A three-phased approach to emergency spending is necessary to combat the virus, slow its spread and support both families and businesses affected.
During these uncertain times, the Orlando Economic Partnership’s top priority is to keep the business community informed and prepared. This is the next installment in our series of articles designed to help the Orlando region understand what is happening to our community and economy. Our goal is to be a one-stop-shop to answer the question, “what does this mean?”
Our lines of communication are open, and we are engaged in the need to seriously and truthfully confront the facts. If you have another way to help, we want to hear from you. Please email BusinessHelp@orlando.org to share a solution or provide context on some of the many issues we seek to address.
Federal Stimulus and Support for Small Businesses
As the full extent of COVID-19’s impact on both well-being and the economy became evident, a bipartisan federal emergency funding package came together with remarkable speed. After passing the House hours after it was introduced and cleared by the Senate less than 24-hours later, President Donald Trump signed the $8.3 billion emergency spending bill on March 6 to support federal agencies and states in combating the rising number of coronavirus cases in the U.S.
The legislation bolstered vaccine development, research and equipment stockpiles and boosted state and local health budgets, including $400 million disbursed to states within the first 30 days of the bill’s enactment, with each state receiving no less than $4 million.
This was the first phase of a three-phased approach necessary to combat the virus, slow its spread and support both families and businesses affected.
Phase Two Stimulus
On March 18, the president signed the House-originated bill H.R. 6201 – “The Families First Coronavirus Act” – into law after it received swift Senate approval. The bill is commonly referred to as “Phase Two” of the stimulus package on the Hill and includes provisions related to health care, nutrition and emergency leave provisions, an element which proved controversial.
The sticking point was over the best way for benefits to be administrated without harming both small and large businesses, while still supporting those adversely impacted by COVID-19. Following extensive legislative debate, the bill made it to the president’s desk through a collaborative effort by the House, Senate and White House Administration, with leadership from the Treasury Department.
Phase Three Stimulus
The Senate is diligently working on a complimentary bill (commonly referred to as “Phase Three”) to the House’s Phase Two. The Phase Three bill is the proposed $1 trillion stimulus package that will provide large amounts of funding for programs to help curb an entire economic shutdown and help American households financially survive this next month. It will need to pass through both the Senate and House before being sent to the president for his signature.
While the bill focuses on funding to support the hard-hit airline and cruise industries, the most-talked-about provision includes two phases of funding for need-based direct payments to Americans. Payments will likely be modeled after the stimulus checks former President George W. Bush sent out in 2008 during the financial crisis, with the IRS issuing the first of two rounds of payments starting April 6, according to the Treasury proposal. This provision will be heavily debated in both chambers and has the support of President Trump.
The Phase Three bill also includes an estimated $300 billion in funding through the Small Business Administration that will be allocated to small businesses thanks to the leadership of our own Florida Senator Marco Rubio, Chairman of the Senate Committee on Small Business and Entrepreneurship.
The “COVID-19 RELIEF for Small Businesses Act of 2020” would immediately open up the Small Business Administration’s (SBA) 7(a) loan program, offered by banks nationwide, to provide near-term relief to America’s small businesses that face payroll and operational challenges due to economic effects from the coronavirus pandemic. This portion of the bill is aimed to protect employee retention for the small business sector and to avoid the expected layoffs to come. In addition, this bill plans to cover all payments on SBA-backed loans for six months, create a new grant program for the small businesses hardest hit by this crisis, and offering direct SBA, zero interest, long-term forgivable loans of up to $2.5 million. More details on the Chairman’s bill can be found here.
Currently, Florida small business owners that experience economic damage as a result of COVID-19 can seek support by applying for the Florida Small Business Emergency Bridge Loan Program. These short-term, interest-free working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance. More information on Bridge Loans can be found here.
The Phase Three bill is expected to return to the House for approval before being sent to President Trump’s desk for his signature. From there, implementation steps would begin rapidly in order to ensure the economic viability of our country is protected.
Keeping an eye on policy developments.
The Partnership is monitoring these actions closely, with a keen eye on the potential impacts to our investors. We will continue to monitor our federal COVID-19 policy action timeline as things progress in Washington D.C.
The Partnership is also actively collaborating with law firms to share analysis of every government action that affects businesses, from the emergency declaration acts to the approval of the Families First Coronavirus Response Act and expected relief from the Treasury Department. In addition, the Partnership is working with accounting firms to share relevant information about the financial impact and analysis of these changes for businesses of every size.
Orlando is a resilient community and we have faced many challenges in the past. By uniting against COVID-19, we can flatten the curve of cases in our community and avoid the devastating consequences that come with loss of life and livelihood. For detailed information and resources for your business’ response to COVID-19, please visit Online Business Resource Center at Orlando.org/covid19