What the CARES Act means for you during COVID-19

Posted 4/10/20

More than $2.2 trillion in aid from the federal government has been targeted for an array of programs in responses to COVID-19, the novel coronavirus, and now it’s on its way to American people and …

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What the CARES Act means for you during COVID-19

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More than $2.2 trillion in aid from the federal government has been targeted for an array of programs in responses to COVID-19, the novel coronavirus, and now it’s on its way to American people and businesses.

The CARES Act — short for “Coronavirus Aid, Relief and Economic Security Act” — flew through Congress, getting a 96-0 vote in the Senate in favor on March 25 and agreement by a voice vote in the House and the President’s signature two days later. As details spill out about what the bill means for the everyday American, we wanted to drill down to some of the key points and what Chatham County should know.

How the money’s divvied up

More than $2 trillion can go a long way and cover a lot of things, it seems. A short breakdown:

• $560 billion earmarked for individuals through one-time payments and other means

• $500 billion to large corporations

• $377 billion to small businesses for loans and grants

• $339.8 billion to state and local governments

• $153.5 billion for public health purposes, including $100 billion for hospitals responding to COVID-19 and $4.3 billion to the Centers for Disease Control and Prevention

• $43.7 billion to education-related purposes

• $26 billion to other causes, including $8.8 billion for school meals and $15.5 billion to SNAP food stamps

Money for people

One of the more widely-discussed parts of CARES Act is the promise of a one-time payment to most Americans. Most individuals with a Social Security Number who are not dependents will receive $1,200 each, and joint filers will receive a total of $2,400. Additional rebates of $500 will be given to individuals per qualifying child if they meet income standards.

To distribute this money, the Internal Revenue Service will use direct deposit information or the most recent address gathered from the most recent tax returns. Steven Mnuchin, the U.S. Treasury Secretary, has said the Treasury will soon be setting up a website for those without bank accounts or have not given direct deposit information to the IRS for them to fill out that information.

Mnuchin said at a press briefing on April 2 that the Trump Administration was expecting payments to be made within two weeks for those with direct deposit information and later for others.

Payroll help for small businesses

MetLife and the U.S. Chamber of Commerce released its most recent Small Business Index on April 3 with some dire numbers for small businesses. Twenty-four percent of small businesses surveyed said they had already temporarily shut down, with 40 percent of those who hadn’t yet shut down saying they likely would in the coming two weeks.

The U.S. Department of the Treasury and Small Business Administration’s Small Business Paycheck Protection Program (PPP) is designed to help small businesses with funds to stay open and keep people on their payrolls. Small business owners could begin applying April 3 for funds equal to up to eight weeks of payroll costs, including benefits. According to a document from the Treasury, “funds can also be used to pay interest on mortgages, rent and utilities.”

To qualify for the PPP, employers must retain or quickly re-hire employees and maintain salary levels and have 500 or fewer employees. The loan can be fully forgiven if used properly, and payments will be deferred for six months.

The guidelines on the program have shifted over the last week or so. Aaron Nelson, president and CEO of The Chamber for a Greater Chapel Hill-Carrboro, encouraged small business owners to be patient with their banks, who are responsible for giving out the loans.

“Your banker right now is kind of like a clerk at K-mart right now,” Nelson said during an April 3 All Business Briefing hosted by The Chamber. “They’re doing their best to figure this out over the last few days. Please be as patient as you can. The best thing you can do when you see your banker is to be prepared.”

The application is available on the Treasury website at treasury.gov.

More help for small businesses

The SBA has also instituted the Economic Injury Disaster Loan program. An advance on the program has been offered recently, but the full program allows for businesses to receive up to $2 million per entity with up to a 30-year term.

“The SBA is going to offer you an amount that they think will keep your business up and running and will be able to sustain your business operations,” SBA Senior Area Manager Patrick Rodriguez said during the April 3 All Business Briefing. “You won’t necessarily be putting in a number for your loan amount. The SBA is going to do a calculation and come up with a number for you.”

The money can be used for fixed debts, payroll and other bills that could have been paid had the disaster not occurred. Rodriguez said the EIDL is not intended to replace lost profits. He also encouraged business owners to apply for it even if they were also applying for the PPP.

“We don’t know how long this is going to last,” he said. “Maybe the thinking is get in the queue. We’re encouraging everyone to apply, have those funds there offered to you.”

That initial advance, worth up to $10,000 in a forgivable loan, is also still available.

“It is money going out the door to small businesses,” Rodriguez said. “It would be almost malpractice to not go in and sign up for that. Everyone should just go back into their portal and apply for the injury grant by itself. That will not affect your loan application that you’ve already submitted.”

Applicants must have a physical presence in the affected area to qualify for the loan. That application can be found at covid19relief.sba.gov.

Reporter Zachary Horner can be reached at zhorner@chathamnr.com or on Twitter at @ZachHornerCNR.


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