Joint CARES 2.0 Letter: Airbnb, Etsy, Eventbrite, Thumbtack and Upwork to congressional leaders, May 6, 2020

Summary

Joint letter dated May 6, 2020, from Airbnb, Etsy, Inc., Eventbrite, Thumbtack and Upwork to Speaker Pelosi and Leaders McConnell, McCarthy, and Schumer with suggestions for CARES Act 2.0. It states that Congress has appropriated $659 billion to the PPP thus far, and urges more PPP funds, a covered period longer than eight weeks, and a set-aside for loans of $100,000 or less. It also urges Congress to let the SBA allow PPP proceeds on payroll, rent, utilities or debt obligations regardless of the percentage, to permit a second EIDL loan, and to remove EIDL's personal guarantee and collateral requirements. A further fund could support grants of 30 percent of 2019 gross receipts, up to $75,000.

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                                          May 6, 2020

The Honorable Nancy Pelosi                           The Honorable Mitch McConnell
Speaker of the House                                 Majority Leader
United States House of Representatives               United States Senate
Washington, DC 20515                                 Washington, DC 20515

The Honorable Kevin McCarthy                         The Honorable Chuck Schumer
Republican Leader                                    Democratic Leader
United States House of Representatives               United States Senate
Washington, DC 20515                                 Washington, DC 20515


Dear Speaker Pelosi and Leaders McConnell, McCarthy, and Schumer:

As leaders of organizations that bring consumers and small businesses together online to host
people in homes, hold in-person live events, sell handmade and vintage items, and find
professionals locally or around the country, we are managing the extent to which the
coronavirus pandemic has dramatically upended consumers’ lives and the livelihoods of the self
employed, sole proprietors, and small businesses that use our platforms to earn income. We are
grateful for the steps taken by the Congress and Administration to date and write to offer our
suggestions for CARES Act 2.0 to improve federal relief efforts so they are accessible to and
effective for the entire economy, as you intended.

Adjustments to the Paycheck Protection Program and Economic Injury Disaster Loans

With several weeks of data indicating who is and who is not benefiting from the Small Business
Administration support provided in the CARES Act, it is clear these funds are not yet reaching
many of the entrepreneurs who rely on our platforms to run their businesses. We make the
following recommendations to amend the Paycheck Protection Program (PPP) and Economic
Injury Disaster Loans (EIDL) in the next round of relief legislation:

   ●   Extend the PPP and Dedicate Funds for Small Loans​ – Congress has appropriated $659
       billion to the PPP program thus far. Despite that unprecedented level of aid, it is clear to
       us from our users that the magnitude of the current public health crisis will require a
       repeated infusion of federal funds. We urge you to appropriate additional resources to
       the PPP and to extend its covered period so loan proceeds can be used beyond eight
       weeks after the loan’s origination, as current law specifies.

       We further urge you to set aside a portion of new PPP appropriations for businesses that
       thus far have been disadvantaged in attempting to access the PPP, and to designate a
       percentage of these new resources to support loans of $100,000 or less. Such a
       provision will help ensure PPP dollars go to the smallest businesses in the greatest need
       of relief.

   ●   Clarify Sole Proprietors’ Access to the PPP​ – We applaud the recognition of sole
       proprietors and independent contractors in coronavirus recovery. As you develop the


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       next round of legislation, we urge you to amend the PPP so these solo entrepreneurs
       can more easily access its loans. While the Department of Treasury recently issued
       revised guidance for borrowers that sought to answer some of these questions,
       Congress can bring further clarity and certainty to the marketplace by explicitly
       authorizing the PPP to provide forgivable loans to businesses without employees and
       mandating that banks accept a wide variety of documentation from these applicants,
       including but not limited to, net or gross earnings and revenue statements issued by
       organizations like ours, bank statements, 1099s, and Schedule C and Schedule E tax
       forms.

   ●   Build Additional Flexibility into the PPP​ – As you know, the Administration has
       interpreted the CARES Act to require 75 percent of a PPP loan be used on payroll costs
       in order to be forgiven. That regulation limits the utility of PPP resources for the self
       employed, sole proprietors and small businesses that use our platforms. We urge you to
       require the SBA to allow small businesses that are closed or have very few customers
       compared to 2019 to use PPP loan proceeds on payroll, rent, utilities or debt obligations
       regardless of the percentage. We further urge you to require the SBA to allow full loan
       forgiveness on any PPP amount used to cover payroll and non-payroll expenses.

   ●   Reform Economic Injury Disaster Loans (EIDL)​ – The self employed, sole proprietors,
       and small businesses that use our platforms appreciate the reforms to the EIDL program
       included in the CARES Act. We ask that you further update that program in the next
       round of relief legislation by (1) permitting businesses to access a second EIDL loan
       during the crisis, given its length and impact; and (2) removing EIDL’s current personal
       guarantee and collateral requirements so that funds awarded by the SBA can be more
       easily accessed.

Additional Small Business Support

Adoption of the above recommendations will improve the efficacy of the PPP for many of the
self employed, sole proprietors, and small businesses that use our platforms. But more needs to
be done to ensure these businesses can maintain payroll, hire new employees, and safely
reopen once their communities determine that is appropriate.

   ●   Provide Targeted Support for Small Businesses​ – Despite the scope of federal economic
       relief thus far, we are concerned there are still businesses unable to access the support
       provided by the PPP, the EIDL, and the Main Street loan facility. In light of the
       challenges our users continue to face, we urge Congress to create an additional funding
       mechanism, specifically to provide relief to the self-employed, sole proprietors, and small
       businesses (including certain charitable organizations) that were unable to obtain federal
       relief thus far or that have exhausted other forms of aid authorized in the CARES Act. By
       limiting access to this subset of small businesses, an additional funding resource will
       ensure wages can be paid to furloughed or laid off employees/operators of the sole
       proprietors and small businesses that use our platforms.

       The fund could support grants for qualifying small businesses in an amount equal to 30
       percent of the businesses’ 2019 gross receipts, up to a maximum grant amount of


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       $75,000. The program could also serve employers who suffered a month-over-month
       drop in revenues of at least 20 percent, supporting grants to cover a portion of payroll
       and benefits for at least the next six months, plus a percentage of their fixed operating
       costs like rent, utilities, insurance policies, and maintenance.

   ●   Further Defer Federal Tax Payments​ – We welcomed the Internal Revenue
       Commission’s decision to administratively defer tax payments previously due April 15 to
       July 15. We urge you to mandate the deferral be extended to January 15, 2021. We
       further request the self employed, sole proprietors, and small businesses that receive
       loan forgiveness under the PPP be permitted to defer payroll taxes owed in 2020 to the
       next two years.

Thank you for considering our views, and for continuing to provide our communities of users
with the resources and leadership needed to strengthen our economies and safeguard the
public’s health.

Sincerely,

Airbnb
Etsy, Inc.
Eventbrite
Thumbtack
Upwork


CC:    The Honorable Marco Rubio, Chairman, U.S. Senate Committee on Small Business and
       Entrepreneurship
       The Honorable Ben Cardin, Ranking Member, U.S. Senate Committee on Small
       Business and Entrepreneurship
       The Honorable Nydia Velazquez, Chairwoman, U.S. House Committee on Small
       Business
       The Honorable Steve Chabot, Ranking Member, U.S. House Committee on Small
       Business
       The Honorable Mike Crapo, Chairman, U.S. Senate Committee on Banking, Housing,
       and Urban Affairs
       The Honorable Sherrod Brown, Ranking Member, U.S. Senate Committee on Banking,
       Housing, and Urban Affairs
       The Honorable Maxine Waters, Chairwoman, U.S. House Committee on Financial
       Services
       The Honorable Patrick McHenry, Ranking Member, U.S. House Committee on Financial
       Services




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