Update: March 27, 2020, 4:05 p.m. CT: President signs $2 trillion stimulus bill into law.
Update: March 27, 2020, 1:25 p.m. CT: The House passed the $2 trillion stimulus bill, sending it on to President Trump for enactment.
From the March 26, 2020, issue of the Memorial Business Journal
By a 96-0 vote, the U.S. Senate has approved a $2 trillion economic relief package in response to the COVID-19 pandemic to provide emergency assistance to workers, families, small businesses and distressed industries.
The House will take up the measure on Friday in a voice vote to protect members from exposure, according to House Majority Leader Steny Hoyer (D-Maryland).
Key points concerning small businesses include:
- A strong “paycheck protection” program means small businesses have an incentive to keep employees on the payroll.
- The bill offers extensive debt relief.
- The Small Business Administration is required to enact these programs with regulations no later than 15 days after the act is signed into law.
Forgiveness for Small-Business Loans to Keep Employees
The bill creates a “paycheck protection program” for small employers, self-employed individuals and “gig economy” workers, with $350 billion to help prevent workers from losing their jobs and small businesses from going under due to economic losses caused by the pandemic. The paycheck protection program would provide eight weeks of cashflow assistance through 100% federally guaranteed loans to small employers that maintain their payroll during this emergency.
If the employer maintains payroll, the portion of the loans used for covering payroll costs, interest on mortgage obligations, rent and utilities would be forgiven, which would help workers remain employed and affected small businesses and our economy to recover quickly from the crisis. This proposal would be retroactive to February 15, 2020, to help bring workers who may have already been laid off back onto payrolls.
Small-Business Contractors Also Get Protection
Federal agencies would be required to extend contract performance periods and promptly pay small-business contractors impacted by COVID-19.
For six months, the Small Business Administration is required to pay all principal, interest and fees on all existing SBA loan products, including 7(a), Community Advantage, 504 and Microloan programs.
The bill requires that the SBA enact these programs with regulations no later than 15 days after the act is signed into law.
Providing more cash flow to businesses and incentives to keep employees on payroll is a much-needed life support program for the economy.
- Click here to learn more about the Senate CARES bill tax provisions.
- Click here to learn more on the Senate CARES bill’s unemployment provisions.
- Click here to learn more on the Senate CARES bill’s provisions for distressed industries.