Federal Stimulus Bill Includes Assistance for Small Businesses - Forgivable Loans Among New Benefits
Mar 25, 2020
Early this morning, U.S. Senators and the Trump Administration announced they have reached an agreement on a $2 trillion stimulus package that includes direct assistance to small businesses effected by the coronavirus pandemic. Although the full text of the bill is not yet known as of this writing, Senate Majority Leader Mitch McConnell (R-KY) said he expected the Senate to pass the legislation later Wednesday afternoon. The House is expected to also pass it and send it to President Trump to sign into law within days.
The bill includes more than $350 billion to help small businesses impacted by the coronavirus pandemic make payroll and cover expenses. Because the federal definition of small business includes companies with 500 employees or less, this bill can help the vast majority of Economic Alliance member companies.
Four other provisions of the deal address families and workers, distressed industries and additional support for health care to compact the virus.
Working directly with Senator Grassley and Senator Ernst’s staff and other Congressional sources, here’s what we know right now:
Small Business Relief
- Provides $367 billion to establish lending programs for small businesses who keep their payrolls steady through the crisis. If employers maintain their payroll, the loans would be forgiven, and can also cover other costs associated with keeping a business open. Federally guaranteed loans will provide eight weeks of assistance for qualifying employers who maintain payroll.
- Expands existing government program loans to permit payroll support, including paid sick leave, supply chain disruptions, employee salaries, mortgage payments, and other debt obligations to provide immediate access to capital for small businesses who have been impacted by the virus.
- Provides additional grants to business development centers for counseling, training and related services for small business owners impacted by the virus.
- If you applied for an SBA disaster loan between February 15 and March 31, you are still eligible for the new SBA loan included in this new federal law.
The Economic Alliance will continue working with our federal delegation for additional details, how the loans will work for your business and when and how you can apply. Those details are still being finalized, and we’ll send you an update as soon as it’s available.
Tax Relief for Families and Workers
- Under the plan, people making up to $75,000 a year are expected to receive checks for $1,200. Couples making up to $150,000 would receive $2,400, with an additional $500 per child. The new agreement removed the phased-in provision that would have excluded lower-income Americans from receiving the full benefit.
- Payments would decrease for those making more than $75,000, with an income cap of $99,000 per individual or $198,000 for couples.
Unemployment Relief for Workers, including Relief for Self-employed Workers & Independent Contractors
- Unemployment insurance would also be significantly bolstered to increase payments and extend the benefit to those who typically do not qualify, such as gig economy workers, furloughed employees and freelancers.
- Expansion of unemployment benefits that would extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits that would allow workers to maintain their full salaries.
Emergency Relief for Distressed Businesses, State and Municipalities
- $500 billion in loans for distressed corporations - $425 billion for the Federal Reserve to leverage for loans in order to help broad groups of distressed companies and $75 billion for industry-specific loans with oversight.
- $150 billion for state and local stimulus funds.
Additional Investments for Health Care Providers & Expands Access to Care
- Invest $150 billion in the health care system to respond to the quickly expanding number of infections across the country.
When passed, this will be the third legislative package approved by Congress and the President to address the pandemic. The first bill provided $8.3 billion in emergency aid and the second package providing paid leave, free testing and some paid leave and unemployment benefits for workers.