Today the House passed the $2 trillion stimulus package, also known as the CARES Act, and President Trump signed it into law this afternoon. Here are some key points of the package that will help Oregon’s business community.
The most important aspect of the package is the new “Paycheck Protection Program” for small business (with fewer than 500 employees), which provides:
- Loans available for up to $10 million. The first eight weeks of payroll, rent and utilities will be forgiven, if personnel is maintained and salaries not reduced by more than 25%. Loans will be provided based on a business’ average monthly payroll multiplied by 2.5.
- Employers are also eligible for a dollar-for-dollar credit amounting to $200 per day sick leave and $511 per day for new emergency family and medical leave.
The Small Business Administration (SBA) still has $18 billion to use on their standard flagship small business loan program. They are adding capacity to process loan applications and expect to help more than 30 million small businesses through this crisis.
Every state has now declared a disaster, which means every business nationwide with 500 or fewer employees is able to apply for the SBA’s economic injury disaster loan program (EIDL).
Those loans include these benefits:
- Up to $2 million per business to help with fixed debts, payroll, accounts payable
- The first $10,000 can be sent in advance, and will not be required to be repaid as long as it is used to keep employees on the payroll. Even if a loan is later denied., the $10,000 will not be required to be repaid.
- The first payment will be deferred for one year.
Includes expanded eligibility:
- Still available even if businesses “have credit available elsewhere” which would typically disqualify them.
- The SBA is not using real estate as collateral.
- The SBA is not requiring first year tax returns before approving loan apps (but will get that info from the IRS down the line).
Extended to 501(c)6 organizations, faith-based organizations, independent contractors and sole proprietors. Their employee counts are determined by location.