The Home Furnishings Association in May became a key, early supporter of the RESTART Act. Now, perhaps just in time, the proposal is gaining momentum.
The Small Business Majority, a national advocacy organization, and other business groups have joined the push to include this new lending program in the next congressional recovery package. The House and Senate versions of the bill are picking up more co-sponsors of both parties every day – 52 in the Senate and nearly 100 in the House.
HFA has been closely connected to the RESTART Act from its inception:
- The primary Senate co-sponsor, Sen. Todd Young of Indiana, joined HFA’s Government Relations Action Team (GRAT) for a conference call in May.
- Matt Schultz, the leader of HFA’s GRAT, outlined the association’s legislative priorities to his congressman, Rep. Mike Kelly of Pennsylvania.
- Young’s office informed Rep. Jared Golden of Maine about HFA’s interest in the RESTART Act.
- Golden’s staff asked HFA to connect the congressman with furniture retailers in his district so he could gauge their need for additional borrowing opportunities through the Covid crisis.
- As a result, Kelly and Golden introduced the RESTART Act in the House.
New lending program may be needed
The act would create a new, longer-term loan program available to businesses of all sizes up to 5,000 employees. It would offer opportunities for loan forgiveness depending on business losses. Unlike the Paycheck Protection Program, it would not restrict how borrowers could spend the money.
The PPP was popular, but it came too early in the crisis for many borrowers to achieve maximum benefit. And, now it has expired. Writing to congressional leaders, the Small Business Majority noted that, “Another round of PPP would certainly be helpful for many of these businesses, but the hardest-hit sectors will need much more significant and sustained support. Although our country is in the process of reopening, it is hardly a return to normal, and many businesses may be required to close again. Most small businesses don’t have enough cash in the bank to weather more months of reduced revenue and customer traffic. To survive until a vaccine is widely available, millions of small businesses will require longer-term support from the federal government.”
Many furniture retailers are faring well now, as there is strong customer demand for products that improve their living and work-at-home spaces. Furthermore, furniture stores can operate safely and should not be forced to close their doors again.
But, the future is uncertain. Further spread of the virus, or new spikes in the fall and winter, could depress consumer spending. Businesses might need additional opportunities to borrow on favorable terms to preserve their continued viability. HFA for months has seen the RESTART Act as the right tool to provide sustained security for furniture retailers and other businesses.
Other groups see RESTART Act potential
The Small Business Majority agrees.
“At this moment of crisis, we urge you to transcend partisanship and forge meaningful agreement on an assistance package to help our struggling small businesses and, in turn, tens of millions of Americans,” it wrote to congressional leaders. “We believe that assistance should embrace the following principles:
- Federally guaranteed loans, at favorable terms, that will enable small businesses to transform and sustain themselves through 2020 and well into 2021. Support must last for longer than just the next two or three months.
- Businesses should have flexibility in how loan funds are used.
- The hardest-hit businesses should be eligible for at least partial loan forgiveness. Any forgiveness should be limited to small and mid-sized firms that have suffered significant revenue declines and are not publicly traded.
- Relief needs to be delivered expeditiously. Building on the existing PPP infrastructure would be one way to quickly stand up a new loan program.
- These funds must flow to all small businesses in need, particularly those run by people of color, who have traditionally had less access to capital. A portion of funds should also be directed toward strengthening community development financial institutions (CDFIs) and minority depository institutions (MDIs).
“Strong bipartisan support for Senator Michael Bennet and Senator Todd Young’s RESTART Act – which embodies all of these principles – demonstrates recognition of the need for this kind of sustained support. We believe something resembling the RESTART Act must be in this next package,” the letter said.
The need for Congress to act is urgent
“This is not a call for bottomless handouts,” it added. “It is a defining moment to show how capitalism can benefit all Americans, particularly entrepreneurs who have been forced to shutter or reduce the capacity of their businesses through no fault of their own.
“We cannot stress enough the urgent need to act. Every day that passes without a comprehensive recovery program makes recovery more difficult. By Labor Day, we foresee a wave of permanent closures if the right steps are not taken soon. Tens of millions of Americans have already lost their jobs in this pandemic. Allowing small businesses to fail will turn temporary job losses into permanent ones. By year end, the domino effect of lost jobs – as well as the lost services and lost products that small businesses provide – could be catastrophic.
“Republicans and Democrats already agree that small businesses are essential to the fabric of our communities and economy. It is time to put that belief to work. We urge Congress to support these principles in drafting the next round of COVID-19 relief legislation.”
Urge your representatives to support RESTART Act
“I am grateful these prominent business leaders are sounding the alarm that our nation’s small business community needs a long-term loan program like our RESTART Act to provide relief to America’s job creators and innovators, and millions of hardworking employees,” Sen. Young said in a news release. “We are in the middle of one of the worst economic crises this country has ever seen, and it is time for Congress to act in a responsible and meaningful way by enacting our RESTART Act.”
“Prominent business leaders are throwing their support behind the RESTART Act, because they know it’s what the hardest-hit Main Street businesses across the country need to stay afloat through the end of the year and into next year,” Sen. Bennet of Colorado added.
If you are not a member of the Home Furnishings Association, consider joining and adding your voice to ours as we engage with our government for actions that will help your business succeed.