U.S. Rep. Guthrie says small businesses could start receiving loans from aid bill on Friday
Rep. Brett Guthrie said small businesses should be able to start receiving government-backed loans through the massive federal coronavirus relief package this week.
But the timeline for individuals to receive checks included in the bill has not yet been set.
Guthrie spoke to reporters Thursday morning about the $2.2 trillion CARES Act, which was signed into law earlier this week. The bill contains funds to keep small businesses paying salaries and meeting other expenses, and will deliver checks to qualifying individuals and some dependent children. It also provides supplemental unemployment dollars to people who have lost jobs during the outbreak.
“We just had 6 million people lose their jobs this week,” Guthrie said. So the process of filing for unemployment benefits “is being overwhelmed as well,” he said.
Guthrie said small businesses should be able to get eight-week loans to cover expenses such as salaries and rent beginning April 3.
The loans will be secured by the Small Business Administration but will come directly from banks, Guthrie said. Businesses with under 500 workers quality for the small business loans.
“The idea is by tomorrow, businesses will be able to get a loan,” Guthrie said Thursday. If the loans are used for salaries, rent and similar business expenses, the loans will be forgiven at the end of eight weeks, he said. The banks will be repaid by the federal government.
“Community banks and local credit unions are the front lines of the economic crisis,” Guthrie said.
When asked what happens if small businesses haven’t recovered in eight weeks, Guthrie said that would have to be determined.
“Hopefully, we are looking at things in eight weeks from a different perspective,” he said. If not, more federal assistance could be needed.
“I can’t imagine, with as much effort and money (put into the small business program) … that when we get through eight weeks, to just stop it” if businesses still need assistance, Guthrie said.
The aid bill contains checks of $1,200 for individuals earning up to $75,000 and couples earning up to $150,000. The bill also provides $500 for certain dependent children. People who don’t normally file tax returns, such as retirees on Social Security, will receive checks, and Guthrie said officials are “still trying to find the best way” to distribute the money.
Unemployment benefits will be expanded, with people receiving $600 in addition to their state benefits, which typically amount to 50% of a person’s income.
“The government wanted to make everyone whole,” and settled on $600 as the amount that best fit, Guthrie said. The idea is that some people “will get their average incomes,” while those at the bottom of the income scale will receive more, he said.
The current bill needs to be implemented before additional federal aid is discussed, Guthrie said, but future aid might be needed by state governments.
“State revenues have been affected across the country,” Guthrie said. “We are going to have to look at the true coronavirus costs to state and local governments.”
By James Mayse