The financial implications of the Coronavirus outbreak might not yet be fully conceivable, but given the fact that experts are talking about the economy being in recession, it is safe to state that the economic impact will be grave.
CARES ACT – Coronavirus Aid, Relief, and Economic Security Act
The CARES Act’s economic stimulus package seeks to secure and maintain the workforce as is and avoid mass furloughs and lay offs. In total, it provides for more than $500 billion of federal funding: (i) grants and direct lending dedicated to specific non-financial industries, such as the airline and national security sectors; (ii) significant financial support for small businesses (i.e. grants, loans, etc) administered by the Small Business Administration, and (iii) funding for several lending programs administered by the Federal Reserve.
CARES most important benefits for businesses and individuals include the following:
- Direct Payments amount up to $1,200 for most American adults (individuals) and $500 for each child. For the most part, payments will be distributed automatically. Some taxpayers who typically do not file returns will need to submit a simple tax return to receive the economic impact payment.
- The Small Business Administration (SBA) is offering loans and grants for small businesses to retain their employees and assist with operating expenses. SBA provides funds via the PPP – Paycheck Protection Program. It is a loan designed to provide businesses with less than 500 employees, sole proprietors, independent contractors and self-employed individuals a direct incentive for small businesses to keep their workers on the payroll by funding up to 8 weeks of payroll costs including benefits.
Small businesses can apply for non-repayable loan to keep employees on payroll based on the average last 12 month payroll. Applications can be filed at any SBA approved bank.
In total, $350 billion are available for PPP on a first come first serve bases. Funds are quickly being allocated which is why it is a good idea to submit the application documentation as soon as possible. It should be kept in mind that those PPPs only apply to banks and not necessarily private lenders. Non-commercial lenders are currently reviewed for SBA approval due to the emergency situation.
- Eligibility for unemployment insurance has expanded and benefit amounts have increased for those impacted by the COVID-19 pandemic.
Most industry creative and support occupations typically are not eligible for unemployment as those don’t fall under the employee definition, such as sole-proprietors, independent contractors (despite of the new AB5 classification regulations) and self-employed workers. The Act covers all those individuals as well so that temps and gig workers receive unemployment benefits. This will also apply to those workers who have already maxed out their annual unemployment benefits.
In a Q&A session with USC’s Trojan Entertainment Network association (TEN) Congressman Adam Schiff talked about the relief the Act will bring to the members of the entertainment world, specifically in California.
Entertainment Industry Specific Resources and available FUNDS
- A great link for resources can be found at the Art House Convergence website.
- The LA Times has listed various organizations and resources where industry workers can turn to in order to receive financial relief.
- A much more thorough list for economic resources during this crisis can be found on Creative Capital’s website.
- Artist Relief distributes $5,000 grants to artists financially burdened by COVID-19.