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Small Businesses Could Receive $5B from Unspent COVID Relief Funds

Pequeños negocios

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A proposal is being debated in the U.S. Congress that would redirect some of the unspent COVID-19 emergency money to U.S. small businesses. The unspent funds total $5 billion in additional pandemic assistance.

Small businesses have been among the main economic victims of the pandemic. During the first year of the virus, they had to deal with a drastic drop in sales due to mobility restrictions imposed to contain the spread of COVID.

Durante la pandemia, muchos pequeños negocios tuvieron que incurrir en onerosas deudas para mantenerse a flote. (EFE)
During the pandemic, many small businesses had to incur onerous debts to stay afloat. (EFE)

In the second year, small business entrepreneurs had to make up for the lost labor force in 2020 and deal with the completely distorted supply chains due to COVID-19, which ultimately affected the operation of their businesses.

In March, the White House asked Congress to approve another $22.5 billion for a new pandemic spending plan, but the GOP wing of Congress rejected the proposal.

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With an inflation rate not seen in 40 years, public debt exceeding 125% of U.S. GDP, an economy affected by distortions in supply chains, and the uncertainty of war in Ukraine, many members of Congress would rather give new purpose to the unspent money that was earmarked for the pandemic than support the issuance of more debt.

Over the past two years, the United States has approved nearly $4.6 trillion in pandemic care budgets. To date, $3.63 trillion has been used, leaving nearly $1 trillion unexpended.

How would the new aid for small businesses be distributed?

Earlier this month some lawmakers agreed to a bipartisan plan to redirect $10 billion of the funds to small businesses and the health care sector.

“Importantly, this bill is comprised of dollar-for-dollar offsets and will not cost the American people a single additional dollar,” said Sen. Mitt Romney (R -UT).

If this bipartisan bill passes, $2.83 billion would automatically be shifted to two pandemic programs designed for small businesses: the Shuttered Venues Operators Grants and Economic Injury Disaster Loans.

Although the programs are no longer receiving applications, some small business owners argue that these programs continue to be needed and require more funding for some time.

Más de $26,000 millones se han repartido en ayudas a los pequeños negocios en Estados Unidos desde el inicio de la pandemia. (EFE)
More than $26 billion were distributed in aid to small businesses in the United States since the beginning of the pandemic. (EFE)

Some entrepreneurs argue that to stay in business they had to incur large amounts of debt during the pandemic, so their businesses would not be able to meet their liabilities without transfers from aid programs.

According to data from the U.S. Small Business Administration, the Shuttered Venues Operators Grants have provided more than $16 billion in government-backed loans to date.

Another $2.13 billion would be allocated to the State Small Business Credit Initiative, a Department of the Treasury program created in 2021, to which Congress provided $10 billion to spread among small businesses. The program is designed to direct money to states, territories and tribal governments for programs that provide venture capital or encourage banks to lend to small businesses.