More than 3 million small businesses in the United States have closed since February because of the coronavirus pandemic and without any "significant stimulus" plans available, millions more will follow, former Starbucks chairman and CEO Howard Schultz said Tuesday.
"This is a five-star emergency," Shultz said on CNBC's "Squawk Box." "If we continue down this path with no significant stimulus, we estimate that 35% to 40% of the 30 million small businesses in America will begin to permanently close by Labor Day."
He has spearheaded a letter signed by a coalition of more than 100 of the nation's top business leaders to top House and Senate lawmakers calling for federally guaranteed loans at favorable terms that will allow small businesses to sustain themselves through 2020 and 2021, not just for the next two to three months, but Schultz specified that they are not calling for a "bottomless handout."
"This is low-interest money federally backed by the government that will be paid back over time," said Schultz. "However, I do believe that the businesses facing the most dire consequences in terms of their inability to survive should be given forgiveness at certain points."
He added that even though at least $1 trillion would be needed for the loans, the economic shortfall of allowing the nation's small business to close would be worse.
If the businesses close, that will have a "significant catastrophic effect on the economy," said Schultz, which will be made even worse because Black and minority people own and operate so many of them.
"These are mom and pop, restaurants, beauty salons. These are the lifeblood of every community," said Schultz. "This is not the time for politics. This is really a defining moment of how bipartisanship and American capitalism can benefit the American worker, small businesses, and the American people at large."
"I think the 100 CEOs who signed this letter in support of the RESTART Act is that all roads should lead to small business relief in any stimulus package that Congress approves," said Schultz, now the chairman emeritus of Starbucks commented.
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