- $25 billion in loans and loan guarantees for passenger airlines,
- $4 billion for cargo air carriers,
- $3 billion for aviation contractors, and
- $17 billion for businesses critical maintaining national security.
After days of intense negotiations between Republicans and Democrats in Congress, the United States Senate and House passed a $2 trillion stimulus package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill passed both chambers with broad support, and President Trump signed the bill yesterday. Here is what is in the stimulus package that impacts you and your business:
Small Business Loans:
The bill includes a Paycheck Protection Program, a $349 billion lending program modeled on existing SBA 7(a) program but with 100% government guarantee. Small businesses are defined by the SBA, generally up to 500 employees but up to 1500 employees depending on the sector. Sole proprietors, self-employed, and independent contractors are also eligible. Loans are able to be forgiven in the amount equal to their payroll costs, interest payments on mortgages, rent payments and utility payments between February 15 and June 30, 2020. The SBA also received $17 billion to cover six months of payments for businesses with current SBA loans.
Revisions were also made to the SBA’s Economic Injury Disaster Loans (EIDLs). Loans can be made based solely on credit scores and loans below $200,000 can be approved without a personal guarantee. Loans are now available to all non-profits, including 501(c)(6s). Borrowers can receive $10,000 cash advances that are forgiven if used for paid leave, maintaining payroll increase cost due to supply chain disruption, mortgage or lease payments, or repaying obligations that cannot be met due to revenue losses.
Direct Payment to individuals:
Single Americans who make up to $75,000 will receive a direct payment of $1,200. The payments will decrease for individual whose adjusted gross income is above $75,000 but less than $99,000. Those making above $99,000 will not qualify at all.
Married couples who make up to $150,000 will receive a direct payment of $2,400. Families will also receive an additional $500 for every dependent child. The payments decrease for families making above $150,000 and below $198,000. Families making above $198,000 will not qualify at all.
The direct payment you and your family receive will be based on your federal income tax return filed in 2019 or in 2018. (If you have not filed your 2019 tax return, your 2018 returns will be used to determine your direct payment amount.) If you did not file your taxes in either of those years, your information will be taken from the Social Security Administration. You and your qualifying dependents must have a social security number in order to receive a direct payment. All payments will be sent using either electronic deposit or address information already on file with the IRS.
Increase in Unemployment Benefits:
The federal government will give jobless workers an extra $600 a week for four months. This additional $600 is on top of the state benefits an unemployed person can collect. The bill provides unemployment benefits for workers who typically do not qualify for traditional benefits. Independent contractors, self-employed, and gig economy workers are a few examples of workers who will now quality for traditional benefits. You are also eligible if you were going to begin a new job or new contract which was cancelled due to COVID-19. Lawmakers also included language for up to 13 weeks of extended benefits, which could be fully covered by the federal government.
Loans for Major Industries:
The bill includes $500 billion in loans for larger industries, including: