Howard Schultz Says 13.5M Small Businesses Could Close

Former Starbucks Corporation SBUX CEO and current Chairman Emeritus Howard Schultz is leading an initiative to lobby the federal government to create a new long-term recovery plan for small businesses.

The Letter: Schultz penned a letter to congressional leaders on both sides of the political aisle. He got more than 100 business leaders to sign the letter that calls for the creation of federally guaranteed loans through 2021 and the freedom for business owners to decide how to disperse the funds, and partial forgiveness for companies impacted the most.

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'Five-Alarm Emergency: Since February, more than 3 million small businesses have been forced to closed and this figure could soar to 10.5 million to 13.5 million by Labor Day, Schultz said on CNBC. This would have a "significant, catastrophic" impact on the economy.

"It is no longer a crisis; it is a five-alarm emergency," he said.

Small Business Relief: The government needs a new stimulus measure that directly addresses small business relief, Schultz said. The letter suggests a timeline of financial support through 2021, but it shouldn't be considered to be a "bottomless handout."

Instead, the government can create a low-interest loan backed by the government that will be paid back over time, he said. A rough estimate for the size of the program is around $1 trillion. The economic shortfall of not acting would be "much greater."

"The ripple effect on this is not just the businesses itself, it's also the social fabric of every community," he said.