Federal Legislation CARES ACT has Passed
The Coronavirus Aid, Relief, and Economic Security (CARES) Act, is officially passed and was minimally changed in the U.S. House before its passage this morning. You can review the revised summary of the CARES ACT by the U.S. Chamber of Commerce here
The most significant support for small businesses is the Paycheck Protection Program (PPP). We were on a call today with U.S. Chamber officials who informed us that these funds will be distributed by “designated lenders” from the Treasury Secretary. Those banks and other financial institutions who are already designed as “7A” lenders will automatically be considered lenders while others will be added. Once the process is in place they are looking at a very short turn-around for small businesses to receive the loan; i.e. the goal is that you apply and receive funds in same day. These are 10-year loans at 4% interest that offer 8-weeks of payroll forgiven as part of this program.
The NACC is in the process of scheduling a web-based educational program next week so Members can learn from the U.S. Chamber of Commerce directly the many aspects of these two trillion-dollar support packages.
Illinois Hospitality Emergency Grant Program
Application Deadline is April 1st at 5:00 pm
As we reported earlier this week, the Illinois Department of Commerce and Economic Opportunity has launched the Hospitality Emergency Grant Program to support working capital, such as payroll and rent, job training, re-training, and technology to support shifts in operations like increased pick-up and delivery services. Bars and restaurants that generated between $500K and $1M in revenue in 2019 are eligible for up to $25,000, and bars and restaurants that generated less than $500K in revenue in 2019 are eligible for up to $10,000. Hotels that generated less than $8M in revenue in 2019 are eligible for up to $50,000. As we understand, the grants will be selected by lottery and home share companies will not be eligible.
How to Apply:
- Hospitality Emergency Grant Program Overview Page: https://us.accion.org/news/covid-19-hospitality-business-grant-program/
- Hospitality Emergency Grant Program Application: https://www.surveymonkey.com/r/ilgrant
Information on the Illinois State Treasurer’s Office Small Business COVID-19 Relief Program
We had the opportunity to listen in on a call today orchestrated by the Illinois Chamber of Commerce to learn more about the Small Business COVID-19 Relief Program. The program is an impact investment loan program under which the State Treasurer would make up to $250 million in deposits available to financial institutions throughout the state, at near-zero rates, to assist Illinois small business and non-profits negatively affected by the COVID-19 pandemic. Banks and credit unions will apply to be partners in offering these loans to local businesses. While the funds will be offered to these financial institutions at near-zero rates, each bank can set its own interest rate and loan terms. However, the maximum a financial institution can charge is most financial institutions will be allowed to charge for interest on these loans are 4 ¾ % interest.
These funds are designed in part to provide bridge funding until more extensive funding can be secured through other resources – such as the PPP or CARES Act discussed above. Once community bank and credit union partners are identified, they are anticipating a 3-day turn around to receive your funds. We recommend that you contact your local bank or credit union. We were told that by Tuesday, March 31st the State Treasurer’s office will have a list of financial institutions that are offering this loan on their website. These funds are for small businesses and non-profits to provide bridge funding, pay fixed debts, payroll, accounts payable and other bills.
Stay tuned for daily updates and do not hesitate to reach out for additional details or resources about the information provided in today’s brief.
Reba Osborne, Director of Government Affairs