PROVINCETOWN — More than $600 billion of the $2 trillion federal financial rescue package that became law last week will go to beefing up unemployment benefits and small business loans and grants.
For those who are already covered by unemployment insurance, the biggest change will be to the size of their check. In most cases, it will more than double. The average benefit paid in Massachusetts is around $523 a week; the stimulus bill adds $600 a week to that for four months and extends benefits by 13 weeks.
Congress has now expanded eligibility to include the self-employed, gig workers, contractors, part-time workers, and even people who have never worked, such as recent high school graduates. This new group will receive half the statewide average benefit, or about $260 a week, as well as the bonus — $600 more a week for four months (April through July).
“You have to self-certify that you are cut off from work because of the virus,” said Phineas Baxandall, senior analyst at the Mass. Budget and Policy Center. “It could be that you have to care for someone. It could be that you have to care for a child who would be in school.” He noted that the program is retroactive to Jan. 27.
Work-search requirements are also being adjusted. Staying in contact with your employer and being available to come back to work when the emergency passes will in many cases be enough.
Your legal status can determine whether you’ll be left out in the cold. “Green-card holders can also receive unemployment benefits,” said Baxandall. “Theoretically, people with legal work authorizations such as an H1-B would be eligible, too. But people who don’t have any formal work status are not eligible for any of these programs.”
Nearly $400 billion in loans will become available through the Small Business Administration. Congress defines small businesses as having up to 500 employees — which means almost every business on the Outer Cape.
There are three major kinds of loans, said Ann Robinson, chief program officer at the Community Development Partnership in Eastham.
“Economic Injury Disaster Loans come directly from the SBA,” said Robinson. “There’s also an Emergency Economic Injury Grant that you can get once you’re approved for the loan. The grant is for $10,000, and it appears to be almost immediate.” She noted that loans are capped at $2 million, with payments deferred for up to four years, and can be used for normal business expenses — rent, utilities, payroll, etc.
“You have to have already been a business since before Jan. 31 — no new businesses for this program — and it’s structured as a loan that you eventually repay.”
Payment Protection Program (PPP) loans are also available. “These loans can be used for payroll, rent, utilities, and interest on a mortgage,” Robinson said, and they can be forgiven at the end of the year. It’s also possible to convert a larger disaster loan into a PPP loan, to take advantage of the program’s generous forgivability clauses, Robinson added. Whatever has not been forgiven at the end of a year converts into a 10-year loan at 4 percent interest.
Finally, there are are traditional 7(a) and 504 SBA loans of up to $5 million that banks help to write. “The 7(a)s and 504s are for purchasing equipment, real estate, inventory,” said Robinson. “What’s different now is they’re offering six months of debt relief. That applies to existing loans and brand-new loans.”
Help navigating these programs is likely to be a big challenge. “Honestly, talking to your loan officer at your bank might make the most sense,” Robinson said. “In normal times, they might not get involved — but these are not normal times!”