Treasury Secretary Steven Mnuchin said Friday the small business relief included in the massive $2 trillion coronavirus stimulus package could keep 50 percent of Americans at work.
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A key piece of the largest relief bill in recent memory is the more than $370 billion in funding for small businesses. Businesses with fewer than 500 employees are eligible for up to $10 million in loans, which can be used for payroll and other expenses, like insurance premiums, mortgages, rent or utilities.
The government will pay off the loan balance so long as the companies either do not lay off workers or rehire ones they’ve already let go.
"As long as you hire those people, your loan will be forgiven," Mnuchin said. "This keeps 50 percent of American workers at work."
Once businesses receive the loans, they'll have two months to use the money to avoid repaying it.
The banks lending the money would be reimbursed by the Treasury Department, which is receiving $377 billion to fund the program. The program does come with some restrictions. Businesses that have recently laid off workers would be required to repay a larger portion of their loans, and loans covering salaries of more than $100,000 a year wouldn't qualify for forgiveness. Businesses would not have to repay loans covering up to eight weeks' worth of payroll costs.
"This is not the fault of the American public, and we want to get all of those people paid," Mnuchin said. "This is a Herculean effort that people will go into banks next Friday and be able to get loans. It's going to be a very simple process."
The stimulus package, which is awaiting approval by the House of Representatives, is the latest effort by the federal government to stop the unprecedented obliteration of small businesses in the country, as the coronavirus pandemic forces more than 150 million Americans to stay at home and requires bars, restaurants, entertainment venues and other businesses deemed nonessential to close their doors.
The shutdown of a large swath of the economy pushed the number of Americans filing for unemployment to a historical high. On Thursday, the Labor Department said that jobless claims from the period between March 14 to March 21 surged to 3.28 million, shattering the previous record of 695,000 set in 1982.
That's well above the levels seen during the worst of the Great Recession, and economists have warned the number will likely continue to rise in the coming weeks.