Senator Elizabeth Warren joined Mayor Martin Walsh in a Thursday afternoon Zoom conference session with more than 1,000 local business owners, in which Warren explained the details of a federal emergency aide package in response to the COVID-19 pandemic.
“One of the key things about this bill is it reflects an understanding in Washington about the importance of small businesses in dealing with this crisis and also promoting a recovery and coming out on the other side,” said Warren. “There are a lot of provisions designed to help small businesses.”
Sen. Warren said the package was broken into two major components. The first is a $10 billion emergency grant fund through the Small Business Administration (SBA) that would permit an advance of $10,000 to small businesses and non-profits that apply for Economic Injury Disaster Loans (EIDL.)
“The goal is to have that $10,000 advance delivered within 3 days of application,” said Warren. “We’re looking for quick turnaround.”
She explained that the grant would not have to be repaid and could be used by applicants to provide paid sick leave for workers, continue payroll, make increases in production costs, or to pay business obligations.
Funds would be made available to small businesses, non-profits, independent contractors, co-ops, and employee-owned businesses; and could be doled out by banks.
“Through this act, the Treasury is making most banks authorized SBA lenders,” said Warren. “The stimulus also includes $17 billion in funding for a provision to provide immediate relief for small businesses.”
Warren said that the SBA will cover all loan payments for those who take out a loan in the first 6 months after the president signs the bill — providing he does sign it. The emergency aide package also includes a permanent measure that allows the SBA to waive fees for veterans and their spouses.
The second major component of the legislation, Warren said, is its $350 billion in funding that would provide small businesses with no fee loans up to $10 million.
“This covers 125 percent of payroll over eight weeks and would be administered directly by banks,” said Warren.
The amount of loan would be determined by payroll costs before the crisis.
“The idea is to try to get help to all kinds of small businesses,” Warren added. “We hope that this money will help provide small businesses a cushion during the crisis, and help them survive and allow for a stronger recovery.”
She noted that the package would also greatly expand unemployment insurance, removing constraints at the federal level.
“This expands who is eligible to cover for-profit workers, nonprofit workers, part time workers, gig workers, those who are self-employed...it’s designed to cover pretty much everyone who was working when the crisis hit,” Warren explained.
The expansion would also add more money to the federal unemployment program, yielding an additional $600 on top of state unemployment payments. Warren said that in Mass, that would amount to a 100 percent income replacement for the average worker. She noted that there will be an additional $450 billion set aside for loans for large corporations.
“We tried to get as much oversight into that part of the package as possible, and I will be exercising as much oversight as possible over how this money gets spent,” said Warren.
Warren said that the House will vote tomorrow on the Senate bill.
“We anticipate the House will accept the bill as it is, and we expect that the president will sign it tomorrow night or perhaps early on Friday,” she said. “The challenge over the next few weeks will be to make these programs operational.”
Mayor Walsh thanked Sen. Warren for her leadership and said that the package would help the city immensely.
“This crisis is showing us how much our city and economy depends on each and every one of you,” said Mayor Walsh. “We hope this package will be helpful to not just you as businesses but to your workers as well.”
Walsh took a moment to reinforce that the City is still not allowing construction, although Gov. Baker has pushed to keep construction moving.
“Construction is still not allowed in the city of Boston,” he said.
He added that the city will continue to work in support of small businesses while federal legislation is underway, saying: “ This legislation is going to take a couple weeks, but we are going to work with small businesses in the city. You are our bread and butter, you are our neighborhoods and our communities.”
“City Hall is working hard to make sure that you all survive through this,” said Walsh, “For those of us that are struggling I just want to share that I learned to live my life a day at a time through recovery. If you can just try to take each day at a time, we'll get through this together.”