Everything You Need to Know About CARES Act II
Late last week, Washington passed its fourth stimulus bill since the outbreak of the COVID-19 pandemic less than two months ago. This $483.4 billion legislation is meant to serve as a bridge between the CARES Act- issued just a few weeks ago- and a larger, yet to be drafted bill currently being negotiated between Democrats and Republicans. Though it is only intended to serve as a stop gap until a more comprehensive aid package can be agreed upon, there remain a number of important points you should be made aware of.
Paycheck Protection Program (PPP) Amongst small businesses, this program proved incredibly popular. Unfortunately, demand far outstripped supply and the funding provided by the CARES Act was quickly depleted. Adding to the frustration was a sense that larger banks- such as Citizens or Wells Fargo- had prioritized applications from established, more financially savvy clients.
To address this, the new bill allocated an additional $321 billion towards the program, with $60 billion set aside for smaller lenders. This allocation will be split between two categories, with half allocated to banks with less than $10 billion in assets and the remainder to institutions with between $10 billion and $50 billion in assets. It is hoped that by targeting regional or local lenders, a greater share of these funds would be directed to small or otherwise disadvantaged borrowers. Banks began accepting new PPP applications on Monday, April 27th, with funding anticipated to last roughly two weeks. To learn more about this program, visit the SBA’s website. You can also find a list of locally participating banks by clicking here.
Economic Injury Disaster Loan Program (EIDL) Another highly popular program which quickly ran out of funding was the EIDL. These flexible, low interest loans could be coupled with forgivable advances of up to $10,000 depending upon the number of individuals a business employed. Unfortunately, in its initial iteration, this program was unavailable to farmers and ranchers with less than 500 employees.
Last week’s legislation amends this, enabling a vital program to assist critical agricultural businesses across the nation. It also refinances the program, infusing it with $50 billion in new lending capital and an additional $10 billion for the aforementioned advances. As with the PPP funding however, these resources are only expected to last for a limited time. According to its website, the SBA intends to review existing requests for assistance from the previous round of funding before opening the program up to new applications. Once the application portal is reopened, the Chamber will act to alert you. Interested businesses can learn more by visiting the SBA’s EIDL page here.
Testing and Other Priorities Beyond these assistance programs, Congress and the White House allocated funding to address the public health crisis directly. The new bill commits $75 billion to assist the nation’s hospitals and healthcare providers cope with this pandemic, and provides an additional $25 billion to maintain and expand testing efforts. This last allocation will prove particularly important as the nation and the Commonwealth work to reopen.
In a conversation with the Chamber the day President Trump signed this act into law, Congresswoman Trahan and House Rules Chairman McGovern repeatedly emphasized the importance of testing to responsibly bringing the quarantine to an end. As businesses reopen and people resume their normal routines, the ability to identify new coronavirus cases and contact those who may have come into contact with them will be crucial to guarding against a resurgent epidemic or “second wave”. This legislation divides that responsibility between state and federal authorities.
Of the $25 billion, $11 billion is to be distributed amongst the states and indigenous peoples. Two billion dollars of this will be issued relative to the Health Emergency Preparation Grant Formula with another $4.25 billion distributed relative to the number of cases within a given area. The remaining $14 billion will be overseen by the federal government. This includes allocations for contract tracing, test production, expansion of lab capacity, and $1 billion for testing uninsured individuals. Significantly, it specifically allocates $825 million towards community health centers and clinics in rural areas.
As events continue to take shape, the Chamber’s staff will remain on hand to provide assistance and keep you informed of the latest developments. You can find additional resources by visiting the Chamber’s website at www.northcentralmass.com/coronavirus. If you have questions or concerns about this legislation- or other government efforts to address this crisis- please contact Christopher McDermott, Public Affairs Manager, at cmcdermott@northcentralmass.com or (978) 353-7600 ext. 224. Now- more than ever- we want to hear from you!
