Beyond IT: Fed Bailout May Cover Your Payroll for 4 Months
We’re IT guys, of course, but we wanted to pass along information from a different domain in case you didn’t see it.
Early this morning on CNBC, a host reported on an element of the Senate bailout package which companies with fewer than 500 employees will want to be aware of. That host said Larry Lindsey, former director of the National Economic Council, called this measure the “big bazooka” of the bailout package.
Here are the key elements:
- Section 1105 of the bailout bill will provide small business loans to cover payroll
- Covers employees earning up to $100,000/year
- Loans are forgiven if a company maintains its payroll for 4 months
In short: for small businesses which can avoid making cuts to personnel, it looks like the Feds will pay those qualifying employees for you.
There’s a bit more info in this article from Politico: https://www.politico.com/news/2020/03/19/who-wins-in-coronavirus-bailout-138419 (scroll down to the section titled “Small Businesses: $300 Billion”).
While there are more details to learn about, the points above hit the highlights. And this legislation, which is the 3rd in a series of bills (two have been signed) in response to COVID-19, still needs to be married to the equivalent House bill that’s taking shape.
Still, it just seemed to be a possible fit for so many of our clients that we wanted to share this information with a wider audience.
Again, we’re in IT so this doesn’t constitute tax/payroll advice, consult your financial professional, yada yada… all the necessary disclaimers. But hopefully this is of some help or interest.
Last thing, while we’re at it: keep in mind that because of the lag in discovering new COVID-19 cases, the numbers will undoubtedly get much worse over the next couple of weeks. This widely-read article describes that lag well: https://medium.com/@tomaspueyo/coronavirus-act-today-or-people-will-die-f4d3d9cd99ca. While the numbers in that article are now out of date, the reasoning isn’t, and it’s fascinating.
However, that lag also means that the strict measures we’re all taking, like social distancing, are having an impact. They’re undoubtedly having a big impact right now – we just won’t see it in the data for two or three weeks.
The economic damage is real. You have hard calls to make regarding your employees and your business. But have confidence that better days are coming in terms of virus/new case statistics – and they may be coming sooner than we can imagine in this moment.
Hang in there and have a safe weekend,