Here’s What the $2 Trillion Stimulus Really Means for Small Businesses

The COVID-19 outbreak has been a nightmare for small businesses. Many have shut their doors under orders from state and local governments, while others struggle to provide essentials such as food and medicine while protecting workers and customers from the novel coronavirus. Without help, and fast, many of the 60 million Americans employed by small businesses could soon be out of work and unable to pay for rent and food.

“Every day, I am hearing from small business owners who are anxious about the future of their businesses and how they can continue to pay their employees. The last thing they want to do is to lay off their employees, but they fear they may have no choice,” said Senator Susan Collins (R-ME), a member of the Senate Committee on Small Business and Entrepreneurship, in a release Wednesday.

Fortunately, the $2 trillion economic rescue bill passed by the Senate does not overlook small businesses. It includes $377 billion to put these companies on life support through what could be weeks or months of restrictions.

The bulk of that money, $349 billion, will be doled out in the form of federally guaranteed loans to companies with 500 or fewer employees, to help them continue paying workers even if the business is unable to operate, or if employees can’t come to work, due to COVID-19. Lenders certified by the Small Business Administration can provide companies with up to $10 million, to cover wages, tips, paid sick leave, employee health care benefits, retirement contributions, rent or mortgage interest, and certain other expenses.

Self-employed individuals and gig economy workers can also apply for these loans, as can 501(c)(3) nonprofits, 501(c)(19) veteran’s organizations and Tribal business concerns.

“Here’s the really interesting thing: Under certain conditions … some of these loans will be forgiven, that is they turn into grants from taxpayers,” David Wessel, senior fellow in Economic Studies at the research group Brookings, told National Public Radio.

Payroll and mortgage interest costs incurred during the eight weeks starting Feb. 15 will be eligible for forgiveness. The bill includes provisions to expedite these loans, such as quickly adding more SBA-approved lenders and streamlining the approval process.

The bill also earmarks funds to help small firms in other ways:

  • Quick emergency cash

$10 billion is included to expand access to the SBA’s Economic Injury Disaster Loans. Companies hurt by COVID-19 could access advances of $10,000 within just three days to maintain payroll and provide paid sick leave.

  • Debt relief

For companies affected by COVID-19 that already have SBA loans, $17 billion is earmarked to cover their principal, interest and fees for six months.

  • A helping hand

SBA resource partners, including Small Business Development Centers and Women’s Business Centers, would get $265 million in grants to provide counseling, training and other help to small businesses hurt by the pandemic. The Minority Business Development Agency will get $10 million.

Taken together, these measures are meant to help small businesses survive until they can operate normally again, without laying off their workforces. As the bill makes its way through Congress, business owners are looking over the measures and trying to figure out how to best make use of them.

“Our hope is to not to need to borrow, but with all the uncertainty of not knowing when we will be able to re-open our doors, we may actually need to,” said Becky Middleton, co-owner of Mommy’s Trading Post, a consignment shop in Alameda, Ca. “I think that any assistance our government can give to small businesses right now (and in the foreseeable future) is really needed. While this virus is extremely scary, so is the thought of a recession.”

The committee recognized that this measure may not cover everything the sector needs to weather the pandemic.

“More legislation will certainly be necessary going forward,” Senator Jeanne Shaheen (D-NH) said in the release.


Carrie KirbyCarrie Kirby spends a lot of time asking people about something they think about but rarely talk about: money. Her work on personal finance, business and technology has appeared in San Francisco Magazine, Consumers Digest, Wise Bread and more publications. Carrie’s most recent work about her other love, travel, appears in The Best Women’s Travel Writing: Volume 10. She lives on an island (Alameda) with her husband and three kids, and blogs about getting them all where they need to go without owning a car at carfreemom.com.

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