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Stimulus Bill Provides $350B in Relief to Small Businesses

by Danielle Kane | Mar 31, 2020 9:20:36 AM

Contributor: Roseann Freitas

Last Updated: April 2, 2020 2:33 pm

On April 1, 2020, the Treasury Department changed the way senior citizens can claim their stimulus check. Previously, if a person hadn’t filed a return in 2018 or 2019, the individual had to submit to receive their $1,200 payment. Many social security recipients do not meet the requirements for filing and would have to file a return. “Social Security recipients who are not typically required to file a tax return need to take no action, and will receive their payment directly to their bank account,” Treasury Secretary Steven Mnuchin said in a statement.

Help
from the $2 trillion stimulus bill will soon be on its way with
the House passage on Friday, March 27, and President Donald Trump pledging a
quick signature. The bill addresses the economic crisis brought on by COVID-19
authorizing direct payments to taxpayers, dramatically expanded unemployment
benefits and an aid package for small business owners.

At
Better Business Bureau Northwest + Pacific, the bulk of our customers and contacts
are small business owners, and we understand how deeply this pandemic has
affected them. The $350 billion loan package allocated specifically for small
businesses could be a game-changer for the countless mom-and-pop shops that
have had to shut their doors and/or lay off employees during this time.

So, what
do business owners need to do to access this aid? First, they must apply at a lender
approved by the Small Business Administration (SBA). In the past, securing such
loans can take months. To get the money out quickly, the stimulus bill is
calling on the U.S. Treasury Department and SBA to expedite the loan process
and approve more institutions to make the loans. No official word has been
given yet on exactly how fast that could be.

The
other important item to note is that at least a portion of the loans that small
businesses take out will be forgiven so long as the business remains intact and
employs its staff.

If
you’re a small business owner crunched for cash right now, consider getting in
contact with your bank, credit union or lenders to understand what documents
you’re going to need, and start collecting and organizing those records
immediately. But understand, lenders won’t have all the pieces yet. Banks and
credit unions are currently waiting on the SBA to provide reporting guidelines
to fast-track the loan process.

If
you’re a business owner in the mid to large range, your available loan package
is slightly larger, sitting at $454 billion.

Unemployment
Benefits

As of Thursday, March 26, unemployment claims skyrocketed to 3.2 million – far more than we ever saw during the Great Recession. On the whole, the stimulus package is now going to give more workers more benefits for a longer time.

The
$250 billion in unemployment aid is on top of what was already approved earlier
in March in the Emergency Unemployment Insurance Stabilization and Access Act.
That bill granted $1 billion right away for states to use for growing
unemployment claims and to use for administrative costs of running unemployment
offices. However, as unemployment grew, additional expansions were made to
unemployment benefits in this stimulus bill. 

So,
how much money are we talking about? Unemployed workers will get up to $600 per
week; again, this is on top of state benefits.

For
perspective, federal relief during the Great Recession came in the form of an
additional $25 a week on unemployment checks.

Workers
can claim these benefits for no more than 39 weeks, up from the usual 26 weeks.

As of
March 27, there has still been no timeline officialized for how soon unemployed
workers could expect their checks. Nonetheless, BBB understands the pain of
small business owners right now and heard about layoffs many owners have been
forced to take.

BBB
encourages employers to work with their employees – even those you just let go
– to try and help answer any questions about unemployment expectations. In
keeping this relationship strong, you maintain trust and credibility with your
workforce that will pay dividends down the line when the crisis is over. 

Direct
Stimulus Payments

Individual
taxpayers can expect up to $1,200 from the government thanks to the stimulus
bill. Couples would receive $2,400 plus $500 per child. The total of direct
relief amounts to $301 billion.

How
much you get will be based on how much you make, which will be determined by
your 2019 or 2018 tax returns. BBB’s tip is always to file your taxes early; we
are doubling down on that right now.

Unfortunately,
it’s still uncertain when consumers can expect the money. As of the passing of
the bill, it is expected to take three weeks for the IRS to start sending out
money. This is subject to change.

If
you’ve already allowed the IRS to directly deposit your tax return in the last
two years, you will likely receive the money into your account this way. If
not, the IRS will send you a check.

For more information like this head to: https://bbb-businesses.org/covid-19/

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