Secretary Mnuchin Explains the Details for Small Business Financial Relief…

Treasury Secretary Steven Mnuchin explains some of details about how the CAREs Act provides financial relief for small businesses (0 to 500 employees). Mnuchin explains how the primary part of the relief bill will support approximately 50% of those impacted.

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The Treasury Department has stood up a system inside the Small Business Administration that cuts through much of the bureaucracy. By using FDIC lenders (local banks) as the point of contact for small businesses and S-corps Treasury can backstop the process.

The local business (or S-corp) takes their payroll and yearly expense documents to their local bank where they already have a relationship. As long as the bank is in the FDIC network; and because the emergency funds are distributed based on a good faith relationship; the bank gives the business or individual immediate access to funds (8 weeks of payroll and 25% of all operating expenses); the bank deposits in the business account. The FDIC guarantees the lender against any risk.

If the business does not continue payroll for the employees, the funds are considered a loan that must be repaid. However, if the business retains their employees (continues to keep current payroll); or -if needed- rehires any recent lay-offs using the funds provided; then the emergency loan becomes a grant the business will not have to repay. The system should be in place by this Friday.

The process is smart and can benefit the majority of Americans. What Trump/Mnuchin has put into place is an incentive, a no cost way, for employers to continue paying their employees instead of the employees using unemployment compensation.

Companies with 0 to 500 employees can access the Treasury funds through their local bank or credit union (FDIC Lender). As long as the company retains their employees, meaning continues to pay them, the loans do not have to be repaid.

This means small business employees get: (1) paid by their employer through July; and additionally, (2) those same employees are getting the coronavirus relief checks from the direct government assistance package [$1,200 per individual ($75k income) /$2,400 per couple ($150k income) plus $500 per child]. This should mitigate a great deal of financial hardship on U.S. workers.

Using the existing FDIC network to backstop and eliminate lender risk was a smart move and will speed up the process.

This entry was posted in Bailouts, Big Government, Coronavirus, Donald Trump, Economy, FEMA, media bias, President Trump, Uncategorized. Bookmark the permalink.

69 Responses to Secretary Mnuchin Explains the Details for Small Business Financial Relief…

  1. The main thing is that they have to cut through the red tape. I have been trying to do the SBA paperwork for the past week to submit our company’s application (we have 16 employees) and it’s been impossible.
    There are no SBA people to talk to and their site keeps on crashing. The application forms seem to change almost daily. It is extremely frustrating to find that all of the state and local economic development agencies are on Corona vacation.

    These are our NY Public Servants who are always bragging how lucky we are to have them and their 6 figure salaries. Sorry to be venting my spleen, but these ass clowns are worse than useless.

    I hope and pray that we will have an easier time when the banks get the money to process. Of course, they are going to be making a pretty penny on their end as well..

    Liked by 7 people

    • GB Bari says:

      Seneca aren’t you going through a local bank?

      Liked by 2 people

      • rich33y says:

        Individual Stimulus Payment – Direct Deposit or mailed check.
        PPP Loans – Through your Bank.
        Small Business Debt Relief Program – Through SBA.gov
        EIDL Loans – Through SBA.gov

        Liked by 2 people

      • Bill Durham says:

        Interesting worldometer stats
        2017 New York flu deaths 4,517
        2020 new York covid 1,218
        Flu season goes from November to March. Covid had been around November to March. New York deaths has been at about 150-160 per day. The high was about 237 and it’s dropped the last few days. Warmer weather? Chloroquine? New York has 56,000 active cases. A 1-2% death rate adds 560-1100 more deaths. I don’t see how the death rate explodes to pandemic levels as we move to the summer. The need for 40,000 ventilators makes no sense. These numbers are fuzzy compared to swine flu.

        Liked by 3 people

      • GB- as of today, our local banks do not have the funds yet. Hopefully by Friday they will.
        However, the SBA just put up a link to the streamlined form for micro businesses including online/ internet sellers.
        From what I gather, this loan is for $10K maximum. It is super easy compared to the other SBA forms. Hopefully the next round of application paperwork will be this easy.
        Here is the link I have, hope it continues to work.
        https://covid19relief.sba.gov/#/

        Liked by 3 people

        • Dutchman says:

          Can a ‘self employed’person, who has a business with only ONE employee (themselves) qualify for such a loan as described?

          Also, saw headline (faux news?) that said a company was going to pay their employees (for retention) i.e. paying their employees even though thry were ‘shut down’, BUT was going to deduct from the employees pay, the amount the employees were getting from Fed government in direct payments i.e. the $1200 per person.

          A) Can the companies do that, and B) do we WANT them to?

          On the one hand, it prevents “double dipping” on the part of employees.

          On the other, perhaps the intention all along is for these employees to be ‘flush’with cash, in order to stimulate our consumer driven economy.

          After all, I have seen nothing to indicate that those employees who are ‘laid off’, and therefore qualify for and recieve the expanded unemployment, will have the,$1200 deducted from their unemployment payments.

          Liked by 2 people

    • bertdilbert says:

      Yesterday I thought they were talking April 30thand now they are talking June 1st?

      Liked by 1 person

      • bertdilbert- not sure what you’re referring to? The SBA loans?
        They are available now, but the current application process is what I was referring to in my comment.

        Like

        • bertdilbert says:

          One of my banks sent this today. It is still in the works.

          The federal government is currently finalizing the details and protocols about how and when different programs and relief will be implemented, and how Bank of America as a financial institution will help facilitate the execution of these programs.
          If you believe that you will qualify for relief from the CARES Act:
          Although details are still being finalized, some documentation may be required when applying for a program when it becomes available.

          Based on the legislation, it may be helpful for interested business owners to gather the following information about their business:
          2019 Payroll — including the last 12 months of payroll
          2019 Employees — 1099’s for 2019 employees and independent contractors that would otherwise be an employee of your business. (Note: Do NOT include 1099’s for services)
          Healthcare costs — all health insurance premiums paid by the business owner under a group health plan.
          Retirement — your company retirement plan funding paid for by the company.
          As always, we are here to assist you and your business in any way that we can.

          Liked by 1 person

    • TPW says:

      Need to got to http://www.sba.gov/disaster-assistance/coronavirus-covid-19 This is the SBA site for Covid disaster assistance with a $10000 advance to your bank in 3 days supposedly then the rest can be taken care of application does not look that detailed but you will have to check out. I called my bank and was put on appointment list. Hope it helps you

      Liked by 3 people

      • TPW- thanks very much. That goes to the link that I put out in my original comment. You are right, that form is very easy to fill out.
        Let us know how it works out with your bank. We are going that route too.

        Like

      • TPW- forgot to ask you this. We will need a fairly large loan for our main business which has 16+ employees. We do not want to lay off or fire anyone.
        Do you know if we apply for the 3 day loan/ advance for $10K, can we still apply for the larger amount?
        If you have a link to any SBA website that has that info, let me know.
        THANKS AGAIN.

        Like

    • Me says:

      Try this bank. It doesn’t have to be your bank, it can be any, but they already have something up on their site. This just covers the paycheck protection program. https://midpennbank.com/paycheck-protection-program/ I looked at the application and it doesn’t look too awful, only a few pages.
      Also, this site gives a nice summary
      https://www.taylorenglish.com/blogs-coronavirus-impact-updates,cares-act-eidl-loans-and-emergency-grants

      Like

    • robotrambles says:

      USDA Loans instead?

      Like

    • bkrg2 says:

      I hear the SBA is supposedly getting things sorted this week (the bill just got signed last week). I wish it was smooth and quick for all small businesses, as many would have not closed given a choice. Not fair & not fair to all the employees paychecks impacted by this “crisis”.

      Son and I are both lucky to work for major global companies, so work & paychecks have not stopped. Don’t know how much longer our luck will run…

      Liked by 1 person

      • VoteAllIncumbantsOut says:

        I’ve said it in the past,
        Keynesian economics is dead!

        The Federal Reserve looks to be going back to its original design of 1913 before congress nationalized them in 1914. Thank god! I hope it sticks, it’s been way to many years and Keynesianism is a failed project.

        Trump has not taken over the Fed, but he is the right man for this country right now.
        I’m still not happy about the pork inside the “CARES ACT” and even President Trump alluded to this in his twitter feed.

        Like

  2. JohnCasper says:

    And just how much is all this going to cost and will Fauci the Destroyer be billed for it?

    Liked by 1 person

  3. Right to reply says:

    What about the individual self employed who works on their own?

    Liked by 1 person

    • Right to reply says:

      I’m self employed, and can’t work due to the distance/quarantine rules.

      Like

      • jimrockfish says:

        I’m the same. Self employed, just me. There is a provision in the bill that allows self employed to apply for unemployment benefits even though we don’t pay into the usual unemployment bucket. But it’s so soon that DES here in Arizona is not up to speed yet. So I have yet to apply. Also can’t reach anybody on their phone numbers. Business has been dead stop for 3 weeks and savings aren’t going to last a lot longer. My primary customers have all stopped buying until end of July. So at that point I can start up again.

        Liked by 1 person

        • Dutchman says:

          Well, business overhead has also probably dropped to near -0- for many self employed, as well.
          I realise this depends on the nature of the business, but for those running a business out of their home, even though they deduct a portion of their rent/mortgage for the business, its on paper.

          So, those people will have their ‘personal’ overhead to contend with, but business overhead will drop along with business income?

          Again, I realise this doesn’t apply to ALL who are self employeed. There ARE opportunities for work, if only temporary; truch drivers, delivery services, and perhaps other opportunities which aren’t yet apperent, as a result of this unique situation we find ourselves in?

          Like

    • TPW says:

      Not sure if it will help you but there is a application through SBA for 10000 advance to your bank and one of the criteria question ask if you are a sole proprietor with no employees or with employees…..so it did not disqualify me from filling out the rest of questions because I have no employees ..then fill out online for the 10000 dollar advance received in 3 days….hope it works for you the site is… Coronavirus (covid19) Small Business Guidance & Loan … select… Economic injury Disaster Loan. Doen’t seem to be complicated.

      Like

      • WishWizardsandMore says:

        I just applied, myself. Very simple form to fill out. I am a sole proprietor that has lost business due to this virus.

        Like

    • doofusdawg says:

      we are once again screwed.

      Like

  4. Parker Longbaugh says:

    Sundance, you have been for years the lonely voice explaining how the GFC fed bucks were never intended to go to Main Street but Wall Street. Now we see how President Trump and his team are ensuring that Xi Pooh Flu financial rescue package money will go to Main Street. Thank you for you insight and information.

    Liked by 3 people

  5. LW says:

    What if someone owns a business with no employees? Do they have to pay the loan back?

    Like

  6. My business is dead in the water but none of this helps. I have no employees yet, just me and my partner, and we can’t do anything because oil and gas is shut down. No one is answering the phone at our customers’ sites. I can’t travel to make sales calls.

    Gotta keep pushing.

    Like

    • NanetteDragoon says:

      Is that 25% of all operation cost for 8 weeks only or rest of the year?

      Liked by 1 person

    • amazed treetop downlooker says:

      You should be eligible for salary support based on what you were paying yourselves before this “Covid-crash”….IF I understand it correctly. I guess we’ll find out by Fri or Monday.

      GBY & GOOD LUCK stg !

      Liked by 2 people

      • I’m looking around for other things to sell. I’ve got a connection here locally who is selling medical supplies and equipment. I’m working with him in the meantime to get masks, ventilators, and other supplies into hospitals and state emergency task forces.

        Like

  7. dawg says:

    Ive been following this for a while as my dad, sister and I all own our own businesses. This is YUGE! The fact that you can just go through your local bank is awesome!

    Liked by 1 person

  8. Gary Hunt says:

    Just to point out a detail. The description of the program above states that SBA will advance up to 4 months payroll, rent, mortgage payments and debt service. It then states that IF all laid off workers are rehired, “up to 8 weeks”, TWO MONTHS, of payroll, rent, utilities and mortgage INTEREST, will be considered a grant. The rest will need to be repaid. People should be sure to read the fine print and recognize that this is only a partial handout, you’re taking new debt.

    Like

    • NanetteDragoon says:

      “If the business does not continue payroll for the employees, the funds are considered a loan that must be repaid. However, if the business retains their employees (continues to keep current payroll); or -if needed- rehires any recent lay-offs using the funds provided; then the emergency loan becomes a grant the business will not have to repay.”

      keeping current payroll; or… I believe this means loan forgiveness for 8 weeks of payroll at current existing levels plus 25% operating cost per year (which is a quarter or 4 months) all forgiven and is a grant.

      Like

  9. JohnCasper says:

    Definition of self-mutilation : the act of inflicting injury or disfigurement to one’s own body.

    Nonsuicidal self-injury is the act of deliberately harming your own body, such as cutting or burning yourself. It’s typically not meant as a suicide attempt. Rather, this type of self-injury is a harmful way to cope with emotional pain, intense anger and frustration.

    Definition of America-mutilation : the act of inflicting injury or disfigurement on America.

    America-injury is the act of deliberately harming America, such as shutting down its businesses, recreational activities and liberties. It’s typically not meant as a murder attempt. Rather, this type of America-injury is a harmful way to cope with emotional pain, intense anger and frustration caused by .Bad Orange Man, rather than Dr. Fuci’s favorite woamn, Hillary Clinton, not winning the election

    Like

  10. Steve in Lewes says:

    I have info for some of your commenters that may help. Feel free to post the info without crediting me. This is more to help those folks. Some of these links show MD, but generally apply to all States.
    Specifically for self employed and/or Independent Contractors / 1099

    Google : Disaster Unemployment Insurance Program or

    https://www.careeronestop.org/LocalHelp/UnemploymentBenefits/find-unemployment-benefits.aspx?location=MD&keyword=&persist=true&ajax=0

    http://www.dllr.state.md.us/employment/unemployment.shtml

    (Comment edited by Admin…)

    Liked by 1 person

  11. Tim says:

    According to what was copied and posted: The maximum loan amount is calculated by calculating the average total monthly payments by the applicant for payroll, mortgage payments, rent payments, and payments on any other debt obligation incurred during the 1 year period before the date on which the loan is made. Then multiple that by 4.

    Wouldn’t that be 16 weeks of payroll and 33% of expenses?

    Like

  12. 300 says:

    Ok Someone has to say this. This is fu**n insanity. I just looked at Dallas Co Tx they have 10 deaths 10, not a thousand not a hundred 10 and all of the country shuts down. Mrs 300 and I are self employed / semi retired but can’t pull retirement funds yet but we’ll be fine. I mean WTF, we are letting them squash us and we do nothing. They have fed us a shit sammich and topped it rotten fish sauce and people are lining up for more.

    Open your eyes they are lying to us.

    300

    Liked by 1 person

  13. What about sole proprietors? I have a business that rents and sells triathlon wetsuits. Since all the races in April and parts of May have been cancelled my sales have been hurt. What is my recourse?

    Like

  14. BobR says:

    Hate to say this but watch for non citizens filing false docs taking the $ and going back to own country. Think foreign students taking out credit cards and student loans then leaving the country.

    Like

  15. The right solution:
    1. Get the cure Trump mentioned actually USED. See Rudy Guiliani’s execellent interview with New York doctor who cured 699 patients: https://www.youtube.com/watch?v=1TJdjhd_XG8&fbclid=IwAR3LejIxDEiwiC3aqRNiEz9qzmoNwiiBbartfwgcHmZJsX7nAHNPaG1gVtE

    2. Open America back to business and thrive.

    Like

  16. Roger Duroid says:

    Wow, this is really going to get milked. I know of a business that has enough pre-paid backlog in work to keep going for a year and has no need for layoffs. They will apply and with virtually zero proof get in excess of $50K just for the asking. No payback and no taxes on the money. Somewhat ironic since the owner will get zero of the $1200 checks to individuals due to the income phase out his personal taxes but will have personal use of this much larger sum as the sole owner of the company.

    Like

    • MostlyRight says:

      This will happen but I guess I’d rather see the money in the hands of a successful small businessperson than some government boondoggle, GM bailout or foreign aid. Sounds like this person you know is the definition of Main Street.

      Like

  17. LP says:

    I’ve spent the last few days reading the CARES Act and reading what other financial/accounting groups have to say about. I’ve finally wrapped my head around it all. Here are my thoughts:

    Pandemic Unemployment-
    Definitely will help most people, esp. if they have really included self employed/contractors. This could help keep people’s heads above water- at least for the first 4 months.

    PPL – paycheck protection loan
    Not sure this is as great as it’s made out. Very small businesses have these issues:
    Rent, utilities, vendor payables. I don’t need help with payroll, there’s only two of us – this isn’t that helpful to me. Also, what keeps a business from following all the rules, get loan forgiveness on some of it and then 2 months later layoff some of those employees?

    1. Max. loan amount is 2.5 x your avg monthly payroll costs.
    2. You can only ask for ‘forgiveness’ on 8 weeks of use (payroll costs, rent, utilities). So yes, you are taking on more debt, cause chances are not all of it will be forgiven. Who wants to take on more debt at a time like this, unless you know for sure your business will pop back?
    3. This loan might work for larger small businesses. but for the small ones with little payroll it almost doesn’t make sense. If you have a line of credit, you might be better off using that.

    I did the math and I ‘might’ be able to get a $13-$14K loan and us it all up on health insurance/salary/2 months of rent & utilities, but what a mess to go through all that paperwork for that small amount. I know my business & I’m not bouncing back after 8 weeks. I expect April revenues to be $0, but we shall see.

    EIDL Loan/Grant
    Again a lot of paperwork to get this money and it needs to be paid back. You can get $10K up front pretty quick, & it doesn’t have to be paid back if you are denied the loan, but why should we all be in debt because of this?

    Also based on my personal experience with being laid off back in 2008/2010 debacle, here’s what I learned.
    1. The govt is assuming businesses will bounce back after 8 weeks this time.
    No one is bouncing back after 8 weeks – everyone will be too scared to hire, build new projects, buy new equipment, fund anything.
    2. It took over a year before any company looked at me or my DH for jobs back then – we got jobs again in late 2010/early 2011.
    I think only about 50% of people will be hired back, companies will make do with less – they always do after these types of disasters.
    3. These programs end in June 30 to July 30 time frame, I mean our govt really thinks we’ll all be back to normal in 2-3 months? That’s crazy, they should know better.

    I really think they would have been better off giving money to all small businesses/owners hurt by this. Give everyone 4 months of business/salary. I’m pretty sure that would cost less than these programs will.

    Not to mention the absolute abuse/fraud I can already see within these programs. I’ll save that for another date. But don’t be surprised in 6-10 yrs to see another financial crash from people trading these loans on the stock market., businesses not paying the loans back, etc.

    Like

    • glissmeister says:

      Good thoughts and well said.

      What struck me.. the money we are given today is money Democrats would otherwise steal just from us in the future via their typical scams of crooked grants, dirty non-profits, foreign aid racketeering and other diversion/conversion schemes pouring billions of tax dollars each year into the Democrat party, its members and their sycophants pockets.

      Better to just send money to the people needing help, look at it as sunk cost, and let it come back in the form of productivity, taxes and invigorated community liquidity increasing the spending activity that comes back as taxes and earnings and taxes and earnings ad infinitum. Preserving main street and community liquidity is extremely important to successfully working our way through the economic insult of these circumstances. The simpler the dollar dump the better, the more timely the better. The money given will find its way home to the federal coffers perhaps by 7 fold.

      Like

  18. Jeff says:

    Seems like free money. What’s the catch?

    The federal govt will pay many of my expenses for 8 weeks and I get to keep the revenue?

    Like

  19. Publius2016 says:

    This program supports US Banking system…all the disposal income has gone to the mattresses…no travel, bars, restaurants, entertainment…

    the cash is so people can eat…Event 2O1 wanted GOVERNMENT TO TAKE OVER PRODUCTION OF FOOD TRANSPORTATION ETC…

    45 has put PRIVATE INDUSTRY on front lines…people get the money based on income…

    Like

  20. ezgoer says:

    So why are so many businesses firing their employees? That means they will have to repay the govt loan. Doesn’t seem to be stopping them from shedding workers. A museum in CT today laid off 199 employees.

    Like

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