Late Wednesday, March 25, 2020, the Senate approved a massive package designed to cushion the impact of the COVID-19 outbreak on Americans. The House plans to vote on the measure this Friday, and it is expected to pass. You can read the text of the bill here.
The $2-trillion bill would provide $1,200 direct payments to adults making up to $75,000 a year, offer $350 billion in small business loans, and create a $500-billion loan fund for states, cities, and various industries.
Small businesses across Florida have been hit hard and, in many cases, forced to shutter to comply with social-distancing and shelter-in-place orders for state and local officials. At Thrive Law, we’ve been in constant touch with many of you and know intimately your need for relief.
While many of the logistical details have not been worked out, under the stimulus package, the Small Business Administration will oversee the Paycheck Protection Program, which will distribute $350 billion to small businesses with 500 or fewer employees. These loans can be partially forgiven if debtor companies meet certain requirements. To be entitled to partial forgiveness, the small business must demonstrate that it is using the funds for employee payroll, rent, mortgage interest, and utilities. including retaining employees during the crisis.
If the business uses the loan funds for these purposes AND maintains the average size of its workforce, calculated at the time it receives the loan, the principal will be forgiven, and the company need only pay back the accrued interest.
Depending on how much a business paid its employees between January 1, and February 29 of this year, businesses can receive loans of up to $10 million at interest rates of up to 4%. The bill provides for expedited loan originations, and banks and other private lenders will administer them, which may speed up the process of getting the money to businesses who need them now.
The Thrive Law team is keeping up with emerging solutions for small businesses and doing our best to provide you with the latest information. We’ll keep providing you with more details about the coronavirus-aid bill and keep you posted on any changes when the House votes on Friday.
As a fellow small business, Thrive Law is in the boat with you. If you need guidance about COVID-19-related business and employment matters, call us: 1 (727) 300-1990 or email email@example.com. We’re here to help and sending you good thoughts.