The world is currently under attack by a deadly pandemic known as the COVID-19 pandemic. This disease has altered the world’s normal operations as people no longer gather in crowds, schools have been closed, and operating a business physically is next to impossible. As of March 2020, the United States Senate passed a two trillion coronavirus rescue package. This money aims to transform the United States government by placing thousands of United States businesses and millions of workers on funded life support.
Workers who are still in the government payroll have a higher advantage because the government will pay for their wages in full. In addition to that, the Coronavirus has led to thousands of people losing their jobs and staying at home. This is very challenging, especially if the person who has lost his job is the family’s breadwinner. This means that life will change for the worse for the affected families unless they get help. The good news is that the rescue package aims at sustaining workers who have lost their jobs with larger checks than what they were earning before misfortune of lay off struck them.
Government assistance will come in different ways. Some of the ways include paying directly to businesses and individuals.
Government assistance will come in different ways. Some of the ways include paying directly to businesses and individuals. However, as much as the government helps businesses, there are also limits to executive pay and provisions. The provisions require the companies receiving assistance to maintain their employment levels to about ninety percent of the original number they were before the virus.
Midsized companies, consisting of about 500 to 10,000 employees, are allowed to borrow an interest rate that is not more than 2 percent every year. Moreover, these types of companies are exempted from repaying the principal or the interest for six months. However, the exemption from paying principal and interest has its consequences to a business. The mid-sized companies can no longer outsource jobs from the start of the loan, until two years when the loan will have been repaid in full.
Small companies, on the other hand, consisting of 500 employees or less, are guaranteed direct loans from the bank. This loan is expected to cover more than two months of the company’s payroll and other operating expenses. In addition to that, if the government is paying off the balance, it expects the company not to lay off its current workers or to rehire the workers they already leg go off. This is because laying off their workers means that many people will lose their jobs during these tough times, which may negatively affect the economy.
Economic Injury Disaster Loan (EIDL) Loan Advance
This is a loan advance option to businesses that provide businesses with up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties. In response to the coronavirus pandemic, small businesses in the United States are able to apply for loan amounts of up to $10,000. Businesses who have lost their revenue due to the pandemic benefit most from this program.
SBA Debt Relief
Small Business Administration (SBA) is also providing financial relief to businesses that have been affected by the COVID pandemic. The SBA pays for six months of principal interest and any other fee that the borrower owes. Various health workers and government officials are trying so hard to maintain the security and the safety of all the American citizens. SBA is also encouraged to do its part by keeping all the employees and customers safe from the adverse effects of the pandemic. Small businesses are facing economic disruption due to the COVID 19 pandemic. After the president signed the CARES Act into law, $376 billion was provided in relied on small businesses and the American workers.
Paycheck Protection Program
This type of relief program provides businesses with loan forgiveness for retaining employees by temporarily expanding the SBA loan program. It provides a direct motivation for all the small businesses to help keep all the workers in the payroll by providing each of the small businesses with a loan of up to ten million dollars specifically for payroll and other expenses. After the president had signed the program’s extension legislation, the Paycheck Protection Program recommenced accepting applications as of July 6, 2020, at 9 am. The deadline for applying for this program is August 8, 2020.
Express Bridge Loan Pilot Program
This type of government relief program allows small businesses who have a business relationship with SBA express lenders to have access to loans up to $25,000 with minimal paperwork. This is because the program allows the SBA Express lenders authority to give guaranteed financing when an emergency occurs and in relation to the disaster purposes. This is important for small businesses as they will get instant loans while they wait up for long-term financing.
Consequently, various states and cities are receiving different kinds of relief programs from the government of the United States of America. For instance, In New York City, no interest is required on loans of up to $75,000 for businesses with less than one hundred employees. This is a huge relief for businesses and employees as they get to keep their jobs and have access to loans. In addition to that, about forty percent of all the payroll costs are covered for businesses with less than five employees.
In conclusion, since the outbreak of the Coronavirus, many businesses and employees have been affected. Most businesses have been forced to lay off some of their employees because they are no longer in a position to accommodate them. This is because the sales have gone drastically low, and instead of making profits, the business is making losses. Employees, on the other hand, have been on the receiving end and have resulted in many people losing their jobs. The government has come up with relief programs to help bring businesses back to life and give employees their life back by providing business loans and catering for all the payroll needs of the employees.