Business Impact of the CARES Act (Federal Stimulus Bill)

Small Business “Paycheck Protection Program”

• $349 billion with eligibility to:
  • small businesses <500 employees, up to 1500 based on industry & revenue
  • Accommodation & Food Services
  • 501 (c) 3 charitable organizations with <500 employees
  • Sole proprietors, self-employed, and independent contractors
• Regulatory Streamlining
  • flexibility in lending, requirements
• Loan forgiveness in proportion maintaining payroll

Changes to SBA’s Economic Injury Disaster Loans (EIDLs)

• Loans available to nonprofits including 501 (c) 6s
• Loans based on credit scores
• Allows for cash advances for payroll support, supply chain disruption, mortgage or lease payments, or repaying obligations

Loan Programs and Credit Facilities

• $500 billion in loans and loan subsidies for air carriers, national security companies, lending institutions

Business Tax Provisions

• Employee Retention Tax Credits
• Delay Payroll Taxes
  • defer payment of the employer share of the Social Security tax due between now and January 1, 2021 to December 31, 2021
    (50% due) and December 31, 2020 (remaining due)
• Modifications for net operating costs
• Accelerated AMT credits
• Modification of limitation on business interest
• Amendment to qualified improvement property
• Temporary exception from excise tax for alcohol used ot produce hand sanitizer

Pension and Employee Benefit Requirements

• Changes to deadlines, required minimum pension contributions, and benefit restrictions

Banking Relief, Mortgage, Forbearance, and Credit Reporting

• Relief from:
  • accounting standards
  • CECL standards
  • forebearance requests from borrowers

Payments & Relief for Individuals

• Direct payments to taxpayers earning less than $75k, $150k filing jointly

Unemployment Programs

• Extend unemployment insurance by 13 weeks and include a four-month enhancement of benefits
• Those normally not eligible – ex. may have exhausted benefits
• Sets criteria for demonstrating unemployment due to the virus
• No one week waiting period for unemployment

Work Sharing Programs

• States enacting or with short-term compensation programs can get 100% federal reimbursement
• Sets other criteria

Paid Leave Changes

• Changes Phase 2 Bill that was just enacted to FMLA coverages (see page 7 of US Chamber’s document)

Health Care Provisions

• Many components for health care providers and insurance

Student Loans

• Defers payments, principals and interest until September 30
• Suspends defaults, garnishments and reporting to credit agencies

State and Local Aid

Provides $150 billion to states and local government based on each state’s population for the purpose of funding unforeseen expenses related to COVID-19.

Appropriations

$340 billion in new federal spending, 80% of which goes to state and local governments through:

• $20.5 mil for USDA Rural Business Cooperative Service
• $80 mil to the Food & Drug Admin
• $1.5 bil to the Economic Development Admin
• $50 mil to Manufacturing Extension Partnership (MEP)
• $6 mil to the National Institute for Innovation and Manufacturing
• $10 mil to the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIMBL)
• $60 mil to the National Aeronautical and Space Agency (NASA)
• $2.45 bil for Defense Industrial Base
• $70 mil to the U.S. Army Corp of Engineers
• $562 mil to the Small Business Administration (SBA)
• $9.1 mil to Cybersecurity and Infrastructure
• $45 bil to the Federal Emergency Management Administration (FEMA)
• $453 million for the Bureau of Indian Affairs
• $7.2 mil for the Environmental Protection Agency (EPA)
• $1 bil for Indian Health Service
• $127 bil for the Public Health and Social Services Emergency Fund
• $4.3 bil to the Centers fo Disease Control
• $945.5 mil for the National Institute of Health (NIH)
• $30.9 bil for the Department of Education
• $19.6 bil for the Dept. of Veterans Affairs
• $353 mil for the U.S. Agency for International Development (USAID)
• $31.1 bil for the Dept. of Transportation
• $900 mil for Low Income Home Energy Assistance (LIHEAP)