The $2.2 trillion stimulus package passed by Congress is considered a major benefit for businesses struggling to stay open. Forgivable loans available for Louisiana businesses, for example, would allow them to cover their operating costs for eight weeks.
U.S. Rep. Steve Scalise, the No. 2 ranking Republican in the House, told The Advocate, “That will help businesses hold on through this crisis and bring their workers back.”
The newspaper said the forgivable loan provision would likely provide a crucial lifeline for businesses in the coming days as the nation copes with the effects of the coronavirus on the world economy. Statistics from the U.S. Labor Department make it clear financial aid of this magnitude is essential.
Last week, 3.3 million people filed for unemployment insurance. The Advocate said that was easily the highest number in 50 years of data, which dwarfed the highest previously weekly figure of 695,000 recorded in the depths of the 1982 recession.
The story in Louisiana was similar. About 10,000 people are filing unemployment claims every day by phone or online. However, the Louisiana Workforce Commission said the number surged to 14,597 Wednesday, compared to the normal average of 300 per day.
One bank official told the newspaper businesses would be foolish not to be interested in the loans. Companies would have to maintain their pre-coronavirus hiring levels for the entire loan to be forgiven.
A policy analyst for the Louisiana Association of Business and Industry said 100 business leaders jumped on a conference call with the state's congressional delegation, and the loan program was the main topic.
“Speed is everything right now,” the analyst said. “We have members telling us they're taking it day by day to see if they can stay open. We're encouraging each business to talk to their banker to see if this makes sense to them.”
A co-owner of New Orleans restaurants told The Advocate he was already in contact with his banker. He said he had to lay off nearly 400 workers while retaining 100, and he hopes the loan program will allow him to hire at least some of them back.
Non-profits will also benefit. A New Orleans foundation president said they are also fragile in terms of their ability to stay open. Others said the loan program is much faster than the Small Business Administration.
Congress took much longer than it should have to enact the stimulus, but it appears it will give the nation's economy an essential shot in the arm.