It’s been a crazy 24 hours on the stimulus negotiation front. For months, lawmakers have been debating the details of a second stimulus package to follow late March’s CARES Act. Unfortunately, Democrats and Republicans have been clashing over a number of key issues — notably, boosted unemployment, state and local aid, and the price tag of a stimulus package itself.
On Tuesday, Oct. 6, President Trump called for stimulus negotiations to be paused until after the November election. But on the morning of Wednesday, Oct. 7 — just hours after initially attempting to pull the plug on stimulus talks — the president tweeted that lawmakers should immediately approve funding for both airline payroll support as well as a second round of the Paycheck Protection Program (PPP) for small businesses. The latter is actually good news, not just for local establishments in need of financial assistance but the commercial landlords who rent to them.
Small businesses need relief
When the PPP was first introduced, small businesses clamored for funding — for good reason. PPP loans are subject to 100% forgiveness if 60% of their proceeds or more are used to cover payroll costs. Since its inception, the PPP has saved over 51 million jobs, and it’s also prevented countless small businesses from permanently closing their doors.
But many businesses that received a PPP loan earlier in the year have exhausted that funding. And in the absence of a second round of aid, they risk not only having to lay off staff but possibly having to shut down altogether. That could be catastrophic for commercial landlords, who rely on small businesses to pay rent.
Though businesses that receive PPP funding must use the bulk of their loan proceeds for payroll purposes to be eligible for forgiveness, their remaining funds can be used for rent and other expenses. Getting that money into the hands of business owners could help them stay current as tenants, thereby sparing landlords the stress of dealing with delinquencies or, worse yet, vacancies.
Of course, some businesses have been hit harder than others during the pandemic. Restaurants, for example, have taken a beating, and many are behind on their rent. By quickly approving additional small business funding, lawmakers could prevent a major financial crisis. But at this point, they’ll need to act quickly, because the more they delay, the more likely small business closures will become.
Of course, just because President Trump indicated that he’d like to see another round of small business funding doesn’t mean it will actually happen. Democratic lawmakers in particular are invested in approving a large relief package rather than passing individual relief measures one at a time. But if there’s one thing lawmakers have agreed on throughout these past few months of stimulus bill negotiations, it’s that small businesses need help surviving the ongoing crisis, and another round of PPP loans could be a lifeline.
As such, those businesses, as well as the landlords who rely on them to pay rent, can take comfort in the fact that while an official deal hasn’t been reached, there’s clear support for targeted aid that could save small businesses from permanent ruin.