Washington's Small Businesses to Have Access to $377 Billion, Nationwide Relief Package
Many Washington employers will have access to a $377 billion loan and grant package that the Senate has allocated for America's struggling small businesses, an analysis shows.
The $377 billion is part of a much larger and historic federal stimulus package. The $2 trillion measure passed the Senate on a 96-0 vote late Wednesday. The Coronavirus Aid, Relief and Economic Security (CARES) Act is expected to pass the House easily on Friday. Observers also stress that many details are still emerging about the bill, and could change on the way to final adoption.
Several highlights have emerged about the compromise bill that cleared the Senate, however, including creation of the Paycheck Protection Program. This program would allow certain employers to qualify for forgivable Small Business Administration loans, according to an analysis by K&L Gates, a public affairs and legal firm.
Eligible borrowers would include employers, nonprofits and others that employ no more than 500 employees. Independent contractors, sole proprietors, self-employed people and certain businesses in the hotel and food services sector would also be eligible.
The bill also eases access to Emergency Economic Injury Disaster Loan Grants, which could provide advanced payments to help small businesses pay rent, payroll and other expenses.
Notably, the bill would require the SBA to pay the principal, interest and fees for six months on certain existing loans.
"Our small businesses have been hit hard," U.S. Sen. Maria Cantwell, D-Wash., said in a news release. "We want to try to lessen the economic impacts of shelter-in-place or social distancing."
Other business provisions include payroll tax deferrals, employee retention tax credits and tax law changes aimed at reducing the cost of borrowing money.
The package also sends direct payments to many Americans. Married couples filing their taxes jointly could receive as much as $2,400, plus $500 for each child.
“I’ve heard from so many business owners across Washington state who are struggling right now, so while it’s not the bill I would have written by myself, I’m glad we were able to take some necessary steps in this stimulus to provide critical federal grants, loans and other support to help keep businesses afloat during these painful times," U.S. Sen. Patty Murray, D-Wash., said in a news release.
The measure also eases access to retirement funds by removing the 10% penalty on early withdrawals, and defers payments and interest on federal student loans.
Unemployment benefits were also greatly expanded in the bill. This includes an extension of 13 weeks beyond what states provide; $600 weekly payments on top of state benefits; and expanding eligibility to include people who are self-employed, independent contractors, gig-workers and others that are limited due to COVID-19.
The measure also includes $500 billion in loans, loan guarantees and other investments for eligible businesses, states and municipalities. This includes $25 billion for passenger airlines.
Federal support for public transit, airport improvement, Amtrak, airport security, the Coast Guard and other transportation needs is included.
And finally, the bill includes billions to support hospitals, the Department of Homeland Security's Disaster Relief Fund, education, defense and a Strategic National Stockpile of medical supplies, among other priorities.
The CARES Act is a lot to unpack even for the most seasoned federal policymaker. That's why AWB is hosting a Monday webinar to analyze what's in the bill, especially for small businesses.
This free webinar is scheduled for Monday at 10 a.m. AWB members and all Washington employers are welcome. Guests include U.S. Rep. Derek Kilmer, D-Wash.; Mary Burke Baker of K&L Gates; Jack Heath, president of Washington Trust Bank; and others.