Franchises Need Additional Liquidity to Build Off the Success of PPP
The CARES Act, and specifically the Paycheck Protection Program (PPP), provided a temporary lifeline to thousands of franchises and their employees, but many businesses continue to face liquidity issues that make meeting upcoming rent payments, payroll, and other obligations a challenge. As local and state governments contemplate additional closures and restrictions due to spikes of COVID-19 cases around the country, we strongly urge the U.S. Congress to provide additional support to local businesses who will face shutdowns through no fault of their own.
IFA believes that Congress should build on the success of the infrastructure built for the PPP, rather than reinventing the wheel. We support a broad, need-based approach to business liquidity, given the vast array of sectors we represent. That approach will ensure that small businesses are treated equally and that resources will be allocated to the businesses that need them the most.
ASKS & TALKING POINTS
Without additional assistance, many businesses will either fail or be overwhelmed by debt in the long term. For these reasons, we are recommending that Congress advance additional policies to provide meaningful relief and liquidity to franchise workers and their families. We need policies that help franchise small businesses retain employees, meet lender obligations, and ensure a safe, clean, and compliant environment for their employees and customers alike.
These policies should include the following:
A combination of additional loans that can be converted to grants through the Paycheck Protection Program, in addition to long-term, low or zero interest loans to small- and medium-sized businesses in affected industries. Specifically, IFA supports:
- The Paycheck Protection Small Business Forgiveness Act, which would streamline forgiveness of PPP loans for small businesses
- The Prioritized Paycheck Protection Program (P4) Act, which would provide additional PPP funding for hard-hit small businesses with 100 employees or less
- The Relief for Main Street Act, which would complement federal relief efforts for small businesses through state and local emergency grant funding
- The RESTART Act, which would provide long-term, low interest loans to small- and medium-sized businesses
Expanded refundable tax credits to keep employees connected with employers, in addition to assistance for unexpected costs related to cleaning supplies and personal protective equipment. These goals are achieved through the following bills:
- The Jumpstarting Our Businesses’ Success Credit (JOBS Credit) Act of 2020, which will enhance the Employee Retention Tax Credit, better ensuring employees can stay connected to their employers during the pandemic
- The Clean Start: Back to Work Tax Credit, which will create a temporary tax credit to assist business owners who responsibly safeguard their workers and customers during the reopening of the economy
- The Reopening America by Supporting Workers and Businesses Act of 2020, which will help local businesses rebuild their workforce quickly by turning unemployment benefits into a back-to-work bonus
Additionally, we support tax credits or other relief to facilitate virtual training of future franchise business owners and employees so that the economy can be jumpstarted when it is safe to reopen everywhere. With franchise inquiries increasing, it is clear the demand for new small business ownership remains high, but challenges training these new owners will restrict growth absent financial support.
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