Small businesses have already cut millions of jobs because the coronavirus crisis forced them to close and they could no longer pay salaries. But an important piece of the $2 trillion coronavirus relief bill signed last week—a $350 billion “paycheck protection program”—will use government funds to help pay salaries so more people can stay on payrolls, and others can be hired back.
Small businesses fill out a simple application, and then can get loans that will be fully forgiven if they’re used to keep employees on payroll or quickly rehire those who have just been laid off. It covers up to eight weeks of payroll costs, including benefits. A smaller part of the loans can also be used to cover interest on mortgages, rent, and utilities.
“I think it’s really important because, one, it keeps people attached to their job,” says Elise Gould, an economist at the nonprofit think tank Economic Policy Institute. “It keeps money flowing to them, so that they can pay their bills. And when we get on the other side of this pandemic, then basically an employer could just say, ‘Okay, now come back to work.’ You can have a much faster recovery, instead of if all these millions of workers had been laid off.”