Sen. Chris Van Hollen on Thursday sought to reassure small business owners who already had to lay off their workers about a major facet of the Senate’s $2 trillion coronavirus economic stimulus package.
“If you use these funds to rehire those employees … then you qualify,” the Maryland Democrat said on CNBC’s “Squawk Box.” ”There are lots of people who have already had to close their doors since they had no customers walking into their restaurants or bars or whatever.”
“They will be eligible and those loans will be forgiven” if the workers are rehired, Van Hollen added.
A key piece of the stimulus package — passed unanimously by the Senate on Wednesday — is the nearly $350 billion fund for small businesses. Businesses with less than 500 employees are eligible for the loans, which can be used for payroll and other expenses, such as insurance premiums and utilities.
Van Hollen noted the forgiveness provision lasts eight weeks from when the loan is approved. That is, the portion of the loan used to cover expenses during those eight weeks is what is eligible for forgiveness.
“That’s one area that may well need to be extended depending on what happens with fighting the virus,” said Van Hollen, who is on the Senate Budget Committee and the Committee on Appropriations.
The amount of the loan that is eligible to be forgiven depends on the number of workers who are retained or rehired, according to The Wall Street Journal.
The loans will available through the banks and credit unions that already participate in the Small Business Administration’s 7(a) program, Sen. Marco Rubio, R-Fla., said Thursday on CNBC’s “Fast Money.“
“All of the big banks already participate in the 7(a) program,” Rubio said.
The bill took the program’s “existing infrastructure and repurposed it for the purpose of getting money into the hands of small businesses quickly for payroll,” Rubio explained.
Business owners who want to see if they qualify for the loans should begin by contacting their bank, Kevin Kuhlman of the National Federation of Independent Business told CNBC.
The COVID-19 relief legislation is awaiting approval by the House of Representatives and then President Donald Trump. Speaker Nancy Pelosi predicted the House would it approve it Friday in a ”strong, bipartisan” vote.
Van Hollen said he thought the legislation wasn’t “perfect” but was an overall “good thing for the country.”
“And of course, it’s an emergency and urgent moment,” he added.