Last week the Coronavirus Aid Relief and Economic Security Act (CARES Act) was signed into law. This act is the largest economic stimulus bill in modern history—more than doubling the relief offered after the last financial crisis in 2009.
This is important news for title & escrow businesses. The act includes $350 billion allocated for small businesses in need of financial assistance. Title & escrow businesses are eligible if they meet certain qualifications including that they have less than 500 employees.
Likely the most impactful benefit of the stimulus package for title & escrow business is the payroll protection program. Under this program, small businesses receive a set of funds that help cover business operations for about a 10 week period including:
- Payroll (including health insurance, state and local taxes, and 401k matching programs related to payroll)
- Rent or mortgage payments for the primary places of business
- Utility payments for the primary places of business
Businesses are eligible for loan amounts equal to 250% of their monthly payroll expenses from the past 12 months (up to $10 million). Loan amounts used to cover payroll expenses will be forgiven if the business retains its employees at their salary levels.
Businesses that are worried about keeping operations running and paying expenses should consider talking to a bank or a lender that knows the title industry well as soon as possible. The details of the application process are still being determined; however, enormous demand for this program is anticipated.
Things are moving fast in light of COVID-19—staying in the know is the surest way to keep your business operations running as smoothly as possible. To stay up-to-date, visit Qualia’s COVID-19 resource page which lists information and advisories from trusted sources(including ALTA’s resources on how to benefit from the stimulus package).