Trump Signs Coronavirus Relief Bill with $310 Billion More for Small Businesses

 

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U.S. Capitol

President Donald Trump signed into law another coronavirus relief package, which adds $310 billion to replenish the Paycheck Protection Program (PPP) for small businesses. The Small Business Administration (SBA) will start accepting loan applications again on April 27.

"The PPP has supported more than 1.66 million small businesses and protected over 30 million jobs for hardworking Americans," said Treasury Secretary Steven Mnuchin and SBA Administrator Jovita Carranza in a joint statement. "With the additional funds appropriated by Congress, tens of millions of additional workers will benefit from this critical relief."

Mnuchin and Carranza encouraged lenders to process loan applications that were already submitted by eligible borrowers and quickly distribute funds. "All eligible borrowers who need these funds should work with an approved lender to apply," they said. 

As part of the prior $2.2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, the PPP had allocated nearly $350 billion to help small businesses keep workers on payroll during the pandemic. However, the fund reached its cap less than two weeks after the program launched. The new measure will give more businesses access to funds.

The Society for Human Resource Management (SHRM) had urged Congress to make additional funds available to assist more employees and employers, including nonprofits. "Absent congressional action, small businesses and nonprofits will be forced to discontinue their services and reduce or eliminate employment," SHRM leaders wrote in a letter to Congress. "The Paycheck Protection Program is vital to help small employers cover payroll costs, mortgage and rent payments and health-care benefits for employees."

The bill had stalled as Democrat and Republican lawmakers negotiated the details, but they ultimately reached an agreement. "The legislation … includes crucial improvements to the Paycheck Protection Program which ensure more small businesses are able to access the resources they need," said House Speaker Nancy Pelosi, D-Calif., on Twitter.

"We put $310 billion in to replenish the program for small businesses which ran out of money 12 days ago," said Sen. Mitch McConnell, R-Ky. "We also added $75 billion for hospitals we know that are struggling. And probably even more important than that, $25 billion for testing."

We've rounded up articles and resources from SHRM Online and other trusted media outlets on the news.

SHRM Resource Spotlight
Coronavirus and COVID-19

$484 Billion Relief Package

The new coronavirus relief bill allocates $484 billion in total funds. $310 billion will go to PPP loans, of which $60 billion will specifically go to small lenders. The bill also includes $75 billion for hospital grants and $25 billion for coronavirus testing. So far, Congress has allocated about $3 trillion to aid the economy and health care system during the coronavirus pandemic.

(CNBC)

SBA Issues Guidance on Small Business Loan Eligibility

The U.S. Small Business Administration (SBA), which is managing the PPP, issued guidance on April 23 to answer frequently asked questions. For instance, do businesses owned by large companies that have the means to support ongoing operations qualify for a PPP loan? The guidance says that "all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere … borrowers still must certify in good faith that their PPP loan request is necessary." 

(CNBC)

Paycheck Protection Program Details

Payroll-protection loans can be applied to expenses incurred in an eight-week period between Feb. 15 and June 30 and may be used for payroll costs, health care, rent, utilities and other business debts. Businesses are generally eligible if they employ fewer than 500 employees. However, businesses that employ 500 or more workers may participate if they meet the SBA's size standards for their industry. Independent contractors and self-employed people are also eligible, as well as independently owned franchises that are SBA-approved and employ less than 500 workers. The PPP is meant to encourage businesses to keep their workers employed or quickly rehire them, so the SBA will forgive loans if all employees remain on payroll for eight weeks (or workers are rehired by a certain date) and the money is used for covered expenses.

(SHRM Online)

CARES Act Key Employment Law Implications and FAQs

In addition to the PPP, the CARES Act provides direct financial assistance to Americans, expands unemployment benefits and offers eligible businesses tax credits. Here's a summary of the significant employment law provisions in the CARES Act and answers to frequently asked questions.

(SHRM Online)

What's Next?

Mnuchin has said that Congress must "spend what it takes" to help prevent a deep recession. "On the other hand, I think we are sensitive to the economic impacts of putting on debt, and that's something that the president is reviewing with us very carefully," Mnuchin noted.

The next stimulus package could include additional cash payments to individuals and aid for state and local governments. Some Republicans, however, are concerned about taking on more debt and prefer to help businesses cover employees' wages during the pandemic.

Some Democrats are pushing for more paid leave, claiming that Labor Department guidance too narrowly defined eligibility for emergency paid leave under the Families First Coronavirus Relief Act. Sen. Elizabeth Warren, D-Mass., and Rep. Ro Khanna, D-Calif., are also calling for mandatory hazard pay under an "essential workers' bill of rights." The measure would provide premium pay to frontline workers, such as health care employees and delivery drivers.

(Forbes) and (Politico)

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