Tag: US Treasury

US Treasury | Coronavirus State and Local Fiscal Recovery Funds to Deliver $350 Billion

From the US Treasury on May 10, 2021

Aid to state, local, territorial, and Tribal governments will help bring back jobs, address pandemic’s economic fallout, and lay the foundation for a strong, equitable recovery 

 

WASHINGTON — Today, the U.S. Department of the Treasury announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act of 2021, to provide $350 billion in emergency funding for state, local, territorial, and Tribal governments.  Treasury also released details on the ways funds can be used to respond to acute pandemic-response needs, fill revenue shortfalls among state and local governments, and support the communities and populations hardest-hit by the COVID-19 crisis. Eligible state, territorial, metropolitan city, county, and Tribal governments will be able to access funding directly from the Treasury Department in the coming days to assist communities as they recover from the pandemic.

“Today is a milestone in our country’s recovery from the pandemic and its adjacent economic crisis. With this funding, communities hit hard by COVID-19 will able to return to a semblance of normalcy; they’ll be able to rehire teachers, firefighters and other essential workers – and to help small businesses reopen safely,” said Secretary Janet L. Yellen.  “There are no benefits to enduring two historic economic crises in a 13-year span, except for one: We can improve our policymaking. During the Great Recession, when cities and states were facing similar revenue shortfalls, the federal government didn’t provide enough aid to close the gap. That was an error. Insufficient relief meant that cities had to slash spending, and that austerity undermined the broader recovery. With today’s announcement, we are charting a very different – and much faster – course back to prosperity.”

While the need for services provided by state, local, territorial, and Tribal governments has increased —including setting up emergency medical facilities, standing up vaccination sites, and supporting struggling small businesses—these governments have faced significant revenue shortfalls as a result of the economic fallout from the crisis. As a result, these governments have endured unprecedented strains, forcing many to make untenable choices between laying off educators, firefighters, and other frontline workers or failing to provide services that communities rely on. Since the beginning of this crisis, state and local governments have cut over 1 million jobs.

The Coronavirus State and Local Fiscal Recovery Funds provide substantial flexibility for each jurisdiction to meet local needs—including support for households, small businesses, impacted industries, essential workers, and the communities hardest-hit by the crisis. Within the categories of eligible uses listed, recipients have broad flexibility to decide how best to use this funding to meet the needs of their communities. In addition to allowing for flexible spending up to the level of their revenue loss, recipients can use funds to:

  • Support public health expenditures, by – among other uses – funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, mental health and substance misuse treatment and certain public health and safety personnel responding to the crisis;
  • Address negative economic impacts caused by the public health emergency, including by rehiring public sector workers, providing aid to households facing food, housing or other financial insecurity, offering small business assistance, and extending support for industries hardest hit by the crisis
  • Aid the communities and populations hardest hit by the crisis, supporting an equitable recovery by addressing not only the immediate harms of the pandemic, but its exacerbation of longstanding public health, economic and educational disparities
  • Provide premium pay for essential workers, offering additional support to those who have borne and will bear the greatest health risks because of their service during the pandemic; and,
  • Invest in water, sewer, and broadband infrastructure, improving access to clean drinking water, supporting vital wastewater and stormwater infrastructure, and expanding access to broadband internet.

Insufficient federal aid and state and local austerity under similar fiscal pressures during the Great Recession and its aftermath undermined and slowed the nation’s broader recovery. The steps the Biden Administration has taken to aid state, local, territorial, and Tribal governments will create jobs and help fuel a strong recovery. And support for communities hardest-hit by this crisis can help undo racial inequities and other disparities that have held too many places back for too long.

For an overview of the Coronavirus State and Local Fiscal Recovery Funds program including an expanded use of eligible uses, see the fact sheet released today. Find additional details on the state, local, territorial, and Tribal government allocations on the Coronavirus State and Local Fiscal Recovery Funds Webpage.

 

Fed expands Main Street Lending Program

On June 8, the U.S. Federal Reserve expanded its Main Street Lending Program to allow more small businesses to receive financial support. The Main Street Lending Program (MSLP) was established by the Federal Reserve and the U.S. Treasury under the CARES Act to support small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic.

Among the changes, the Fed lowered the minimum loan amount and raised the maximum loan limit. It also extended loan terms to five years from four years and will allow businesses to defer principal payments for the first two years of the loan, instead of the first year. The expanded MSLP will also accept loans that under the previously announced terms, if funded before June 10, 2020.

Unlike the popular Paycheck Protection Program for small businesses, the MSLP’s loans cannot be forgiven. However, the latest changes are designed to make the program attractive to a wider range of small businesses.

The MSLP is open to companies with up to 15,000 employees or less than $5 billion in revenue last year. Small businesses that have received PPP loans are permitted to borrow under the Main Street program.

The AAA leadership and staff will continue to tirelessly advocate for the much-needed relief to ensure that our members can keep their doors open, receive the equipment necessary to protect their staff, and the resources to provide excellence in mobile healthcare. We will keep you abreast of our advocacy efforts as well as changes to the MSLP as soon as the details become available.

AAA Sends Letter to Treasury Secretary Mnuchin on Paycheck Protection Program

Earlier today, the AAA sent a letter to Treasury Secretary Mnuchin asking that he use his discretionary authority to apply the same terms of the Paycheck Protection Program (PPP) to ambulance service organizations with 500 or more employees. The PPP, established by the CARES Act, is only available to businesses with 500 or fewer employees and provides more favorable loan terms based on the retention of employees. Read the letter HERE.

Treasury and SBA Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds

US Treasury Press Release:            March 31, 2020

Contact:                     Treasury Public Affairs, (202) 622-2960

With $349 Billion in Emergency Small Business Capital Cleared, Treasury and SBA Begin Unprecedented Public-Private Mobilization Effort to Distribute Funds

WASHINGTON – Following President Trump’s signing of the historic Coronavirus Aid, Relief, and Economic Security (CARES) Act, SBA Administrator Jovita Carranza and Treasury Secretary Steven T. Mnuchin today announced that the SBA and Treasury Department have initiated a robust mobilization effort of banks and other lending institutions to provide small businesses with the capital they need.

The CARES Act establishes a new $349 billion Paycheck Protection Program. The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.

“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said Secretary Mnuchin. “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day.  The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”

“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly. Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level,” said Administrator Carranza. “Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine.”

The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

The Paycheck Protection Program is specifically designed to help small businesses keep their workforce employed. Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program.

  • The new loan program will be available retroactive from Feb. 15, 2020, so employers can rehire their recently laid-off employees through June 30, 2020.

Loan Terms & Conditions

  • Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietorships, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries
  • Maximum loan amount up to $10 million
  • Loan forgiveness if proceeds used for payroll costs and other designated business operating expenses in the 8 weeks following the date of loan origination (due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs)
  • All loans under this program will have the following identical features:
    • Interest rate of 0.5%
    • Maturity of 2 years
    • First payment deferred for six months
    • 100% guarantee by SBA
    • No collateral
    • No personal guarantees
    • No borrower or lender fees payable to SBA

Visit treasury.gov/cares for more information on SBA’s assistance to small businesses.