Federal Stimulus Bill + What it Means to Businesses

With the Saratoga County Prosperity Partnership taking the lead, the six Saratoga County based economic development related organizations had an opportunity to hold a virtual meeting with US Congresswoman Elise Stefanik on Wednesday, March 25, in advance of the Federal Government passing a Federal Stimulus package to combat the economic impact of Coronavirus (COVID-19). The focus of this meeting was to learn details of the Federal Stimulus package and how our business community can best prepare to apply for federal relief.
The key take away from this call is that the Federal government will be supercharging the SBA’s 7A Loan program in addition to the SBA’s Disaster Recovery Loan program. The 7A program will be managed by local SBA lender banks . So the advice to local businesses and nonprofits is to compile all of your financial documents as you would to secure any loan. You might also make contact with your commercial lender simply to ask them to share with you any information they get as they receive it. Please note that it will take a few days for the SBA to provide all required information to SBA lender banks about the 7A program AFTER it is signed into law. They DON’T have ANY information at this time.
The way the legislation is structured 7A loans will be eligible to “forgive” costs associated with payroll, utilities, mortgages, rents, and debt payments . There will be a cap on the amount that can be forgiven but that is not yet known. This means these 7A loans are more like grants and are designed to allow employers to retain employees.
The 7A program will be for businesses and nonprofits with less than 500 employees and does cover self-employed or sole proprietors adversely impacted by COVID 19. The fees for the 7A program will be waived. If you own multiple businesses, you will have to apply for each business separately.
Resources Discussed in the call

MEDIA COVERAGE

Stefanik, SBA Take Questions From Business Community On Stimulus
WAMC NEWS, March 25, 2020

Members of the business community in Saratoga County got an update on the $2 trillion federal stimulus bill today from Congresswoman Elise Stefanik and the Small Business Administration.

The conference call Wednesday was organized by the Saratoga County Prosperity Partnership. With business representatives and the county’s state legislators on the line, SCPP President Shelby Schneider gave early results of a poll of local businesses, offering a brief snapshot of the local economy.

Schneider said more than 230 businesses responded to the survey, conducted as the COVID-19 virus spreads in New York.

“Fifty-nine percent of the business reported that they’re at risk of closing and they’re concerned about how to retain and pay workforce they still have. Forty-one percent of those surveyed say they have already had to lay off their workforce. A majority of businesses say that they need working capital now,” said Schneider.

Republican Congresswoman Elise Stefanik, whose 21st district covers a portion of Saratoga County, was on the call to detail the $2 trillion federal stimulus bill now working its way through Congress. Saying she supports the bill in its current form, Stefanik went through the numbers.

“Specifically, the bill provides $130 billion for hospitals, $150 billion for state and local governments, $350 billion for small businesses that will be in form of SBA low interest loans – much of which will be forgiven if it’s used for payroll, utilities, mortgage or rent – four months of unemployment insurance, and direct payments of $1,200 per adult,” said Stefanik.

Regional Administrator for the Small Business Administration Steve Bulger answered questions about the SBA loans available to businesses. He acknowledged the difficulty small businesses may have experienced in trying to contact the agency about emergency funding.

“We’ve been overwhelmed. Literally, hundreds of thousands of people are applying and calling. We are partnering as we speak with several of the largest technology companies in the country over the coming days. So that is we’re turning to the private sector to boost us,” said Bulger.

Bulger asked those applying for SBA loans to start working on paperwork now. He said guidance is available on the agency’s website.

“Before you apply, you can get a checklist of what documentation you’re going to need – tax returns, financial information, etc.,” said Bulger.

Stefanik said independent contractors, sole proprietors, and non-profits will be eligible for the SBA loans included in the stimulus package.

Stefanik was asked about the area’s farming economy, and how to ensure that enough migrant workers are on hand to support the industry in a time of border restrictions related to the pandemic.  She pledged her support.

“We’re going to work directly with the Secretary of the Agriculture and the Secretary of Homeland Security on this because we absolutely need to make sure that our ag workforce is here and available to get us through this challenging time. And also this highlights the need for overall visa form to finally fix that program, which I have long advocated for,” said Stefanik.

State officials on the call included Senators Jim Tedisco and Daphne Jordan and Assemblymembers Mary Beth Walsh, Carrie Woerner, and Dan Stec. Each shared their own ideas as state government officials seek ways to cut red tape to bring relief and benefits to small businsseses and the newly unemployed.

Last week, Governor Andrew Cuomo through executive order waived a seven-day waiting period for benefits. However, the lawmakers on the call said the state has a surge of applicant seeking unemployment insurance benefits, making it difficult to manage.

As an additional step, Assemblyman Stec said he wants leaders to consider removing a tax on benefits received.

“We still tax unemployment – and I think people would think that that’s an odd thing to tax just generally – but it might be something that in the short-term, as a temporary fix, we could waive the 10 percent federal tax and the 2.5 percent state tax on unemployment benefits just to put a little more money in people’s pockets. And I’d like to look at making self-employed people eligible. They’re currently not eligible. And again just temporarily as we get through the pandemic,” said Stec.

Several of the legislators on the call said businesses are experiencing difficulty obtaining business interruption insurance coverage related to the pandemic. Senator Tedisco said government interference is typically covered.

“But what’s been happening, and this is a question that we’re getting right now, is that the insurance companies are saying to the small businesses, ‘Well, yeah, it was government-closed, but it was because of the pandemic. So we’re not going to be covering the closure in many instances.’ So that’s something we, I think have to deal with and grapple with, also, those questions as we’re doing the budget. And may be something the Attorney General has to weigh in on for our small businesses.”

Several bills have been introduced in both houses of the New York State legislature to provide relief during the COVID-19 crisis.