March 25, 2020 – Congressional Update Regarding Small Business Loans
March 25, 2020
Congress has agreed on a COVID-19 stimulus bill that will provide substantial economic relief to both individuals and companies. The full details of the bill have not been released, but it is expected to include $350 billion in small business loans and $500 billion for loans to distressed companies. Congress votes on the bill later today.
Small Business Loans
The federally guaranteed loans to small businesses will require those company’s pledge to not lay off workers. The loans will be available until June 30 and will be forgiven if the employer pays employees until the end of this crisis. Companies in need of these funds should quickly analyze whether they qualify.
Distressed Company Loans
There will be $425 billion in funds for distressed businesses and an additional $75 billion earmarked for specific industries. The transparency of these loans was the main sticking point in negotiations between the political parties. That was resolved by requiring immediate disclosure of the loans and congressional oversight. Businesses that obtain funds in this program will be prohibited from executing stock buybacks until a year after funds are repaid.