Passage of $2 Trillion Stimulus Package Will Help Wide Variety of Businesses and Workers
Tuesday, April 07, 2020
Small businesses are a bedrock of American life, employing friends, neighbors, and nearly half of California’s workforce. They aren’t just companies, they are cornerstones of our communities. And with the significant public health and economic effects of the coronavirus pandemic, California’s four million small businesses are being forced to make difficult decisions about how to keep their businesses afloat, their staff employed, and their rents or mortgages covered.
As communities work to combat this public health threat together, it’s more evident than ever that the viability of small businesses is critical to America’s families.
Last week, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act providing $2 trillion to support the U.S. health care system, state and local governments, workers, and businesses to overcome the health and economic fallout of the coronavirus pandemic.
Specifically, for small businesses, it created the $349 billion Paycheck Protection Program.
The Paycheck Protection Program allows small business owners and qualified 501(c)(3) nonprofit organizations (having up to 500 employees or less) to access loans in the amount of 2.5 times average monthly payroll (and up to a maximum of $10 million) to be used for payroll continuity, rent, and utilities assistance. If a business or nonprofit uses the loan to cover allowable payroll, rent, and utilities expenses during the 8-week period that is covered by Paycheck Protection Program, their loan will be forgiven.
Responsive to an economy and workforce on the edge, the intent of the Paycheck Protection Program is to help small businesses and 501(c)3 nonprofits to retain their employees, so that they are able to pick back up where they left off, with government relief.
Also eligible for the program are independent contractors, gig economy workers, and other self-employed individuals.
Most importantly, this program will run through local banks, not government bureaucracy. The Treasury Department recently-released guidance provides further information on how this program will work.
In addition to the Paycheck Protection Act that the CARES Act created, small businesses can also receive relief via Economic Injury Disaster Loan (EIDL) program, up to a maximum of $2 million. Both the Paycheck Protection Program and the EIDL program loans can be found on the Small Business Administration’s (SBA) website.
California is the most culturally diverse state and is home to 1.5 million female-owned and 1.6 million minority-owned businesses. In order to ensure everyone is supported, the CARES Act provided $240 million in grants to SBA partners and $10 million in funding to the Minority Business Development Agency to ensure that companies of all types across the country can continue to succeed.
Though this pandemic has had far-reaching implications across all industries, Americans should feel reassured knowing that their government is working to address this unprecedented challenge and provide the resources they need to not only get through this uncertain time, but thrive on the other side of it.
Category: Economic News, COVID-19, Business News