Legislation Would Give Extra Boost to Small Businesses
The recently signed Families First Coronavirus Response Act (FFCRA) requires that businesses with fewer than 500 employees pay leave for certain employees who cannot work or telework for “qualifying COVID-19 reasons,” according to Tire Industry Association (TIA) officials.
Senate leadership is now working to negotiate another response package, the CARES Act (S. 3548), which could provide "significant support for small businesses trying to navigate this unprecedented time."
As currently drafted, the proposed legislation will provide cash payments of up to $1,200 per individual to "help lower and middle income families."
“Of particular import to small and mid-sized businesses, the bill provides loans of up to $10 million for employers with under 500 employees to help them cover payroll, mortgages, rent and other specified expenses," say TIA officials.
“As currently drafted, the bill would further allow businesses that retain their employees and payroll levels between March 1, 2020 and June 30, 2020, to have any part of such loan that was used to cover payroll through that period forgiven entirely - to the extent that employees or payroll levels are reduced, loan forgiveness would be proportionately reduced.
“The exception to this would be that anything paid to a single employee over $33,333 during the three- month period or any payments for leave established by the FFCRA, for which the employer would be receiving a tax refund, would not be eligible for loan forgiveness."
TIA oficials believe there will probably be significant changes “between the current draft and the final product, and it remains to be seen what the loan application and approval process would look like and how quickly employers would be able to access such loans if the bill is passed with these provisions.
“However, particularly for small businesses that may have been considering, but have not yet implemented, a layoff or furlough (and who would therefore may be eligible for loan forgiveness), as well as for any business needing an influx of cash to stay in operation - this legislation could seriously impact their decision making and is certainly something to watch.”
TIA officials say they will continue to monitor the legislation and is urging Congress “to take action to further support small businesses during this difficult time.”