For many U.S. small business owners, eight weeks of federal coronavirus relief won’t be enough to survive the pandemic’s economic damage, spurring calls from mom-and pop firms to extend the time frame.

The rescue plan for small companies, designed as a stopgap until life returns to normal, falls short for restaurants, hair salons and other small companies that are bracing for months of poor business. Long after the lockdowns are lifted, customers will face economic hardship and be wary of crowded spaces, say advocates who are calling for funding that’s not tied to a tight timeline.

”We’re not going to open our hotels in April, and we’re not going to open our hotels in May,” said Richard Born, a longtime New York City hotelier who has shut 40 operations qualifying as small businesses. “We’re hoping for July, and we are the poster child for the industries that have been hurt the most.”

With money from the $349 billion package for small businesses running out, the focus in Washington is on pushing for more funding to shore up a key portion of the economy. But without a change in the structure of the loans, advocacy groups say, many small businesses will fail despite the hundreds of billions in relief that have been laid out for them.

“A month or two, they might manage, but by the third month you get in the questionable zone,” said Richard Prisinzano, director of policy analysis at the University of Pennsylvania’s Penn Wharton Budget Model. “This is a short-term relief bill. It is predicated on the shutdowns being over in two months.”

The rub is in the conditions of the Paycheck Protection Program, known as PPP. Borrowers must use the loans to cover payroll over about eight weeks for the debt to be forgiven, and keep or rehire the same number of employees as before the shutdowns. The point is to ensure people continue to receive paychecks even as unemployment has skyrocketed in recent weeks.

Clock Ticking
The clock starts ticking on the first day of disbursement, meaning borrowers who got funding this week would be covered through mid-June. And the period covered by the program ends June 30.

That timing doesn’t work for Clara Osterhage, who owns hair salons in Ohio and other states and had to lay off hundreds of employees. She wonders what she’ll do with her employees if her businesses are still closed or limited at the end of the eight weeks.

“Do I lay them off again, which is not the nicest thing to do to these people who are already upside down?” she said.

Almost half of small businesses in a recent survey published in a National Bureau of Economic Research paper said they think the crisis will still be going on at the start of July. Many respondents to that question weren’t confident about their answers, reflecting the uncertainty of today’s world, according to the paper.

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