A record-setting $2.2 trillion stimulus package, signed Friday afternoon by President Trump, was the focus of a business webinar meeting hosted by the Tacoma-Pierce County Chamber in partnership with the Economic Development Board for Tacoma-Pierce County.
Core presenters on the call included Congressman Denny Heck and Neil Bradley, executive vice president and chief policy officer for the U.S. Chamber of Commerce. Both spoke about the bill: who it will help, how it will work, and what we can expect from it moving forward.
“The CARES Act, which stands for Corona Aid Relief and Economic Security, happened at almost lightning speed,” Heck said in the webinar. “To put things in perspective concerning this $2.2 trillion bill, the bank bailout bill of the Great Recession and the stimulus bill that followed several months later combined were less than $1.5 trillion.”
The speed at which it passed is vital, Heck said, considering the rapidity with which COVID-19 has sickened people and destabilized the economy. “We need to be as efficient as possible and we need to shock the economic system to keep this from getting worse than it’s otherwise going to,” he said.
Top priorities covered in the bill include healthcare, unemployment, and small businesses. Some $100 billion in aid will be sent to hospitals, as well as $16 billion to bolster medical supplies that have become scarce. Unemployment benefits have been increased, and most American adults can expect $1,200 in relief funds, plus $500 for each dependent child.
As for small businesses, Heck emphasized their importance and said he does not believe the government properly stepped in to help them during the Great Recession. “This bill seeks to do that,” he said, referring to the $350 billion available in loan-forgiveness funds.
Bradley helped unpack some of the ins and outs of what this means for small businesses across the country.
“Who is eligible for this $350 billions loan grant program? Generally, small businesses who are otherwise eligible for an SBA loan are eligible for this loan/grant,” Bradley said. “But it goes beyond that. If you are a sole proprietor, if you’re self-employed, if you’re an independent contractor, you can apply for this grant. 501c3 nonprofits can apply for this grant, too.”
Businesses can borrow up to two and a half months’ worth of average payroll expenses, not exceeding $10 million. The money they receive is designed to encourage them to keep employees on payroll and to continue paying rent.
“If, for the eight weeks following the origination of the loan, you’re using the proceeds to pay your employees, your utilities, your rent, the interest on the mortgage associated with your business, every dollar you spend on that is eligible to be forgiven off of your loan,” Bradley said.
“If businesses have reduced headcount, they lose out proportionately on some of that loan forgiveness, as they also do if they have reduced pay by more than 25 percent for employees making less than $100,000,” Bradley explained.
“We know a lot of businesses have already had to lay off employees,” he said. “This is designed to encourage you to bring them back on the payroll — it works out in your favor.”
For mid-size and larger employers that don’t fall into the small business category, Bradley recommended thinking about “how you interface with your normal lender and how they might have greater abilities to support you during this period.”
The program is designed to be quick to roll out and easy to apply to. More information should be available shortly, Bradley said, emphasizing that for businesses of all sizes, there should be more clarity on a step-by-step process within the next week.
Thumbnail photo by Sharon McCutcheon on Unsplash