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Tuesday, 21 April 2020 22:58

What's in the Nearly $500 Billion Deal to Protect Small Business from Coronavirus Fallout

Written by Ben Werschkul, Yahoo! Finance

Index

A deal to provide additional pandemic relief for small businesses, hospitals and others appears set to get through Capitol Hill in the coming days and then become law later this week.

On April 21, Senate Minority Leader Chuck Schumer said in an interview “we have a deal with just a few outstanding I’s to dot and T's to cross.”

 

Later in the day, President Donald Trump urged Congress to pass the deal and said he would sign it even as lawmakers scrambled to put the final bill together.

 

By that afternoon, multiple outlets reported that the deal has been completed and the text of the legislation began to circulate.

 

The centerpiece of the deal is additional funding for the Trump administration’s Paycheck Protection Program (PPP) aimed at small businesses. The $349 billion initially allotted for the program ran out of money last week after just 13 days because of outsized demand.

 

Over $150 billion is included for other priorities like testing, another business loan program and hospitals.

 

The money is intended to be a bridge between the CARES Act, signed into law on March 27, and a Phase 4 deal that could be weeks away and might include a range of controversial issues like vote-by-mail and infrastructure spending.

 

Here’s a rundown of where lawmakers ended up after weeks of negotiations.

 

More than $300 billion for the ‘Paycheck Protection Program’

 

The core part of the deal is additional money for the PPP which, despite myriad difficulties, has become a lifeline for small businesses.

 

The program, which disbursed $349 billion already, offers forgivable loans managed by the Treasury Department and the Small Business Administration. They are designed to cover U.S. businesses with 500 or fewer employees negatively impacted by the coronavirus and the broader economic shutdown. The loans can be made for up to 2.5 times the average monthly payroll of a business but can’t exceed $10 million per business.

 

An additional $320 billion has been appropriated for the program, with $60 billion of that earmarked for small banks. “This is even more money than Senate Republicans first requested,” Leader Mitch McConnell noted in a statement.


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