Home / US / Small business finance: what does the new aid package include?

Small business finance: what does the new aid package include?

The package was approved by the Senate on Tuesday evening and will then go to the house for a vote. President Donald Trump has offered public support and has indicated that he will sign it.
The initial $ 349 billion earmarked for small business paycheck loan loans was lost in less than two weeks due to overwhelming demand – and was criticized for restaurant chains having access to the funds. Some say it would have ended earlier if there had not been so many technical problems with the Small Business Administration loan processing system.

Legislators have now agreed to add another $ 310 billion to the fund. How quickly this second tranche of money would be available is not yet clear. Once the bill is incorporated into the law, it would likely take another day for the SBA to reopen the program, according to a banking industry source.

Also not clear: how long does it take until the additional money is used up? There is a large backlog of ongoing applications from companies that have already applied. The expectation is that it could be exhausted in less than 1
0 days.

$ 60 billion for small lenders and community banks

The new deal provides $ 30 billion in additional funds from the Paycheck Protection Program for loans granted by federal insured lenders with assets between $ 10 and $ 50 billion. And it would reserve another $ 30 billion for loans from community financial institutions, as well as small federally insured banks and credit unions with assets of less than $ 10 billion.

$ 10 billion in grants for disaster damage from economic injuries

The deal would add $ 10 billion in disaster recovery grants. As with the Pay Check Protection Loans, the initial funding for these grants was quickly running out.

The promise had been that small business owners could essentially get up to $ 10,000 within three days of applying directly from the SBA website.

The money for the Economic Injury Disaster Loan does not have to be repaid if it is used to maintain payroll, cover sick leave, and service other debts. However, if a small business owner receives both a grant and a forgivable paycheck protection program loan, the latter’s loan is reduced by the amount of the grant.

But almost every small business owner that CNN Business has spoken to in the past few weeks said he applied for a catastrophe loan early, but many haven’t received any money from it, and in some cases haven’t even received confirmation that their applications have been received.

Hospitals get more money

Hospitals and healthcare providers would receive an additional $ 75 billion to reimburse them for corona viruses, such as buying additional personal protective equipment and expanding the number of beds.

It would also compensate hospitals and lost revenue providers, mainly by suspending election operations and procedures. This has hit hospitals financially very hard, forcing some to go on vacation or cut staff wages and hours.
The third stimulus package, adopted in late March, created a $ 100 billion fund for this purpose – what hospitals called a “good first step”, meaning that more will be needed in a future bill.
The initial allocation of $ 30 billion from this fund annoyed some hospitals because they were distributed based on Medicare payments rather than the number of coronavirus patients.

More money to test

The bill would provide an additional $ 25 billion to expand coronavirus testing capacity, which many states and public health experts in the U.S. are still missing.

States, localities, territories, and tribes would receive $ 11 billion to develop, buy, manage, and analyze tests, increase laboratory capacity, perform contract tracking, and support testing by employers.

Trump and the governors have been arguing over the adequacy and responsibility of testing in recent days. The president claims that the federal government cannot be responsible for testing in local communities. Governors, on the other hand, say they lack the supplies to run the tests.

The bill requires states, localities, territories, and tribes to submit plans for how to use the resources to test and simplify the corona virus community containment guidelines.

The package would also send $ 1 billion to disease control and prevention centers for surveillance, laboratory capacity expansion, contract tracking and other needs, and $ 1.8 billion to the National Institutes of Health for testing to develop, improve and implement. An additional $ 1 billion would go to the Biomedical Advanced Research and Development Authority for coronavirus testing and accessories.

In addition, legislation would provide up to $ 1 billion to cover testing costs for the uninsured, and $ 825 million for community health centers and rural health clinics that often need to treat uninsured people.

The Trump administration, refusing to reopen the Affordable Care Act to uninsured people, said instead that the federal government would cover the cost of hospitals for testing and treating the uninsured through a separate $ 100 billion fund . This fourth package added another $ 75 billion to this money pool.

What is missing: aid for state and local governments or for recipients of food stamps

The spokeswoman for the House of Representatives, Nancy Pelosi, and the chair of the Senate Minority, Chuck Schumer, did not get everything they wanted in the fourth aid package. Two things have been left out.

Democratic lawmakers wanted to allocate an additional $ 150 billion to state and local governments, which are also experiencing huge revenue and public health expenditures. Some have already started to take leave of absence and have warned of major budget cuts. The third aid package, adopted at the end of March, established a $ 150 billion fund for state and local governments to cover the cost of combating the coronavirus outbreak.

Democrats also pushed for a 15% increase in the maximum benefit for food stamp recipients. While previous aid packages provided additional funds for federal food aid, they did not raise the upper limit for the monthly amount that the roughly 37 million participants in the country’s food stamps receive. The number of food brands is expected to increase as millions of Americans lose their jobs when companies close their doors to slow the spread of the corona virus.

Source link