What does the next stimulus bill mean for small businesses?


What does the next stimulus bill mean for small businesses?


A few weeks ago, the Committee on Small Business and Entrepreneurship shared details of what the next coronavirus stimulus package would look like. At $1 trillion, the Health, Economic Assistance, Liability, and Schools (HEALS) Act is significantly smaller than the CARES Act, the first major coronavirus stimulus package enacted in March, and a third of the size of the HEROES Act, proposed by Democrats in May. That being said, the new proposal features a number of key initiatives aimed at supporting small businesses.


1. More PPP loans

The new bill would provide more Paycheck Protection Program (PPP) loans to small businesses, but on a more selective basis. To be eligible for some of the $190 billion set aside, your business must have fewer than 300 employees―the CARES Act set the cap at 500―and you would have to prove that your sales have dropped by 50% or more from the same time last year. The idea is to help those businesses that have been the hardest hit from the new lockdown restrictions.


2. Previous loans forgiven

If you took out a PPP loan under the previous stimulus package, you might not need to pursue a lengthy “forgiveness” process. The HEALS Act proposes that any business that took out a loan of $150,000 would not have to complete a full application for loan forgiveness, as long as they demonstrated a “good faith” attempt to comply with the requirements of the loan. If your business received a loan of $2 million or less, you would still have to complete the application, but you wouldn’t have to submit any documentation. In both cases, you would be required to keep relevant documentation for three years and may have to submit to some demographic checks.


3. More eligible expenses

The new stimulus would also change what businesses can claim PPP loans for. As with the CARES Act, 60% of your PPP claim must be payroll-related. But under the HEALS Act, the remaining 40% could cover different expenses, including:


●      Software and cloud computing payments

●      HR and accounting costs

●      Protest property damage (not covered by insurance) 

●      Some supplier expenditures

●      Personal protective equipment

●      Business health and safety alterations


4. Another (smaller) unemployment boost

The CARES Act was notable for its $600 boost to weekly unemployment claims, something that Republicans argued reduced the incentive to return to work. That $600 boost ended at the end of last month, so the HEALS Act has renegotiated this rate to cover 70% of wages. The result is what amounts to a $200 boost per week.


5. Liability shield

Businesses, along with hospitals and schools, would be protected from being sued for coronavirus-related damages for up to five years. Plaintiffs could still pursue lawsuits under this liability shield, but they would be required to prove gross negligence of public health guidelines.


Everything is still up for negotiation

It’s important to point out that all of these points are still proposals at this stage. Congress is in the process of negotiating what the final bill will look like. The future is as uncertain as ever, but hopefully small business owners will be able to rest a little easier soon.



About the Author

Joe Mackenzie is a writer and editor for Snagajob at Upwork. They write articles on tech, business and lifestyle, focusing particularly on the impact of the coronavirus. Joe's first hourly job was at the Royal Oak pub.

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