Federal stimulus pumps $1.25B into Delaware

As Delaware enters its third week of corona-related restrictions, residents and businesses can soon expect some relief.

A $2 trillion stimulus package signed into law March 27 will give money to individuals and provide new loans and grants to small businesses, which have suffered crippling revenue loss under the state-ordered shutdown. Gov. John Carney issued his first emergency order March 13 and has expanded the order seven times, including limiting restaurants and eateries to take out and delivery only. Carney closed all nonessential businesses March 24 while requiring residents to stay at home.

U.S. Sen. Chris Coons, D-Delaware, said he is not sure when residents can expect to receive their checks, although U.S. Treasury Secretary Steve Mnuchin said March 29 some people could receive direct deposit payments in three weeks. Those who do not have direct deposit connected to their tax returns would get checks in the mail.

“It doesn’t matter if you’re employed, unemployed, or if you’re in college. It is every citizen over 18,” Coons said. “Eighty percent of American adults will get a check.”

Payments will be based on adjusted gross income reported on 2019 tax returns, and if those have not yet been filed, the Internal Revenue Service will use 2018 returns. All workers 18 and older who make less than $75,000 a year will receive a $1,200 check. The amount is phased out by $5 per $100 for those who make $75,000 to $99,000.

Married couples with combined incomes less than $150,000 would each receive full payments for a combined total of $2,400. For each child under 18, the amount is $500. Payments are decreased to married couples who make more than $150,000, phasing out completely for those who make more than $198,000. 

“This is a direct payment that is not taxable, and you won’t have to report it on 2020 tax returns,” he said. “That is my impression from everything I’ve read so far.”

Small business help

The Small Business Administration has been tasked with processing loans and grants to small business and nonprofits to cover expenses during the shutdown.

“What essentially they’re offering is a new type of loan that is zero fee, rapid approval, 100 percent federally guaranteed, and if the small business or nonprofit uses it to pay their payroll, it becomes a grant,” Coons said.

Using a hypothetical example of a restaurant that has had to lay off its 100-person staff after closing its doors except for takeout and delivery only, Coons said, business owners would go to a local bank that is an approved SBA lender with proof of the business’s average monthly payroll.

Based on the average monthly payroll, he said, a business could be approved for a loan up to 2.5 times the average monthly payroll.

“I can use that loan to pay payroll, rent, utilities, mortgage, and if I use it to rehire the people I just laid off, or to retain the people I employ ... then it becomes a grant,” Coons said.

According to the stimulus plan, assistance would be retroactive to Feb. 15, 2020.

Coons anticipates that there will be great interest in the SBA loan/grant programs, and warns businesses inquiring by phone to expect delays. “There’s going to be a lot of people saying, ‘I can’t get through, I can’t get through,’” he said.

Still, he said, the stimulus is providing substantial help to small businesses in the beach community.

“It is specifically designed for small business, and designed with flexibility for hospitality,” he said. “For our beach areas, when their hotels, restaurants and bars have really faced devastating impacts, this SBA loan and grant program should be very powerful.”

The Delaware SBA District Office website is at https://www.sba.gov/offices/district/de/wilmington.

It is an ideal first stop for any of the SBA-provided benefits, Coons said. In addition, he said, the Delaware SBA holds a call at 3 p.m. every weekday for businesses and nonprofits about their programs. The number is 1-202-765-1264 with passcode 827299626. 

Unemployment benefits

With millions of people across the country now out of work, Coons said, unemployment benefits are designed to allow them to continue to stay at home while the pandemic rages on.

Delaware has already expanded its unemployment insurance to cover those out of work because of the corona shutdown, but the federal government is now kicking in an extra $600 a week.

“In the state of Delaware, that will be $1,000 a week for the next four months,” Coons said. “We want to make sure they have the resources to take care of their families, to support their communities, and to get through this.”

State assistance

Delaware is slated to receive $1.25 billion in federal money - an amount Coons said he fought for with other small states.

“A group of us from small states succeeded in getting a small state floor, so that no state gets less than $1.25 billion,” he said.

Coons said he has been in contact with Gov. John Carney about the anticipated $1.25 billion Delaware will receive. Coons said he expects state officials will determine how the money is divided among the state’s municipalities.