Senate Debate Continues for Federal Small Business Relief Passage
- By Molly Bond
On the morning of March 25, 2020, Republican and Democratic leadership in the U.S. Senate said they had reached a deal on a $2 trillion stimulus packagee that provides support to small businesses. As of press time, it is unclear if the Senate plans to vote on the stimulus bill later today or early tomorrow; it is also unclear when the House will vote to pass the bill. As the Senate continues to deliberate, booksellers should use this opportunity to reach out to their senators and urge them to put aside their partisan differences to pass the stimulus bill.
Throughout the legislative process, the American Booksellers Association’s Advocacy team has been in touch with the Senate Small Business Committee and will continue to monitor the pending legislation until it is signed into law.
While the full final text of the bill has not yet been released, reports and comments from those familiar with the negotiations note the following:
- Increased unemployment benefits: Increases the current maximum unemployment benefit by $600 per week and ensures that laid-off workers, on average, will receive their full pay for four months. According to a letter Senator Schumer (D-NY) sent to colleagues, the bill “ensures that all workers are protected whether they work for businesses small, medium, or large, along with self-employed and workers in the gig economy.”
- Retention tax credit: Adds a retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis.
- Paycheck Protection Program: Provides $350 billion for eight weeks of cash-flow assistance through 100 percent federally guaranteed loans. The covered costs include payroll support, employee salaries, rent, utilities, and other debt obligations. Loans will be available immediately through more than 800 existing SBA-certified lenders, including banks, credit unions, and other financial institutions. The size of the loans will equal 250 percent of an employer’s average monthly payroll, with a maximum loan of $10 million.
- Paycheck Protection Program loan forgiveness: Makes rent, mortgage, payroll, and utility costs eligible for SBA loan forgiveness. If the employer maintains its payroll, then the portion of the loan used for covered payroll costs, interest on mortgage obligations, rent, and utilities would be forgiven. (The loan essentially turns into a grant.)
- Six months of debt relief: Provides $17 billion for the SBA to cover six months of principal, interest, and fees for small businesses with SBA loans granted before the COVID-19 outbreak.
- SBA emergency grants: Allows businesses that apply for an SBA Economic Injury Disaster Loan (EIDL) expedited access to capital through an emergency grant — an advance of $10,000 within three days to maintain payroll, provide sick leave, and to service other debt obligations.
- Entrepreneurial assistance: Provides $10 million for the Minority Business Development Agency and $265 million for grants to SBA resource partners like Small Business Development Centers and Women’s Business Centers to offer counseling, training, and general assistance to small businesses.
- Recovery rebates: Calls for direct payments of up to $1,200 for individuals earning up to $75,000 or $2,400 for married couples filing jointly earning up to $150,000. The amount will increase by $500 for each qualifying child and decrease as income increases, phasing out completely at $99,000 for individuals and $198,000 for married filing jointly.
- Deferral of employer-side payroll taxes: Defers the employer-side of payroll taxes to be paid back in coming years.
Read a one-page summary of the small business section of the bill here.
Watch ABA CEO Allison Hill’s upcoming email alerts to members for a summary of the stimulus package as it relates to booksellers. Find archived email alerts here.