong the recession, slow the recovery and perhaps enduringly reshape the American business landscape.
  • Tens of thousands of restaurants, bars, retailers and other small businesses have already closed. But many more have survived, buoyed in part by billions of dollars in government assistance to both businesses and their customers.
  • Now that aid is largely gone, even as the economic recovery that took hold in the spring is losing momentum. The fall will bring new challenges: Colder weather will curtail outdoor dining and other weather-dependent adaptations that helped businesses hang on in much of the country, and epidemiologists warn that the winter could bring a surge in coronavirus cases.
  • The challenge has been particularly acute for Black-owned businesses, which were more than twice as likely to close down in the early months of the pandemic than small businesses over all, according to research from the Federal Reserve Bank of New York. Black-owned businesses were more likely to be in areas hit hard by the virus, had less of a financial cushion and were less likely to have established banking relationships, which put them at a disadvantage in seeking loans under the emergency Paycheck Protection Program in the critical first weeks that the aid was available.
  • Economists say there is time to limit the damage. Despite a rocky start, the Paycheck Protection Program eventually paid out more than half a trillion dollars in loans and probably saved many businesses from failure, according to research from economists at the University of Illinois and Harvard. But the program lapsed in August, and if Congress doesn’t move soon to replace it, the earlier effort could end up delaying failures rather than preventing them.
  • “I can survive because I’m betting on another stimulus package,” Ms. Combs said. “But without that, we start to really teeter.”