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What Small Businesses Need to Know About the Coronavirus Stimulus Package

Published on April 05, 2020

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On Friday, March 27, President Donald Trump and Congress passed a $2 trillion stimulus package. This legislation is the largest emergency aid in U.S. history and is intended to help both individuals and businesses struggling with the economic impacts of the coronavirus outbreak.

Initially, the relief program instructions for small businesses was unclear. However, guidelines released on Tuesday, March 31, defined what’s included in the package, who qualifies, and how companies can take advantage of the stimulus bill.

What does the stimulus package include for small businesses? 

According to the U.S. Chamber of Commerce, The bill includes $350 billion to help small businesses stay afloat and to prevent workers from losing their jobs in the wake of the Coronavirus pandemic. This is broken down through the following:

Paycheck Protection Program

100 percent federally guaranteed loans of up to $10 million. A portion of these loans may be forgiven under certain conditions, such as payroll costs and group health coverage. Principal and interest are deferred for up to a year, and borrower fees are waived.

Emergency EIDL Grants

Expedited access of up to $10,000 for businesses that have already applied for an EIDL loan. This is expected to cover employee compensation, provide sick leave, and relieve debt obligations.

Small Business Debt Subsidy

Provides subsidized loans for Small Businesses with existing SBA loans. The SBA will cover principal, interest, and associated fees that are owed on an existing loan for a six month period.

Who qualifies for the small businesses stimulus package items? 

According to the U.S. Chamber of Commerce, the following groups generally qualify for the stimulus package items (all with fewer than 500 employees):

  • Sole proprietors and independent contractors
  • Small businesses
  • Non-profits
  • Veteran’s organizations
  • Tribal businesses
  • Cooperatives
  • ESOPs

How can small businesses apply for the stimulus package items?

For the paycheck program, according to the U.S. Small Business administration, the first step is to fill out the SBA’s Paycheck Protection Program sample application.

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution that is participating. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of the lender or borrower. A list of participating lenders, as well as additional information and full terms, can be found at www.sba.gov.

When can small businesses start applying for the stimulus package items? 

According to the U.S. Chamber of Commerce, The Paycheck Protection Program application process will roll out in the following phases:

  • On April 3, 2020, small businesses and sole proprietorships can begin applying for these loans.
  • On April 10, 2020, independent contractors and self-employed individuals can begin applying. The SBA advises that all businesses should “apply as quickly as you can because there is a funding cap.”

Our mission at e-Health is to support the health and well-being of individuals and small businesses. For additional coronavirus advice, health tips, and information on coverage, please visit eHealth.com

For information and guidelines specific to the coronavirus outbreak, visit http://cdc.gov/

For information and guidelines specific to the stimulus package, visit www.sba.gov.

This article is for general information and should not be relied on as medical or financial advice. Check with a medical or financial professional for advice.

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