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As more and more states implement shutter-in-place/stay-at-home orders to “flatten the curve,” restaurants and other small businesses are becoming more and more concerned: What does this mean for our business now and in the immediate future?
There are no answers—and might not be for quite some time.
However, the $2 billion Coronavirus Stimulus package the U.S. Senate approved late Wednesday March 25 and expected to be passed by the House and signed by President Trump includes provisions designed to help small businesses in several ways.
The following information is an excerpt from a March 26 MarketWatch report about the recently passed stimulus package. We will provide additional information as it becomes available.
What does the plan offer for American small businesses?
• A $350 billion forgivable loan program designed to ensure that small businesses do not lay off employees
• A 50% refundable payroll tax credit on worker wages will further incentivize businesses, including ones with fewer than 500 employees, to retain workers
• Looser net operating loss-reduction rules that will allow businesses to offset more
• A delay in employer-side payroll taxes for Social Security until 2021 and 2022
• Sole proprietors and other self-employed workers could be eligible for the expanded unemployment-insurance benefits the bill provides
• A portion of the $425 billion in funds appropriated for the Federal Reserve’s credit facilities will target small businesses
How does the $350 billion small-business loan program work?
The Small Business Administration, under the stimulus package, will oversee the Paycheck Protection Program, which will distribute $350 billion to small businesses that can be partially forgiven if the companies meet certain requirements. The loans will be available to companies with 500 or fewer employees.
Loans will be administered by banks and other lenders, which American Enterprise Institute resident scholar Stan Veuger said, “will hopefully speed up the process.”
Businesses can receive loans up to $10 million, based on how much the company paid its employees between Jan. 1 and Feb. 29. The loans will carry an interest rate up to 4%. The bill provides for an expedited origination process.
If the business uses the loan funds for the approved purposes and maintains the average size of its full-time workforce based on when it received the loan, the principal of the loan will be forgiven, meaning the company will only need to pay back the interest accrued.
You can read the full story, which includes links to more information about the stimulus package, at marketwatch.com/story/heres-what-the-historic-2-trillion-coronavirus-stimulus-package-will-do-to-help-small-businesses-2020-03-26.
You can also find information about coronavirus small business loans at sba.gov.