Dispatch #27 - Updates on the Different Stimulus Programs
Just weeks after the CARES Act was signed into law, individuals and businesses are starting to receive the funds.
Below are various stimulus program updates courtesy of Steve Roth with the Northern California Small Business Development Center (SBDC):
Stimulus checks
These have started to go out this week and will continue over the next 4 to 5 weeks before the program is completed. The IRS/Treasury will use your 2019 tax returns for the calculation if you have filed them or, if not, they will use your 2018 returns. The maximum payment per individual is $1,200 and ends at an Adjusted Gross Income of $75,000 or $150,000 for a married couple filing jointly. I know several clients and people who have received their IRS/Treasury checks so far this week.
Unemployment Insurance
For those who qualify for unemployment the maximum CA weekly payment rate, tables are online. This is increased by the Federal $600 per week. The Federal part of the program lasts for 26 weeks. Hopefully, this will be nothing but a bad memory by then.
Payroll Protection Program (PPP)
After a very rocky start literally millions of applications for PPP funding have been filed. The good news is that several clients have either received their PPP loans this week, cash in the bank, or an email form their bank/lender letting them know they have been approved, for what amount and when the ACH will take place.
While each bank/lender is doing something slightly different, the distributed nature of the PPP program means it will generate results/loans faster than the EIDL program. The PPP loans will accelerate this week and for the next 2 to 3 weeks thereafter. However, there is no way to check on where you are in the process given the backlog of loan applications at the banks/lenders.
Economic Impact Disaster Loan (EIDL)
The EIDL program is also off to a slow start with literally a million loan requests funneling into one location, the SBA, which has been working as fast as possible to process the loans and get funds into the economy. The bad news is that this has been slow, but the good news is that the first of the Emergency Advances have begun to go out. Several clients have received their EIDL Advances this week and the program will accelerate over the next 3 to 4 weeks.
EIDL has gone through several changes over the last month but, as of the afternoon of Monday, April 13th, the SBA’s goal was to get the Emergency Advances rolling, up to $15,000, and keep the program to its original $2 million maximum loan size. However, the original concept of someone from the SBA calling and talking with each loan applicant will transition into a formula based loan which will be a function of sales and expenses. The exact formula is still being determined. The goal is to get these larger loans out in the next 3 to 5 weeks.
EIDL loan applicants will be informed of things through emails as there is no one to contact given the volume of loan requests. I do believe that this will begin to gain momentum this week and then accelerate as loan amounts and policies are formulated.
Summary
Things are moving, everyone understands the need for urgency and results should become much more obvious and tangible this week. Please let me know if you have any questions.
Need help with this or other financial matters faced by construction contractors? Let’s talk!
David Stern CFO makes every effort to provide useful and accurate information. This content, however, is not intended as a substitute for specific business-related financial advice. We disclaim all warranties and liabilities from its use.