Sen. Cruz on CNBCs Squawk Box Highlights Tools & Resources Available to Small Businesses, Job Creators in CARES Act
Together, We Will #CombatCOVID19
March 30, 2020
HOUSTON, Texas - Now that the third coronavirus emergency relief package, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, has been signed into law, U.S. Sen. Ted Cruz (R-Texas) this morning appeared on CNBC's Squawk Box to discuss the emergency relief that is on its way to individuals, families, and small businesses.
When asked about the $377 billion small business component of CARES Act, Sen. Cruz said:
"The small business component is directed to every small business in America. If you're a small business, if you've got 500 employees or less, Congress just appropriated $377 billion in emergency loans for you. They go through the Small Business Administration and then through your local bank or community financial institution. Whatever your normal bank is that you go to in your business. If they're an approved small business lender go to them. These loans are guaranteed."
"And the unusual thing about these loans is if you use the loan proceeds to pay for salary and payroll, or to pay for mortgage or rent or to pay for utility, then in a year the loan will be forgiven entirely. The amount you spend on those items, it's designed for a very specific purpose. If you're a restaurant, if you're a bar, a hardware store, a nail salon, all of the different small businesses, many of which have been shuttering their doors and laying off employees. It's designed for you to be able to hire back your employees, keep a paycheck coming to the employees so that they have the ability to support their families. That money becomes essentially a grant. It becomes forgiven to allow the small business to stay alive and to allow the employees to keep a paycheck."
He continued, noting that the economic problem will not be addressed until COVID-19 is defeated:
"The economic problem is not going to be solved until we defeat the pandemic. The underlying problem here is the coronavirus pandemic. Until we get more widespread testing, until we begin developing vaccines and treatment protocols that are more effective, until we start bending the curve down, which is what the objective of all of this social distancing is, the secondary consequences, which are significant and real on the economy, will remain. [...] So these are essentially bridge loans to keep the small businesses going and keep the employees paid until we defeat the underlying challenge, which is the coronavirus pandemic."
If you're a small business with 500 employees or less, how does the CARES Act help you keep your doors open and your employees on the payroll?
The CARES Act:
- Provides $377 billion in emergency relief for small businesses, including restaurants, bars, hardware stores, and nail salons, as well as those who are sole proprietors or self-employed.
- Allows 8-weeks of loan forgiveness for expenses that include payroll, rent, mortgage interest, and utilities.
- Takes meaningful steps to quickly get liquidity to businesses in order to stabilize our economy and protect jobs in Texas and across the country.
Small businesses can apply for this emergency relief through the Small Business Administration (SBA) at their community bank. A short summary of the SBA loans are below:
- Economic Injury Disaster Loan Program: Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan due to Coronavirus (COVID-19).
- Express Bridge Loan Pilot Program: Allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan.
The Senate Small Businesses Committee has also developed a small business owners guide to the CARES Act here and has answered FAQs on the Paycheck Protection Program here. For more information on resources available to small businesses, visit the SBA's site here.
ADDITIONAL RESOURCES FOR SMALL BUSINESSES
- The U.S. Chamber of Commerce has issued guidance and helpful tools for small business owners and job creators to utilize as they navigate COVID-19. Read more here.
- Governor Abbott's Business and Community Development Division has provided resources and tools for Texas Small Businesses. Read more here.
- The Texas Association of Businesses has developed a COVID-19 business resource toolkit. Read more here.
For more information and additional resources, visit www.cruz.senate.gov/coronavirus/.