What's in the coronavirus bill for Silicon Valley
There are a few provisions for Silicon Valley in the massive $2 trillion package to cushion the coronavirus' economic impact that Congress is on the brink of passing.
Why it matters: Some startups are facing layoffs and shutdowns, and millions of gig economy workers and Airbnb hosts are being strained by the sudden shift in consumer behavior.
Startups: They may qualify for the $350 billion small business loans program that’s part of the package, aimed at companies with under 500 employees. But one hurdle will likely prevent most of them from doing so.
- Under "affiliation rules” that are standard for the Small Business Administration, which will administer this program, companies with minority investors — venture capitalists, in this case — have to count employees of fellow portfolio companies. This would put many venture-backed startups above the 500-person cutoff.
- What’s next: The National Venture Capital Association, which has been lobbying Congress to waive these rules, says there’s still a chance this could be amended as part of the guidance Treasury and the SBA will be issuing soon. The association successfully lobbied to remove a provision from the bill that would have required startup founders to personally guarantee their business' loans.
- Yes, but: Startups still may qualify for other small tax breaks and deferrals baked into the bill.
Gig economy: The bill provides two avenues for gig economy workers to get financial relief — small business loans and unemployment benefits.
- On Monday, Uber CEO Dara Khosrowshahi sent a letter to President Trump asking that gig economy worker be included in the stimulus package.
Short-term rental hosts, who rent out their properties via Airbnb and other marketplaces, will also get a bit of relief.
- Hosts may be eligible for expanded unemployment benefits and small business loans, if they meet certain criteria.
- Airbnb, which has received strong backlash from hosts for allowing all travelers to get refunds, lobbied Congress earlier this month to get these provisions into the bill.
Yes, but: Much of this is theoretical for now — the test will come when companies and individuals actually try to apply for these programs.
- And if the process becomes messy, it won't be surprising if workers and rental hosts get even more frustrated with gig economy companies for not providing more financial help.