CARES Act Economic Relief Plan Goes to the White House

By: Pat Gouhin, Chief Executive Officer

The U.S. House of Representative has just passed the historic $2.2 trillion dollar COVID-19 emergency relief bill, the Coronavirus Aid, Relief, and Economic Security (CARES) Act to speed recovery across the U.S. economy.  These funds will be distributed to individuals, businesses and states in response to the coronavirus pandemic under H.R. 748. 

Snapshot of the CARES Act:

  • $500 billion for loans and assistance to companies and state and local governments, including $29 billion for loans to U.S. airlines and related businesses.
  • Emergency grants and a forgivable loan program for companies with 500 or fewer employees along with modifications to rules for expenses and deductions intended to make it easier for companies to stay open in the short-term and retain employees.
  • $349 billion in low-interest small business loans that could be partially forgiven
  • Payments of as much as $1,200 for individual taxpayers, and $500 per child, phased out when incomes exceed $75,000 for individuals and $150,000 for couples filing jointly.
  • An additional $600 per week for those receiving unemployment benefits.
  • $150 billion for aid to state, local, and tribal governments.
  • A suspension of Medicare sequestration through the end of the year and the extension of several health programs until December.
  • Businesses controlled by the president, vice president, members of Congress and heads of executive departments from receiving loans under the Treasury Department programs.
  • The bill also provides about $342 billion in emergency supplemental funding, including $100 billion for hospitals.

What does this mean for angels and their portfolio companies?  Chairwoman Velázquez of the House Small Business Committee has created The Small Business Owner’s Guide to the CARES Act for more detailed information about programs and initiatives that will soon be available, as well as additional tax provisions. 

Read the full text of the Coronavirus Aid, Relief, and Economic Security (CARES) Act here.