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Billionaire Mark Cuban told us his plan to save America's entrepreneurs — and the biggest disasters the government must fix

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  • In fewer than 13 days, the first round of $349 billion allocated for small-business relief under the CARES Act was used up.
  • Even with the second round in full swing, the funds barely scratch the surface of the 60 million employers and freelancers desparate for help.
  • Mark Cuban told Business Insider that major changes needed to be implemented to address the problems with the most recent package.
  • Cuban said businesses would need enough money to cover an extended reopening period, as well as an effective testing strategy that instills confidence in returning workers. 
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After a rocky rollout, the $670 Paycheck Protection Program appears to have found its footing, but Mark Cuban says it's too late to save many of America's small businesses.
"I think we missed the window of opportunity to pay small businesses to keep their employees," the Dallas entrepreneur said in an email to Business Insider.
The primary goal of the program — to enable small businesses to retain their workers — is now in serious jeopardy on an employment landscape that has seen more than 33 million new jobless claims in recent weeks.
As Congress discusses a fourth package of relief and stimulus funding, Cuban thinks some major changes need to be made to address the problems facing small businesses and their workers.

The 'mechanics of the program' are out of whack

The Paycheck Protection Program's intent was solid — compensate workers by incentivizing employers to keep them on payroll, rather than sending them into the overburdened unemployment system. But "the mechanics of the program are now" out of whack, Cuban said, adding that businesses need more time.
PPP loans cover only eight weeks of payroll and operating costs, but as of mid-May, many businesses have already used up that time. Cuban said those who have been approved for loans could still run out of money before they're even able to reopen their doors.
"Employers need this money to bring people back in a manner that allows the funding to cover reopening of their companies," he said.
The next phase of relief will need more than just increased funding. Cuban said it would also need to cover costs for businesses over a longer period of time. If it doesn't, employers will have to reduce wages or hours, and some workers may prefer to remain on unemployment, he added.

Effective testing is needed to build trust

Testing isn't simply a health necessity; it's also needed to reopen the economy. To get people back to work, Cuban said employers needed the ability to go beyond providing a safe environment — they'll need to ensure that workers feel safe too.
Furloughed and unemployed workers may be reluctant to rejoin their former businesses if they think there's a likelihood of getting sick, especially if they will have new coworkers.
"Many of those people won't come back if the employer brings in new workers to replace those who prefer to stay on unemployment because of their concern they may get infected by the new, unknown individuals," Cuban said.
To address these concerns, a testing strategy that inspires confidence among workers is essential. That would require a coordinated effort between government and private-sector leaders, as well as a substantial amount of new funding.
SEE ALSO: Federal relief loans for small businesses just dried up. Here's what to do if you need $1 million dollars or more to stay afloat.
DON'T MISS: America's small-business owners hoped a $349 billion lifeline from Washington would pull them through the pandemic. Here's the inside story of how its launch spectacularly unraveled in 24 hours.
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* This article was originally published here Press Release Distribution

Source - https://www.businessinsider.com/?hprecirc-bullet

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