The American Institute of CPAs (AICPA), the International Franchise Association (IFA), along with leading fintech payroll processors Intuit and Paychex, penned an open letter to federal officials indicating their willingness, and ability, to help mitigate the impact of the COVID-19 pandemic. In a letter to President Donald Trump, Congress, U.S. Treasury Secretary Steven Mnuchin, and Small Business Administrator Jovita Carranza, the group emphasized the need for expedient financial help for the nation’s reeling small businesses.
“Broad governmental proposals for bank loans and direct loans are good steps, and fast action is required. We need to quickly take an additional step to ensure small businesses continue to keep their employees paid,” the letter reads. According to information from the coalition, small businesses are responsible for employing close to 60 million people.
“The problem: It takes time to create new processes to distribute funds to small businesses–speed is of the essence here. An efficient and effective process would be to leverage established small business payroll processing that is already in place and can be marshalled immediately to protect jobs and preserve resiliency within the small business sector,” the letter continues.
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The letter urges the federal government to leverage existing payroll payment systems to meet the needs of small businesses and ensure they remain open during the healthcare emergency. According to the groups, these payroll processors handle close to 40% of all payments in the U.S. and have customers primarily comprised of businesses with 500 employees or fewer. “In this scenario, the federal government could set up a central payroll funding account that small business payroll processors could utilize so that millions of small businesses could continue paying workers during this time of crisis,” the letter reads.
The coalition calls for workforce protection in this instance, in which businesses using this central funding source would be required to maintain workforce levels, ultimately reducing layoff levels. Efforts to blunt the impact of COVID-19 have come from a wide array of actors including U.S. Treasury Secretary Steven Mnuchin, who recently announced measures to enhance liquidity and credit availability for workers, businesses and households
Mnuchin announced an expansion of a number of facilities under the purview of the Federal Reserve Act. The new programs will provide as much as $300 billion in financing. Further, the U.S. Treasury, by way of the Exchange Stabilization Fund, will provide $30 billion in equity to said facilities.
“This Administration is working with the Federal Reserve and will continue to take aggressive action to address liquidity issues.,” Mnuchin said in a statement. “We are committed to providing relief for American workers and businesses, particularly small and medium size businesses and critical industries that are most impacted by the coronavirus. We will take all necessary steps to support them and protect the U.S. economy.”
