On March 27 major news broke in the U.S. The president signed a $2 trillion economic relief package, which addressed a number of issues to respond to the coronavirus outbreak, including small business loans, unemployment insurance, housing, and taxes. In this article, we will focus on a Small Business Administration (SBA) provision, which summarises the impact of Covid19 on the real estate industry and provides a temporary solution and update to the loan system for businesses including the real estate industry.
As the SBA provision states, businesses can borrow up to $10 million toward mortgage interest, rents, utilities, and payroll costs (500 employees or fewer). And the most important part— a portion of these loans may be forgivable.
Realtors who are severely impacted by the Covid 19 pandemic crisis are able to apply for these SBA loans up to $10 million to cover the expenses mentioned above for the period February 15, 2020 through June 30, 2020.
As for the portion of the loan which could be forgiven—including payroll, rent, mortgage interest and utilities—the decision will be made based on the employer’s ability to maintain current salary levels or bring the salary back to the usual level before April 1.
Employers who reduced the number of staff members would be forgiven the part of the loan based on these numbers because the SBA Payroll Protection Program’s forgivable amounts will phase out accordingly.
What does this bill mean for real estate agents? It means that real estate services are recognized as an important part of the U.S economy. This bill has been developed to bring relief to the self-employed, small businesses and the independent contractors as well as support the real estate industry, which Shannon McGahn, senior vice president of government affairs for NAR, has mentioned is key to the U.S national recovery.
To learn more about the impact of Covid19 on the real estate industry, check out this article.