Federal Stimulus Bill Announced;
Illinois Approves Assistance for Small Business
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The
U.S. Senate passed a $2 trillion stimulus bill in response to the COVID-19 pandemic. The House is expected to vote the bill into law tomorrow. In addition,
the Illinois Department of Commerce & Economic Opportunity (DCEO) today announced that they are working with partners to launch emergency assistance programs for small businesses.
Here are some of the details as we understand them at “press time” today.
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State Offers Small Business Emergency Loan Fund
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Businesses outside of Chicago with fewer than 50 employees and less than $3 million in revenue in 2019 are eligible to apply for up to $50,000 in low-interest loans. Successful applicants will owe nothing for six months and then will begin making fixed payments at a below-market interest rate for the remainder of a five-year loan.
Starting tomorrow (Friday, March 27), interested businesses will be able to express interest at a form posted
here. Eligible businesses will be invited to submit a full application beginning on April 1st. Once submitted, the state will strive to make a loan decision within 10 days and make funds available within two days of receiving bank information from a business.
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Federal Stimulus Bill Expected to Be Approved
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The U.S. Senate approved a historic $2 trillion stimulus package in response to the economic impact of the COVID-19 virus. This legislation, the largest emergency aid package in U.S. history, was passed in the Senate by 96-0. The bill, which is currently with the House of Representatives, includes the following:
Direct Payments to Individuals
Individuals who earn $75,000 in adjusted gross income or less would get direct payments of $1,200 each, with married couples earning up to $150,000 receiving $2,400 and an additional $500 per child. The payment would scale down by income, phasing out entirely at $99,000 for singles and $198,000 for couples without children.
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Student Loan Payments Suspended
The Department of Education would suspend payments on student loan borrowers without penalty through September 30th, 2020.
Boost in Unemployment Benefits
The federal government will give jobless workers an extra $600 a week for four months on top of their state benefits, which range from $200 to $550 a week, on average, depending on the state.
In addition, the bill will add up to 13 weeks of extended benefits, which would be fully covered by the federal government. Currently, state unemployment checks last up to between 12 weeks and 28 weeks, depending on the state.
Also, the stimulus has a new pandemic unemployment assistance program which would provide jobless benefits to those who are unemployed, partially unemployed or unable to work because of the virus and don’t qualify for traditional benefits. This includes independent contractors and the self-employed who typically don’t qualify for such assistance, and to gig economy workers who aren’t eligible in many states.
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$500 Billion Lending Program
The U.S. Treasury Department can provide $500 billion in loan guarantees and investments.
While $25 billion would go towards passenger air carriers, $4 billion for cargo air carriers and $17 billion for businesses that work in national security, the remaining $454 billion are given wide latitude to provide loans to businesses, states and municipalities.
The bill provides federally guaranteed loans available at community banks to small businesses that pledge not to lay off their workers. The loans would be available during an emergency period ending June 30th, and would be forgiven if the employer continued to pay workers for the duration of the crisis.
There are restrictions on businesses who receive loans. Those businesses may not issue dividends for up to a year after the loan is no longer outstanding, must retain 90% of employment levels as of March 24th “to the extent practicable” through September 30th, and the loans cannot last longer than five years.
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Credit for Retaining Payroll
Businesses would get a tax credit for keeping idled workers on their payrolls during the COVID-19 virus pandemic, so long as the businesses meet certain criteria. They would get a refund for half of what they spend on wages, up to $5,000 per worker.
Loans to mid-sized businesses (those between 500 and 10,000 employees) and non-profit organizations have specific provisions where no payments will be due for the first six months after the loan is issued.
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Protections Against Foreclosures and Evictions
The bill also includes housing protections against foreclosures on mortgages and evictions for renters. Anyone facing a financial hardship from the COVID-19 virus shall be given a forbearance on a federally backed mortgage loan of up to 60 days, which can be extended for four periods of 30 days each.
Those who service federally backed mortgage loans may not begin the foreclosure process for 60 days from March 18th. The bill also does not allow fees, penalties or additional interest to be charged as a result of delayed payments. It includes similar protections for those with multifamily federal mortgage loans, allowing them to receive a 30-day forbearance and up to two 30-day extensions.
Those with federally-backed mortgage loans who have tenants would also not be allowed to evict tenants solely for failure to pay rent for a 120-day period, and they may not charge fees or penalties to tenants for failing to pay rent.
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For the past several days we’ve sent you updates at a rapid pace as laws are changing. We know this is a lot of information to absorb at one time. While the doors may be closed at 211 S. Wheaton Ave., we are still here for you. If you have questions, please call us at our main number,
(630) 653-1616. You can also reach out directly to your accountant, or email us at
info@mmaadvisors.com
. Our team is working virtually and we’ve had success with video conferencing with clients and with each other.
Thanks to the support of technology, a great staff, wonderful clients and a willingness to work in new and innovative ways through these next weeks, we will get through this--together.
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Ron Austin, CPA
Brian Eisenmenger, CPA
Brian Hagene, CPA
Brett Mathieson, CPA
John Straus, CPA
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