The pandemic aid bill contains $285 billion for additional loans under the Paycheck Protection Program — the government’s small-business program created under the CARES Act — through March 31, while doing away with the restriction that left more than $100 billion unspent over the summer. The New York Times’s Stacy Cowley reports on what we know based on outlines of the bill circulating among congressional officials on Monday:
The new relief bill offers a second cash infusion for those who meet stricter terms: Borrowers with fewer than 300 employees that had a 25 percent drop in sales from a year earlier in at least one quarter could qualify for an additional loan of up to $2 million.
Hotels and food-service businesses are eligible for bigger loans this time, up to 3.5 times their average monthly payroll. Other borrowers would again be limited to 2.5 times their payroll.
Publicly traded companies are ineligible for the new loans, eliminating a provision that provoked a public outcry as deep-pocketed restaurant chains, software companies and drug makers, among others, collected taxpayer-funded loans.
The new bill expands the list of expenses that a loan could be used to pay, which previously were limited mostly to payroll, rent and utilities. Businesses could now use the money to buy supplies from their vendors, buy protective equipment for their staff or fix property damage “due to public disturbances,” according to a House Small Business Committee summary.
The plan would allow business owners who received loans in the program, which are tax-free, to claim deductions for expenses they paid for with loan proceeds.
The bill would also allocate $50 million to the Small Business Administration for audits and other efforts to address fraud in the program, which was a significant problem in the first round of funding.
The bill includes other aid measures that are not specifically part of the Paycheck Protection Program but could nonetheless help many small businesses. Those include a $15 billion grant fund for closed theaters, museums, zoos and live event venues, and $12 billion for Community Development Financial Institutions, which make loans and grants to people and communities that are often unable to get traditional banks to do business with them.
Stock indexes recovered some losses on Tuesday from the previous day as Congress passed a $900 billion stimulus package and anxiety eased in equity markets about a fast-spreading strain of the coronavirus in Britain and new travel restrictions. Futures indicated stocks on Wall Street would open slightly higher.
The Stoxx Europe 600 rose 0.8 percent, after dropping 2.3 percent on Monday. The CAC in France was up 0.9 percent and the DAX in Germany gained 1 percent. The FTSE 100 in Britain was unchanged from the previous day, when it fell 1.7 percent.
Stocks in Asia mostly closed lower. The Nikkei 225 in Japan was down 1 percent, the Hang Seng in Hong Kong fell 0.7 percent and the Shanghai composite closed 1.8 percent lower.
In Washington, after weeks of negotiations, Congress overwhelmingly approved a coronavirus stimulus package that includes billions of dollars for American households and businesses that have been hurt by the pandemic. It restores a supplemental unemployment benefit for millions of unemployed Americans at $300 a week for 11 weeks and includes money for another round of $600 direct payments to adults and children.
The British pound continued its decline as investors waited for an update on the Brexit trade negotiations. In just nine days, the transition period ends and Britain could lose tariff-free access to its largest trading partner if a deal is not struck soon. The pound fell 0.4 percent against the U.S. dollar and 0.2 percent against the euro.
The British currency fell on Monday as more than 40 countries cut off travel links from Britain in an effort to stop the spread of a new strain of coronavirus that was “out of control” in parts of England. France stopped all trucks delivering freight from Britain, and hundreds of drivers remain stuck in the southeast of England, prompting concerns about fresh food supply and lost revenue.
Tighter restrictions on social activities and businesses in Britain, imposed to limit the virus’s spread, are also expected to weaken an economic recovery that analysts had expected to restart early next year.
Energy prices dropped for a second day. Futures on West Texas Intermediate, the U.S. crude benchmark, declined 1.4 percent to $47.29.
Shares in easyJet climbed 3.8 percent after the European airline said it would defer the delivery of 22 Airbus planes for several years to save cash.
Ripple, one of the most valuable companies in the cryptocurrency industry, said on Monday that it expected to be sued by the Securities and Exchange Commission for violating investor protection laws. The suit is expected to accuse the San Francisco-based company of selling unregistered securities when it sold the digital token XRP to investors around the world. Brad Garlinghouse, Ripple’s chief executive, said in an interview that the suit would be against the company along with Mr. Garlinghouse personally, and one of the company’s founders, Chris Larsen.
Google said on Monday that it had not used its multibillion-dollar deals with other large tech firms to protect its position as the dominant online search engine, in the company’s first formal rebuttal to the Justice Department’s accusations that those deals violated antitrust laws. The filing is a paragraph-by-paragraph — and sometimes sentence-by-sentence — denial of the claims made by the government and a group of states that have joined its lawsuit. “People use Google Search because they choose to, not because they are forced to or because they cannot easily find alternative ways to search for information on the internet,” the company said.
The Walt Disney Company on Monday named Alan Bergman, 54, chairman of its movie division, succeeding Alan F. Horn, 77, a venerable figure in Hollywood who has led Walt Disney Studios since 2012. Mr. Horn will continue to serve as chief creative officer. Mr. Bergman joined Walt Disney Studios in 1996 and rose through the business affairs ranks, overseeing finance, technology, legal affairs and human resources. Most recently he served as co-chairman of the division. Mr. Bergman and Mr. Horn will report to Bob Chapek, Disney’s chief executive.
The Department of Housing and Urban Development has extend a moratorium on evictions and foreclosures on home mortgages its insures against default, protecting many first-time home buyers. The moratorium will now run through Feb. 28. It had been set to expire at the end of the month. The foreclosure moratorium applies to mortgages backed by the Federal Home Administration.
News – Markets Rebound After Stimulus Package Is Passed: Live Business Updates