Congress approved roughly $484 billion for Covid-19 Relief package which incorporates Paycheck Protection Program loans for little businesses. This happened after a series of discussions within the Senate house between Republicans and therefore the Democrats.
The bill was passed with consent and includes $310 billion for the Paycheck Protection Program. $60 Billion infused for little Business Administration disaster assistance loans and grants. It also covers $70 billion for hospitals handling a huge number of Covid positive patients and $25 billion to foster Coronavirus testing.
Senate legislator Mitch McConnell puts it on twitter as – “strengthens a number of the foremost important parts” of the $2 trillion rescue package passed last month, including the tiny business program “which is saving many American jobs as we speak.”
Paycheck Protection Program may be a loan that helps small businesses keep their workforce employed during the pandemic. it’s designed to incentivize the tiny businesses during this Coronavirus pandemic to stay their workforce on payroll. SBA forgives the loan if funds are used for retention of employees. The key highlights of the program are as under:
- PPP loans at just 1% interest.
- No collateral or personal guarantee is required.
- No fee is charged from small businesses by the lender or by the govt .
- Loan borrowers can apply for loan forgiveness else loan payments are going to be deferred up to 10 months after the top of the covered period of the loan.
- Loans issues before 5th June 2020 have a maturity of two years and loans passed after 5th June have a maturity of 5 years.
President Trump tweeted and requested the lawmakers-
“I urge the Senate and House to pass the Paycheck Protection Program and Health Care Enhancement Act with additional funding for PPP, Hospitals, and Testing. After I sign this Bill, we’ll begin discussions on subsequent Legislative Initiative with fiscal relief…to State/Local Governments for lost revenues from COVID 19, much needed Infrastructure Investments for Bridges, Tunnels, Broadband, Tax Incentives for Restaurants, Entertainment, Sports, and Payroll Tax Cuts to extend economic process “
For the agricultural and minority owned businesses, $60 billion is directed to small lenders and community based financial institutions. this may help small businesses to stay the workforce paid during this pandemic.
Buyers have the choice of loan forgiveness also to catch up on the eligible payroll costs, payments on business mortgage interest payments, rent or utilities within 8 to 24 weeks of the loan disbursement period. One can request loan forgiveness only after he has utilized the loan amount completely. Forgiveness are often asked for anytime up till the maturity of the loan.
Though the Americans welcomed this gesture, House Speaker Nancy Pelosi insisted that more funds should be injected for state and municipalities relief. She requested an equal amount from Congress for this purpose which is estimated to roughly $700 billion.
Not only this but Democrats are demanding that next bill should have a hazard relief package for the workers and money for the U.S. Postal Services which goes through a struggling phase currently. The president also said that he wants to place more funds for the relief of municipalities and therefore the state but denied more funds for revamping postal services of the U.S.
SBA Disaster Loan
SBA is providing low interest loans as relief for businesses and homeowners to cope up with the financial burden through Covid-19 pandemic.
If you are a little business owner, non-profit organization of any size within the us , or into a us agricultural business with 500 or less employees, you’ll apply for SBA Disaster Loan. this is applicable to all or any businesses of the U.S. and districts of Columbia.
Businesses of all sizes located in declared disaster areas, private non-profit organizations, homeowners, and renters suffering from declared disaster, that include civil unrest and natural disasters like hurricanes, flooding, wildfires, etc.
SBA disaster loan are often used for the subsequent purposes: –
- Working Capital
- Normal Operating expenses like health care benefits, rent, utilities etc.
- Losses not covered by insurance or Federal funding
- Business operating expenses that would have normally met if Covid-19 never happened.
There are various sorts of Disaster Loans like-
- Physical Damage Loan- Loans designed to hide physical damage thanks to a disaster.
- Mitigation Assistance- Funding to hide expenses of small businesses during or after disaster.
- Economic Injury Disaster Loans- Provides loans for loss due for damage occurred to home and private property.
- Military Reservist Loan- This loan is for those organizations who have employees who are on active duty leave.
Express Bridge Pilot program – It helps small businesses who currently have a account with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to beat financial loss.