What’s Government Doing To (or for) Wholesale Distribution and How Our Economic Outlook Is Shaping Up

BY Tim Fisher
4/2/2020 - COVID-19

In an effort to continue to try and provide our members with resources that are easy to consume, and relevant to their own businesses, we are taking some information that has been developed and trying to “pare it down” as much as possible so you can easily find the identified portions that are most beneficial.

One resource that has been created in the wake of the COVID-19 virus is a video series developed by Dirk Beveridge from UnleashWD. In this particular video, “What’s Government Doing To (or for) Wholesale Distribution And How Our Economic Outlook Is Shaping Up”, Dirk interviews Alex Ayers, Director of Government Affairs, and Tim Fisher, Team Leader of Market Intelligence from HARDI.

We have taken some time to pull some of the highlights and identify some important items that were covered, and then time stamp the video for easy access to everything that was covered in the video.


The CARES Act, a $2 trillion economic stimulus package signed into law by President Trump on March 27th, is best understood as being a compilation of different legislative buckets. Those buckets primarily consist of:

  • Appropriations to the U.S. Small Business Administration (SBA) to enhance its 7(a) Loan Guarantee program.
  • Deferment of 6.2 percent of employer payroll taxes for businesses through December 31st, 2020.
  • Support for industries severely affected by Covid-19 (airlines, cruises, hospitality, etc.).

Appropriations to the SBA largely support the expansion of its 7(a) loan guarantee program, which allows businesses of less than 500 employees to apply for loans through one of the 1,800 certified SBA lenders. The CARES Act temporarily updates the 7(a) program so that the SBA can offer 100 percent loan guarantees to certified SBA lenders making loans through the program (up to $10 million). Loans made by a certified lender with a 7(a) loan guarantee come with a maximum interest rate of 4 percent, and with a maximum term of 10 years for loans whose proceeds are used for working capital purposes. Additionally, businesses that maintain certain payroll levels for 8-weeks after the loan’s origination date are eligible for loan forgiveness equal to payroll costs. SBA will be releasing guidance to its certified lenders around April 10th, and eligible businesses can begin applying for the enhanced 7(a) loans after that date.

Unlike the SBA 7(a) loans, deferment of the 6.2 percent payroll tax (which is an employer’s contribution to Social Security) must be repaid. Businesses that elect to defer their 2020 social security tax have until 2022 to repay the deferred taxes. Businesses of all sizes are eligible for payroll tax deferment.

While the CARES Act emphasizes delivering affordable financing to small businesses, it also establishes loan support for mid-sized businesses (between 500 and 10,000 employees). Although details around where a mid-sized business can apply for the newly authorized loans, the program will be operated by the U.S. Department of Labor. Outside of its support for businesses the CARES Act authorizes direct payments of $1,200 to every U.S. citizen, $2,400 per couple, and an additional $500 per dependent child. Similarly, the Act authorizes $600 in additional unemployment benefits that will supplement state unemployment benefits.

Despite varying reports that Covid-19 may push unemployment rates above 9 percent (with some estimates ranging as high as 30 percent), HARDI is hopeful that the CARES Act contains enough support for businesses and individuals that the U.S. economy will not sustain any lasting structural damage as a result of the virus’ outbreak.

Video Timestamps:

4:48 – Overview of CARES Act

6:20 – Discussion of the enhanced SBA 7(a) Loan Program

10:05 – What is a forgivable loan?

11:21 – Does the payroll tax deferment need to be repaid?

11:56 – How does the federal government define a small business?

13:26 – What are the necessary steps to get a 7(a) loan forgiven?

14:03 – Does the payroll tax deferment also apply to mid-sized businesses?

17:47 – Overview of the Families First Coronavirus Relief Act (FFCRA)

21:39 – Brief overview of the new unemployment benefits authorized through the CARES Act

23:27 – What do you think will be the extent of coronavirus’ impact on the economy?

About UnleasedWD's video series

At UnleashWD our purpose is to unleash the human spirit.  And during this unprecedented time we felt compelled to support the UnleashWD tribe and our association partners with the right mix of inspiration and timely, relevant information.  We reached out to our network of wickedly smart subject matter experts to provide the sessions below.  In the words of one attendee - “This was amazing.  You’ve changed our day tomorrow.  We’ll be on the attack!”

We are a design, innovation, and strategy firm who transforms legacy distributors into nimble and innovative market leaders.  What you are about to experience is designed to unleash your spirit so like the individual above decided, you too will be on the attack!

We are here to support you through these next few months and beyond.  If we can do anything for you please reach out directly to either of us.

Dirk Beveridge                      Bethany Hepler
Founder                                VP of Design
dirk@unleashwd.com           bethany@unleashwd.com