After the U.S. House on Friday approved the monumental CARES Act, some Lake County business owners were keeping their fingers crossed that financial relief would be on the way fast.
Earlier this week, the U.S. Senate unanimously passed a $2.2 trillion stimulus package, the Coronavirus Aid, Relief and Economic Security Act, to assist states, businesses and individuals. The U.S. House followed suit and sent the bill to President Trump for approval.
The CARES Act, the largest emergency stimulus package in U.S. history, includes $350 billion in relief for small businesses. The bill authorizes emergency loans to distressed businesses, establishes and provides funding for forgivable bridge loans and provides additional funding for grants and technical assistance, according to the Senate bill summary.
“I think it is great what the government is doing, allowing independent contractors and business owners the opportunity to get unemployment, when typically, they can’t,” says Chris McCain, owner of Dancin’ Ballroom in Leesburg. “This (COVID-19) has forced some businesses to shut down and not work.”
Still, Chris thinks more will need to be done.
“I think it will benefit a lot of the businesses, but I also worry,” Chris adds. “I don’t think $2 trillion is going to be enough for small businesses around the United States that are going to be funded. I think this is the first of several stimulus packages for small businesses and, honestly, I think it is going to take three to six months before we really start seeing an uptick in businesses getting back on their feet from this.”
According to a National Small Business Association news release, the CARES Act would:
• Create the Paycheck Protection Program, a nearly $350 billion program to provide eight weeks of cash-flow assistance to small businesses through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would largely be forgiven, which would help workers to remain employed and affected small businesses and the economy to quickly snap back after the crisis.
• Allow the Paycheck Protection Program to cover payroll costs, paid sick leave, supply chain disruptions, employee salaries, health insurance premiums, mortgage payments and other debt obligations to provide immediate access to capital for small businesses that have been impacted by COVID-19.
• Allow for expedited access to capital by establishing a $10 billion program for small businesses that have applied for an Economic Injury Disaster Loan to request an advance of up to $10,000 on the loan to provide paid sick leave to employees, maintaining payroll and other debt obligations.
The bill also establishes special rules for certain tax-favored withdrawals from retirement plans; delays due dates for employer payroll taxes and estimated tax payments for corporations; and revises other provisions related to losses, charitable deductions and business interest.
“The other thing about the stimulus that I think is really good is offering benefits for businesses if they keep their employees after this time is over,” Chris adds, saying that the income for payroll could possibly be forgiven, “which is a great thing, and being able to pay back (loans) over 10 years is really good as well.”
Jerry Galbreath isn’t sure whether his small real estate company, Galbreath Realty in Leesburg, is covered under the stimulus package.
“To be honest, I’m not expecting any money from the stimulus because I don’t know how it relates to the real estate industry,” he says. “My salespeople are independent agents who are on commission only and pay their own Social Security and withholdings. So, the money might go to the agents instead of me because they operate as a little business themselves.”
Fortunately, real estate transactions have not come to a screeching halt during the coronavirus pandemic, he says. In the past few weeks, he has closed several deals.
“But I expect that the pipeline is going to get empty pretty soon,” Jerry says. “Whether there is going to be enough business to fill it back up remains a question mark.”
Chris, however, is not overly concerned about the future of his dance studio.
“I see when we get back working, people are going to be excited to get out of the house and get back to doing some fun extracurricular activities after being stuck in the house,” he says. “I actually see a pretty good uptick for the studio once people are allowed to socially interact with people again.”
For individuals, the CARES Act would provide funding for $1,200 tax rebates, with additional $500 payments per qualifying child. The rebate begins phasing out when incomes exceed $75,000 (or $150,000 for joint filers). The bill also would temporarily suspend payments for federal student loans.
The CARES Act addresses much more than economic needs. With respect to health care, the bill provides additional funding for the prevention, diagnosis and treatment of COVID-19; prioritizes Food and Drug Administration review of certain drugs; allows emergency use of certain diagnostic tests that are not approved by the FDA; and expands health-insurance coverage for diagnostic testing and requires coverage for preventive services and vaccines, according to the Senate bill summary.
Business owners in Lake and Sumter counties can consult these resources for more information on financial assistance:
For assistance with both the SBA Economic Injury Disaster Loan Program and the Small Business Emergency Bridge Loan Program, area businesses should contact the Florida Small Business Development Center at UCF in Lake County at 352.404.7338 for the Groveland office or 352.602.4575 for the Mount Dora office.
Follow the Lake County Agency for Economic Prosperity’s Facebook page at facebook.com/elevatelakefl for the latest updates.