WASHINGTON, D.C. — This week, the White House is expected to sign a new $480 billion spending package that will refill the depleted stores of America’s small business loan programs for COVID-19. The bill has already passed the Senate and could gain full authorization before the weekend.
That’s good news for small business owners who are still depending on loans from the Small Business Administration for aide after an initial $250 billion injection from the March 29 CARES Act was exhausted. But what does it really mean for small business owners?
The bill refunds the federal Paycheck Protection Program (PPP) — $310 billion is allocated to PPP programs. That may not seem like much compared to the total $2 trillion CARES Act, but it’s more than the initial $350 billion set aside for PPP to begin with. And it’s a significant amount when compared to the 2008 Recovery Act, which totaled $840 billion.
Some tackle stores and manufacturers began to see the first approval notices for PPP applications last week. Business owners who are unsure whether their application was approved or not should check with their local lender.
New PPP loan applications are not being accepted by the SBA at this time; however, enrollment is expected to reopen as soon as the new stimulus bill is signed by the president.
A small slice reserved for the little people – $60 billion of that PPP funding is set aside for community-based lenders and mid-sized banks. This, after corporations like Shake Shack and Ruth’s Chris Steak House came under fire for gobbling up a combined $30 million of initial PPP funding. Shake Shack later returned their $10 million slice of that pie.
EIDL gets a boost – The Economic Injury Disaster Loan program (EIDL), which is still being processed in-house by the SBA, rather than outsourced to lenders like the PPP program, receives a further $60 billion in funding. So far, few businesses are reporting receipt of EIDL funds.
Employee Retention Credits still count – The Employee Retention Credit, a 50% tax credit for up to $10,000 in wages for each employee of a business negatively impacted by COVID-19, remains. Qualifying business owners must be fully or partially suspended due to government order or be making less than 50% of comparable quarterly earnings. This credit cannot be used in concert with a PPP loan.
Funds for testing increased – Scientific data shows that mass availability of testing is key to reopening the nation’s economy. In short, the sooner we can test more people, the sooner the economy can safely begin to return to something resembling normal. The bill sets aside $25 billion to expand testing capacity for COVID-19.
In the long term, this week’s $480 billion bill is expected to be one of several rounds of federal refunding required as the country progresses further into the COVID-19 pandemic. U.S. deaths as of this publication total more than 46,000, though governors of some states—Texas, Tennessee, South Carolina and Georgia—plan to lift shelter in place orders as soon as May 1. Those orders contradict research from The University of Washington, which estimates that social distancing measures in many states cannot be safely lifted until after May 11 and as late as June 8 for much of the nation’s heartland.
Faced with adversity, small business owners are looking to creative marketing and engagement measures to bolster sales in these unprecedented times. And thankfully, in the tackle industry, many retailers are managing to survive using a combination of those tactics and their own ingenuity.