04/06/2020 – Daily update from NAW Government Relations Team
Update on COVID-4 Small Business Lending Program:
Today, the Federal Reserve announced it will establish a facility to provide term financing backed by Payroll Protection Program loans. Basically, in a bid to free up banks’ balance sheets to make more payroll protection loans, the Federal Reserve will buy those loans, which are already insured by the Small Business Association (SBA).
The Wall Street Journal reports, “the move would establish a secondary market for loans guaranteed by the SBA’s Payroll Protection Program, part of a $2.2 trillion economic relief package President Trump signed last month to help individuals and businesses affected by the coronavirus pandemic.” While we haven’t seen it explicitly stated, it appears that this new Fed initiative is the implementation of the “Main Street Lending Program” the CARES Act authorized them to create.
As we reported on Saturday the PPP program got off to a rocky start and has endured a certain amount of criticism due to confusion regarding the package. Reports today are that the program is working much more smoothly and loans are being processed much more efficiently. And notably, both U.S. Treasury Secretary Mnuchin and President Trump have stated that, if necessary, more money will be requested from Congress when the initial $349 billion runs out.
According to the two-sentence statement the Federal Reserve released this afternoon, they will be issuing additional details later this week. We will of course keep you advised as more clarity becomes available on these programs.
Click here to read the Wall Street Journal story on today’s Fed announcement.
A sometimes-overlooked relief provision in the CARE Act is one which provides automatic payroll tax relief to companies. This Employee Retention Credit can provide up to $5,000 per employee in credits to the employer. No approval is necessary and the estimated refundable portion of the credit can be advanced. It is available to companies of all sizes which qualify.
Click here to read NAW’s Legal Advisory on this program.
NAW / ITR Economics Webinar with Alan Beaulieu
“Distribution Industry: Navigating the Crisis” • April 9, 2020 • 3:00 PM EDT
Seats are limited — Purchase your seat today at:
Jade West, Chief Government Relations Officer
Blake Adami, Vice President-Government Relations
Seth Waugh, Associate Vice President-Government Relations
National Association of Wholesaler-Distributors
The above information and links to other information has been prepared by NAW for the general information of NAW members. It is not intended to, and does not, provide tax, legal or professional advice concerning any specific matter. You should not act on the information without first obtaining professional advice and counsel.