The forced indefinite closure of many small businesses throughout the nation has caused many owners uncertainty about their ability to retain employees and successfully reopen following the COVID-19 pandemic. The Keeping American Workers Paid and Employed Act, which was passed on March 27, provides emergency funds to qualifying businesses with a maximum of 500 employees.
What Is the Keeping American Workers Paid and Employed Act?
The Keeping American Workers Paid and Employed Act is a $377 billion package of grants and loans intended to help keep small businesses across the nation functional during and after the COVID-19 pandemic. The Paycheck Protection Program, the largest section of the act, provides small businesses with loans that are to be used to continue paying employees while businesses are closed. These loans may be obtained immediately through over 800 SBA-certified banks and credit unions. Other aspects of the act include:
- Entrepreneurial assistance.
- Emergency EIDL grants.
- Small business debt relief.
Paycheck Protection Program
Under the Keeping American Workers Paid and Employed Act, the Paycheck Protection Program will provide loans to qualifying small businesses. The amount can be as great as 250 percent of the business’s total monthly payroll. It provides temporary funds to cover employees’ salaries, tips, and benefits. In doing so, the act hopes to minimize the financial difficulties that both employees and the small business will face in the coming months.
Other Elements of the Keeping American Workers Paid and Employed Act
The act also includes several billion dollars in funds that may be used to grant immediate relief to qualifying businesses. This section allows for:
- Up to $10,000 through the EIDL program.
- The provision of counseling, training, and other services to struggling businesses.
- The provision of sick leave.
- Easier access to other loan programs.
Many small businesses will need to adjust how they handle their finances in the coming weeks and months in order to successfully reopen and stay open. However, the emergency funds provided by the Keeping American Workers Paid and Employed Act make it easier to pay bills and employees. By keeping employees paid throughout the pandemic, businesses keep their employees’ financial struggles to a minimum and increase their likelihood of returning instead of searching for new positions.