Small Business Covid-19 Resources
Understanding the new Federal Package can be difficult, here is one of the best sources we have found to help you understand how it can be part of our business’s plan to address this crisis’s financial impacts. https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide
Want to know how to apply? Check out the easy, step-by-step Small Business Coronavirus Emergency Loan Guide: https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf
At this time we recommend all businesses looking to seek Federal Assistance or Loans to contact their local bank or lender. The SBA’s 7a Loan Program (includes new forgivable loans) and the SBA Direct Disaster Loans are all tools at your disposal.
Additionally there now Payroll Tax deferments, a Paycheck Protection Program (basically a grant to help you keep or rehire employees), new tax tools, plus the date to file taxes has been moved to July 15th.
Always seek extra debt as a last resort – Many sources of help are out there please don’t be afraid to ask. Many local banks are offering extended credit, payment deferments, and other assistance that may be more beneficial than a disaster loan.
Federal Stimulus Package Promises Relief for Small Businesses
Broad Highlights: all numbers are approximate
1) $500 billion in loans to eligible businesses 2) $350 billion in small business loans 3) $24 billion to stabilize the farm economy
Labor Provisions 1) Paid leave payment cap and advance tax credit 2)$600/week add-on to state unemployment programs 3)Create state short-term compensation programs 4) Provisions for the self-employed
Tax Provisions 1) 2018 – 2020 losses can offset previous income 2) Allowable interest deductions up to 50% 3) 2-year payroll tax deferral 4) Access to tax refunds when paying taxes on overseas earnings 5) Create employee retention tax credit 6) Accelerate corporate Alternative Minimum Tax (AMT) credits 7) Fix to Qualified Improvement Property
Health Care Provisions 1) $150 billion for health care facilities 2) Liability protections for PPE makers 3) Clarifies insurance coverage for tests and treatment 4) $200 million for telehealth
Individual Provisions 1) Individual rebate checks ($1,200 for individuals, $500 per child) 2) Waives 10% penalty for retirement plan distributions
Keep in mind that the Direct SBA Programs are taking 3-4 weeks to be processed, the programs through local banks are taking less than 2 weeks on average.
Federal Loans And Grants
The Small Business Administration (SBA) offers guidance for businesses and employers to plan for and respond to Coronavirus disruptions, for general information please visit: SBA.gov The SBA is now offering two primary assistance tools The Paycheck Protection Program known as PPP (through local banks) and through the Economic Injury Disaster Loan (EIDL) program that provides small businesses with working capital loans and a $10,000 forgivable advance. These tolls are to provide vital economic support to small businesses to help avoid closure and keep employees or rehire employees. These tools are open to non-profit organizations, sole-proprietors, contract workers, and all traditional small businesses.
Guide to all available SBA Covid-19 Small Business Funding Resources can be found here – This includes the PPP, EIDL, Express Bridge Loans, Debt Relief Programs
> Paycheck Protection Program (PPP) The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive PPP loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program. Local Lenders have begun processing loan applications. The Paycheck Protection Program will be available through June 30, 2020 but funds may run out before then.
> Forgivable $10,000 Advance Payments are now available (may be limited to $1,000 per employee) In response to the Coronavirus (COVID-19) pandemic, small business owners in all states are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application. This loan advance will not have to be repaid. Take extra care when using both the $10,000 advance and the PPP program, be sure to be keeping good records of your eligible expenses and create a plan with your local lender.
The forgivable cash advance is applied for online with the SBA You are given the option of turning down the loan (if approved) and just taking the 10,000 cash advance. Even if you are not accepted for a loan you get to keep the $10,000 cash advance.
Points of Clarity:
- Sole Proprietors and Contract Employees may apply
- A business can apply for both programs – please note that if you apply for both you can not use the forgivable dollars for the same expenses and will need to be able to clearly show your expenses. Local Banks can help you make this determination.
- Very small businesses with limited payroll expenses may be best served by the EIDL program, if you have multiple employees both programs should be considered.
- These programs are taking weeks not days to get you funds, if you need emergency money now apply today but also talk to your bank about short term financial assistance.
If you have not already done so – be sure to communicate with your lender about any difficulties you are having or expect to have – Many banks are extending lines of credit and providing other assistance in this difficult time. Do not be afraid to seek help!
We are wishing you the best and here to help you. Please do not hesitate to reach out to us if you have questions! Main Street Beatrice, 402-223-3244, firstname.lastname@example.org