Last week the CARES Act, a $2 trillion coronavirus stimulus package, was passed by the U.S. Federal Government.
A historic first, the coronavirus stimulus package is the largest in U.S. history and couldn’t have come at a better time. With mass layoffs and shelter-in-place regulations in effect, the futures of the U.S. economy and many small businesses are at stake.
At a high level, the coronavirus stimulus package will support small businesses with:
- $377 billion in loans and grants
- Additional tax credits and extended deadlines
- Relaxed operating regulations
Throughout this post, we look at how each of these initiatives will help small businesses withstand this challenging time.
Small business funding
The U.S. Federal Government has introduced $377 billion in loans and grants to help small businesses retain their employees.
Under the coronavirus stimulus package, a paycheck protection program of $350 billion is now available to small businesses across the country.
Intended to keep paychecks flowing, the program provides 8 weeks of cash-flow assistance loans to small businesses.
“The coronavirus stimulus package provides 8 weeks of cash-flow assistance to small businesses.”Senator Marco Rubio, 2020
Certain businesses will also qualify to have these loans partially forgiven by the Federal Government. And those that use the money for payroll, employee benefits, rent, and utilities will have their loans converted into grants.
Payroll tax credits
The coronavirus stimulus package includes $280 billion worth of business tax cuts. While this figure applies to businesses of all sizes, small businesses will benefit the most from tax credits related to payroll.
Under the stimulus plan, small businesses will receive a 50% refundable payroll tax credit on employee wages. They will also be granted extended deadlines for payroll taxes including their social security contributions.
The coronavirus stimulus package includes updates to numerous laws that affect small business operations. Under the stimulus plan, small businesses can now:
- Retroactively claim interest and tax deductions
- Deduct losses against taxable income from previous years
- Pay down employee student debt tax-free
- Get tax credits for interior renovations faster
House members, as well as speaker Nancy Pelosi, have said that the coronavirus stimulus package is just the start of federal small business support during this time. As more government relief packages become available, we’ll continue to include the latest updates in this post.
While we wait for house members to return to Washington, the business community has rallied to give small businesses additional support during this time. For financial resources outside of the government stimulus plan, click here.
See how Method:CRM helps small businesses do more — with less.
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