$367 billion federal loan program leads business relief efforts

Since mid-March, when it became abundantly clear that efforts to stem the spread of the coronavirus would cause major losses for businesses in central Massachusetts and result in widespread layoffs, governments and industry officials have offered relief efforts, large and small, to soften the blow to the economy.

The first significant effort came on Monday, March 16, when Governor Charlie Baker announced that the quasi-governmental agency Massachusetts Growth Capital Corp. would provide loans of up to $75,000 to small businesses. The MGCC received $10 million to fund these efforts, and the agency had to close the application process after three days because it was overwhelmed with applications and it was clear that the federal government would soon provide much more substantial relief.

This took the form of the Coronavirus Aid, Relief, and Economic Security Act, a $2 trillion effort to prop up the economy for a few months while everyone adjusts to the new reality. Among the CARES Act provisions on direct payments to U.S. residents, expanding unemployment benefits and bailing out airlines is a $367 billion small business relief effort designed to encourage businesses of 500 employees or less to maintain their payroll and avoid layoffs.

According to the Senate version of the bill, this $367 billion effort is largely managed by the US Small Business Administration and local banks, providing loans of up to $10 million to small businesses to cover expenses such as payroll, health costs and pre-existing expenses. debt payments from March 1 to June 30.

Some of those loans are also forgivable if companies meet certain conditions, including avoiding layoffs and keeping their payroll roughly equal to what it was before the coronavirus pandemic.

These CARES Act provisions were in the bill passed by the US Senate just before midnight on March 25. The measure had yet to pass the House of Representatives at WBJ press time, but House leaders had indicated they would approve the effort before sending it to President Donald Trump for signature.

Other Efforts

While the federal stimulus provides the most potential money for businesses in central Massachusetts, other efforts have been made to help businesses and nonprofits survive the impact of the pandemic.

The North-Central Massachusetts Chamber of Commerce is providing emergency loans of up to $20,000 to small businesses negatively impacted by the coronavirus.

The City of Worcester is making $10,000 grants available to businesses in the city, for total assistance of up to $500,000.

In addition to the provisions of the CARES Act, the SBA is offering low-interest federal disaster loans for working capital to small businesses in central Massachusetts experiencing significant economic harm due to the coronavirus.

The Worcester Regional Chamber of Commerce has decided to extend its services to all businesses in the region, regardless of ownership.

Massachusetts announced tax relief efforts, deferring the collection of regular sales tax, meal tax and room occupancy taxes due in March, April and May. Instead, they will be due on June 20. All penalties and interest that would otherwise apply will be waived.

WBJ News editor Grant Welker contributed to this report.