As anticipated, the U.S. Congress has passed a new coronavirus aid bill to provide relief to small businesses, hospitals and testing efforts.
After two weeks of deadlock and negotiations, the Senate held a pro forma session to approve a nearly $500 billion coronavirus relief bill on Tuesday, April 21, 2020. The House of Representatives followed suit on Thursday, April 23.
In total, the legislation amounts to $484 billion in relief. The central focus of the bill is $320 billion for the depleted Paycheck Protection Program (PPP), of which $60 billion is set aside for under-banked businesses. The deal also includes $60 billion in loans and grants for the U.S. Small Business Administration’s (SBA) economic disaster relief fund, $75 billion for hospitals and $25 billion for coronavirus testing.
The new funds for the Paycheck Protection Program will allow for additional taxpayers to apply. As a reminder, the PPP provides forgivable loans to small businesses that keep employees on payroll for eight weeks. The bill sets aside $30 billion of the PPP loan funds for banks and credit unions with $10 billion to $50 billion in assets and another $30 billion for even smaller institutions.
In addition to the $60 billion in loans for the Economic Injury Disaster Loan (EIDL) program, the measure also makes farms and ranches eligible for loans. Finally, the $75 billion for hospitals entails a significant portion aimed at those in rural areas.
Leaders from both political parties indicated that they will seek to pass another large coronavirus aid package like the Coronavirus Aid, Relief, and Economic Security (CARES) Act, once the interim bill becomes law.
For more information on the Paycheck Protection Program loan forgiveness, please see our recent webinar and other resources.
Through these unprecedented times and beyond, your Squar Milner team is ready to serve you. Whether it be applying for a PPP loan, strategizing for full loan forgiveness, or maximizing other components of coronavirus aid bills, we can help. Our tax experts have invested themselves in understanding each aspect of the various relief bills and the opportunities for tax savings and cash flow generation.
Please connect with your Squar Milner tax advisor or reach out to get in touch with one. We can provide answers to your questions and help you come up with a strategy optimized for your specific business needs.
Disclaimer: This material has been prepared for informational purposes only, and is not intended to substitute for obtaining accounting, tax, or financial advice from a professional tax planner or financial planner. All information is provided “as is,” with no guarantee of completeness, accuracy, timeliness or of the results obtained from the use of this information.