Despite not in the United States for very long, the coronavirus (or COVID-19) has had a massive impact. Schools and businesses have closed, many states and cities have issued shelter-in-place orders, and citizens are wary by what the near future holds. Fortunately, Congress has stepped up to battle the economic fallout from the coronavirus with a $2 trillion stimulus package — the largest ever. The main focus thus far surrounds payouts to taxpaying citizens, but what about smaller businesses? Thankfully, this stimulus package, known as the CARES Act, also provides relief for small business owners, too.
Most notably, the program sets aside $350 billion for small company loans. The Paycheck Protection Program will give you loans which are backed by the Small Business Administration. Under this program, smaller businesses and nonprofits may receive as much as $10 million to cover payroll, utilities, mortgage interest, and rent. The amount that the borrowing business qualifies for is dependant on its payroll from January 1 to February 29. When the borrower uses the funds for that aforementioned expenses and maintains how big its full-time workforce, the principal from the loan will be forgiven.
These SBA-guaranteed loans will be available through banks and other traditional lenders and will have a maximum interest rate of 4%. To qualify as a small business, applicants should have 500 or fewer employees. While SBA loans normally have lengthy application processes, the Paycheck Protection Program will expedite the procedure to ensure that businesses can have faster use of funds.
The Paycheck Protection Program isn’t the only relief provided to small businesses. The stimulus bundle also provides companies with tax relief to help further ease the responsibility brought on by the pandemic. Businesses can take advantage of a 50% refundable payroll tax credit, which not just helps small businesses but additionally keeps more workers employed. Employer Social Security payroll taxes will be delayed, and net operating loss-reduction rules is going to be less stringent.
Finally, the stimulus bill sets aside $425 billion for that credit facilities from the Federal Reserve. Part of these funds will be open to small businesses, giving owners more funding opportunities to recover and obtain their businesses back on track.
Experts reason that more relief might be provided for small businesses, sole proprietors, and the self-employed. Whether or not additional aid will be obtainable in the future is currently unknown. However, the stimulus package because it stands offers much-needed funding opportunities for businesses that happen to be — or is going to be — hit hard by the coronavirus.
In addition to the SBA loans outlined within the stimulus bill, the SBA can also be offering additional help to smaller businesses with its disaster relief loans. It’s an alternative choice to consider when the coronavirus has impacted your company.
Whether you’re a worker or an employer, everyone around the world is feeling the results of the coronavirus pandemic. It’s simple to get wrapped up in panic or fear about what’s currently happening and what’s nearby. Here at , we’re offering our support through our coronavirus hub. There, you can find the most recent here is how to weather the COVID-19 storm as a business proprietor. We offer tips, advice, and resources to help you keep your business on the right track. Problems in later life the significance of smaller businesses, and we want to provide continued help and support when you need it probably the most.
