In a conference call with his congressional colleagues Wednesday, Rep. Bill Keating (D) urged small businesses in Massachusetts to seek relief via the federal Coronavirus Aid, Relief, and Economic Security Act as quickly as possible — warning that applications for much of the available funding will processed in the order in which they’re received.
“When it comes to the small-business money, much of that’s going to be done on a first-come, first-served basis,” Keating said.
“We’re getting reports that some investment-banking groups and other groups…are actually giving technical assistance. and organizing Silicon Valley and other regions,” Keating added. “And that gives them an advantage of getting quickly through their applications.
'So it’s really important to get the word out to the small businesses, in our region and our state, to start doing that quickly.”
The CARES Act includes $349 billion for the so-called Paycheck Protection Program, which allows eligible business to borrow up to $10 million — some of which can be forgiven — through the U.S. Small Business Administration. Applications are available here.
Small businesses impacted by the coronavirus crisis can also benefit from other provisions in the CARES Act, including COVID-19 Economic Injury Disaster Loans and grants of up to $10,000.
But Rep. Stephen Lynch (D) cautioned that it may take some time for the Massachusetts office of the Small Business Administration to process new requests.
“They do a great job under normal circumstances, but obviously, their book of business has gone from $24 billion to $340 billion,” Lynch said. “So they’ve got some catching up to do.”
The CARES Act, which President Trump signed into law on March 27, is a massive piece of legislation. It’s nearly 900 pages long, and provides more than $2 trillion to mitigate the economic devastation being wrought by the ongoing COVID-19 epidemic, making it the largest single emergency-spending measure in US history.
Assessing the overall impact of the CARES Act on Massachusetts is difficult. The law contains multiple funding streams, and those pools of money will be disbursed in different ways. In some cases, long-established federal formulas will drive distribution; in others, competitive contracting or grant-making processes will be used to determine who gets what.
However, financial effect of one piece of the law is fairly straightforward. The CARES Act establishes a $150 billion Coronavirus Relief Fund to help individual states, with that money to be allocated on the basis of population. Multiple estimates say Massachusetts will receive $2.673 billion, with at least $1.47 billion going to the state and no more than $1.203 billion going to cities and towns.
When other funding streams in the CARES Act are factored in, Congresswoman Lori Trahan (D) said Wednesday, the benefit to Massachusetts will be significantly higher.
“If you just take some of the money that we already know to be coming based on formula, whether that’s transit funds, [Housing and Urban Development] Emergency Solution grants, the Child Care and Development block grants, the [Low Income Home Energy Assistance Program]…it’s over $3.8 billion,” Trahan said.
Massachusetts residents will also benefit from direct payments to individuals and families. Individuals with adjusted gross incomes of up to $75000 will receive $1200, and couples earning up to $150000 will receive $2400, with an additional $500 for each child.
Those credits will be reduced at higher income levels, with benefits disappearing when individual income reaches $99,000, couples’ income reaches $198,000, and a couple with two children’s income reaches $218,000. Only individuals with Social Security numbers are eligible for these payments. Undocumented immigrants who use Individual Tax Identification Numbers are not.
Congresswoman Katherine Clark (D) said she hopes that money will be sent to recipients or automatically deposited in their accounts beginning on April 6, but isn’t certain of that date.
“We are waiting to hear from the administration on their ability to meet that timeline, but that is our hope,” she said.
Massachusetts residents will also benefit from the CARES Act's interest-free suspension of federal student-loan payments, as well as its expansion of unemployment eligibility and compensation.
Because unemployment benefits are administered by the states, though, recipients in Massachusetts and elsewhere may face a delay in receiving payments under the new law.
Last week, Governor Charlie Baker said that retrofitting Massachusetts unemployment system to include self-employed individuals who haven’t previously paid into the state’s unemployment fund requires the creation of a an “alternative universe.”
Wednesday’s call also included several references to the possibility of additional legislation aimed at blunting the coronavirus’s economic impact.
“We’re going to do whatever we need to do to help the American people get through this,” Congressman Jim McGovern (D) said.
“We have no idea how long it’s going to last, and…we don’t know when the measures we’re now taking can be relaxed. So we need to be clear headed about the fact that there’s going to be more that we need to do.”