How the CARES Act Helps Ohio Manufacturers
Two weeks ago, Congress passed and President Trump signed into law the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act. The CARES Act is providing unprecedented financial support to offset the economic free fall brought about by the virus. Manufacturers in Ohio, which have been among the businesses hurt significantly by this slowdown, will soon get some much-needed help as part of the CARES Act.
Specifically, the CARES Act rescue package will help manufacturers in Ohio during the coronavirus pandemic by:
Securing the Supply Chain
- CARES provides $8 billion for cargo airlines and $3 billion for airline contractors to retain workers and keep shipping rates low.
- This money includes direct payroll support, loans, and loan guarantees through funds run by the Treasury Department
- This will enable manufacturers to continue to ship products to markets at an affordable rate during this crisis.
- CARES provides specific additional provisions to strengthen the nation’s medical supply chain.
- It creates a task force to examine the American medical supply chain to eliminate redundancies and promote domestic manufacturing as foreign manufacturers’ output has decreased. This will encourage more manufacturers to follow the lead of companies like Ford and produce needed medical equipment like ventilators.
- It also includes provisions of the MEDS Act, which Senator Portman cosponsored. These provisions will increase transparency in the prescription drug supply chain and establish mechanisms to prevent global shortages of life-saving therapeutics.
- CARES provides $10 billion for USPS’ last-mile service for delivery of medical equipment.
- This service is critical to delivering consumers can continue to purchase and receive American-made medical equipment for the duration of the pandemic from the safety of their home.
Helping Manufacturers Stay Afloat
- CARES provides $350 billion in low-interest loans for companies with under 500 employees through the Small Business Administration.
- These companies are eligible to receive up to $10 million under this program.
- Importantly, if the loan is used for payroll, rent, or mortgage payments, it is completely forgiven, effectively making it a grant.
- The application for borrowers can be found HERE.
- CARES includes an additional $500 billion in immediate tax relief for businesses of all sizes, including provisions such as payroll tax deferral and the ability to immediately monetize tax losses.
- Also included is an employee retention credit for businesses that keep employees on their payroll during a suspension of their business operations.
- These provisions allow Ohio businesses to prioritize keeping employees on payroll and thus minimize painful layoffs.
- The provisions also provide immediate cash flows to help businesses, and in particular small businesses without cash reserves, stay afloat during the months ahead.
- CARES also creates a $450 billion fund to provide low-interest loans to distressed businesses between 500 and 10,000 employees that have been affected by the crisis
- These loan funds are designed for businesses to retain their employees and keep jobs in the United States during this crisis
- In addition to this loan fund, Treasury also set $17 billion in lending capacity to help businesses, and in particular manufacturing businesses, that are critical to our national security
Promoting Manufacturer Innovation
- CARES provides $50 million in funding for projects related to promoting an effective private industry response to the coronavirus.
- Businesses, including manufacturers, will be able to apply for some of these funds from the Hollings Manufacturing Extension Partnership.
- These funds will be distributed as grants to go towards producing key pandemic response supplies, training workers to manufacture COVID-19 response products, or developing facilities to be able to produce COVID-19 response products.
NOTE: This is the latest in a series of policy summaries about how the CARES Act will help Ohio during the coronavirus crisis. Previous summaries detailed how it will help individuals and families, small businesses, hospitals, veterans, seniors, and rural communities.