The Senate is expected to vote on a $2 trillion stimulus bill tonight that is designed to address economic dislocations caused by the national response to the Coronavirus. The House is likely to vote tomorrow. The President will sign the bill soon after the House vote.
$500 Billion for Companies Affected by the COVID-19 Crisis
The bill provides $500 billion for companies affected by the crisis, including $17 billion for “businesses critical to maintaining national security” and more than $400 billion “to make loans, loan guarantees, and other investments in support of programs or facilities established by the Board of Governors of the Federal Reserve System for the purpose of providing liquidity to the financial system that supports lending to eligible businesses, States, or municipalities”.
The airline money has become a mix of grants and loans, including:
- $32 billion for “the continuation of payment of employee wages, salaries, and benefits”. This is divided up as follows: $25B for passenger airlines, $4B for cargo airlines and $3B for airline contractors.
- $29 billion in loans and loan guarantees divided up as follows: $25B for passenger airlines, repair stations and ticket agents, and up to $4B for cargo airlines).
The bill also suspends certain aviation excise taxes until the end of the year.
The bill puts new restrictions on this money, including: no stock buybacks for companies that receive money, no increases in executive compensation, and no money for businesses owned / operated by an elected official (e.g. President, Member of Congress). The bill also creates an oversight board that will oversee the program and an inspector general position with subpoena power.
Small Business Interruption Loans
Section 1102 (Small Business Interruption Loans) of the bill provides $367 billion in loans for small businesses (fewer than 500 employees) that have maintained their payroll or have rehired employees.
- Small businesses may take out loans up to $10 million and cover employees making up to $100,000 per year.
- Allowable uses include payroll costs; costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums; employee salaries, commissions, or similar compensations; mortgage payments; rent (including rent under a lease agreement); utilities; and interest on any other debt obligations that were incurred before the covered period.
- Loans would be forgiven if the business avoids employee layoffs.
- No collateral or personal guarantee is required to receive a loan.
- Non-profits, veterans organizations and tribal businesses also qualify as long the organization has fewer than 500 employees
For further information, please contact Mike Salsgiver (503-685-8305, mikes@agc-oregon.org)