The $2 trillion federal relief program could be a lifesaver for Maine businesses struggling with impacts of COVID-19. But will the relief come soon enough?
Get Instant Access to This Article
Subscribe to Mainebiz and get immediate access to all of our subscriber-only content and much more.
- Critical Maine business news updated daily.
- Immediate access to all subscriber-only content on our website.
- Bi-weekly print or digital editions of our award-winning publication.
- Special bonus issues like the Mainebiz Book of Lists.
- Exclusive ticket prize draws for our in-person events.
Click here to purchase a paywall bypass link for this article.
Maine business leaders reacted with gratitude but also some trepidation about a $2 trillion federal relief plan to help businesses struggling from the impact of the coronavirus.
The agreement will provide billions in loans to businesses up to 500 employees — which would cover a wide swath of Maine businesses impacted in recent weeks.
The bill includes $367 billion in loans for small businesses, $500 billion in loans for larger industries, including airlines, and $150 billion for state and local governments, according to published reports.
“I’m grateful for the impact it will have. There’s a very immediate concern businesses face — by virtue of the order — find themselves closed to operations. They realize the priority of being able to retain their workforce,” Dana Connors, president of the Maine State Chamber of Commerce, told Mainebiz.
He cited, in particular, loans that would be administered through the Small Business Administration, that would provide relief to companies of 500 employees or fewer.
“That would cover 90% of Maine companies,” Connors said. “It would allow them to meet payroll. This allows businesses to really bridge the gap.”
While business leaders in Maine are grateful for the aid, some expressed fear that it will come too late for some businesses already on the ropes.
“Our concern is that aid may be too little, too late for many small businesses that have had to close doors and lay off workers,” said David R. Clough, Maine state director for the National Federation of Independent Businesses.
He cited a JP Morgan Chase study of 600,000 small businesses that showed that the median had enough liquidity to last 27 days. Restaurants had the least liquidity, enough to stretch 16 days, while real estate companies had the most, at 47 days.
As part of the relief package, Clough cited the paycheck protection program will allow business owners to apply for a forgivable loan through a bank. If employers keep employees on payroll or use the money for rent, lease, mortgage, utilities or debt finding, in eight weeks the loan will be forgiven. Also there is a 10-year loan with maximum 4.0% interest rate.
“Money could be used to maintain jobs or rehire workers, pay rent or meet debt obligations,” Clough said.
David Stone, Portland-based entrepreneur and founder of CashStar and Forager, said his initial impressions were that the $367 billion in small business loans “is great for Maine, since we are a small business state with 99.3% of all businesses in the state considered small, and employing 285,000 Mainers.”
“The devil, of course, is in the details,” Stone added. “How will it be administered? Will there be stipulations and qualifications Or are all [small-to-medium sized businesses] be eligible? Are our banks able to process and respond quickly, especially during this mostly virtual work space time, and will the paperwork and admin not be burdensome and easy?”
