Federal bill would give $300B for small business loans
Photo | SHNS
U.S. Rep. Jim McGovern, D-Worcester
A bill under debate in Congress would provide $300 billion in loans for small businesses and be retroactive to March 1, helping workers who've already been laid off because of the coronavirus pandemic.
The size and scope of the bill was being debated in Washington, D.C. on Monday, with the proposed Keeping Workers Paid and Employed Act devoting loans of up to $10 million to businesses with 500 or fewer employees. It would also benefit nonprofit entities.
Democrats and Republicans were divided over the potentially $2-trillion bill aimed at saving businesses and aiding an economy brought to a near standstill by the pandemic. Legislators are split between how much the bill should include help for smaller businesses or certain industries, The Washington Post reported.
The loans, which would be federally guaranteed to businesses retaining a payroll through the outbreak, would include $300 million for payroll support, such as paid sick or medical leave, along with mortgage payments and debt obligations. The portion of the loan used to cover payroll and payments on pre-existing debt would be forgiven if businesses retain their employee and payroll levels in the four-month period between March and June.
The bill would also include $240 million for the federal Small Business Administration's small business development and women's business centers, $25 million for grants to associations representing resource partners, and $10 million for minority business centers.
U.S. Rep. Jim McGovern, a Worcester Democrat, has said he wants legislation to include targeted help for arts and cultural communities, and for healthcare entities to receive help for telehealth services.
Economists already foresee a major hit due to coronavirus, including New York investment firm J.P. Morgan, which has predicted a 14% contraction in the American economy in the second quarter. Bruce Kasman, the firm's chief economist, said in a note to investors March 20 the pandemic will cause a global recession.
J.P. Morgan forecasted consumer spending to fall to 25% of normal rates, with many stores and restaurants closed or heavily restricted by government mandates, before picking back up. It is forecasting a relatively quick rebound, with 8% growth in the third quarter and 4% growth in the fourth quarter.
Wells Fargo, a financial firm based in San Francisco, has said it expects the outbreak to weigh heavily on economic activity for at least three to six months. It predicts what it called a short but deep recession.
WBJ Web Partners
Most Recent
Most Recent
3 Comments