Federal resources for small businesses COVID 19

Federal resources for small businesses COVID 19

Here’s a compilation of federal government resources and links for small and midsized businesses, from emergency financial relief to counseling services. This will be updated as new information becomes available.

COVID-19 UPDATES

The Centers for Disease Control and Prevention is providingcontinuous updates to its guidance for businesses and employers on its Covid-19 website.

CARES ACT

UPDATED: April 25

With a second round of the Paycheck Protection Program signed into law April 24, the SBA said it would begin accepting new loan applications at 10:30 a.m. Eastern April 27. The rules for borrowers are the same as the first round.

The initial round of PPP funds ran out of money April 16. The second round includes $310 billion for PPP loans for small businesses and includes funds set aside for loans to be made by smaller community-based lenders.


The $2 trillion stimulus CARES Act became law March 27. In addition to $1,200 direct payments to many individuals and expanded unemployment benefits, the bill included:

•$349 billion in federally guaranteed loans to businesses with fewer than 500 employees under the Paycheck Protection Program. Loans will be available up to $10 million. In certain circumstances, such as using proceeds to pay employees, the loans can be forgiven. The loans will be made primarily through Small Business Administration-certified lenders, although other FDIC banks, credit unions and fintech lenders can become authorized to make the loans.

Treasury and SBA began accepting applications from small businesses April 3. Independent contractors and the self-employed were able to start applying April 10.SBA has posted information on the Paycheck Protection Program on its website, including a sample loan application form. It offers Lender Match, a free online tool to connect a business with SBA-approved lenders within 48 hours.

Treasury has also posted details, including how to become a certified lender under the program.

PPP loans will have these features:

  • Interest rate of 1%
  • Two-year maturity
  • Six-month deferral of first payment
  • 100% guarantee by SBA
  • No collateral
  • No personal guarantees
  • No borrower or lender fees payable to SBA

The PPP also includes funding for Small Business Development Centers, Women’s Business Centers and Minority Business Centers to provide free training, education and advising for small businesses. To find a nearby center, the SBA provides a search tool.


SMALL BUSINESS ASSISTANCE

Small businesses in every U.S. state and territory can apply for a SBA low-interest Economic Injury Disaster Loan. These loans provide working capital of up to $2 million to help overcome temporary loss of revenue. The interest rate is 3.75% for small businesses with repayment of up to 30 years. Applicants are encouraged to apply online.

The CARES Act also provides an Economic Injury Disaster Loan advanceof up to $10,000 which will not have to be repaid.

UPDATE: On May 4, the SBA announced the EIDL portal would reopen, but only for agricultural businesses.

The SBA announced April 16 that it was unable to accept new applications for the Economic Injury Disaster Loan Covid-19-related assistance program, including EIDL Advances. Applicants who had already submitted applications would be processed on a first-come, first-served basis.

As of April 24, SBA reported approving 38,984 EIDL loans for a total of $7.97 billion and processing 1,192,519 EIDL advances for a total of $4.8 billion.


SBA also offers its traditional loan programs for working capital, fixed assets and more. It also has express loan and microloan programs. Detailed information on these loans and how to connect with a lender is available on its website.

MAIN STREET LENDING PROGRAM

The Federal Reserve announced April 9 its Main Street Business Lending Program for small and midsized businesses that will complement SBA programs.

APRIL 30 UPDATE: After receiving more than 2,200 letters in response to its request for feedback, the Fed announced April 30 it would expand loan options under the program.

Changes include:

  • Creating a third loan option with increased risk sharing. Lenders would retain a 15% share on loans added to existing debt not to exceed six times a borrower’s income.
  • Businesses with up to 15,000 employees and $5 billion in revenue are now eligible.
  • The minimum loan size was reduced to $500,000.

More details on the expansion can be found on the Fed’s website.

According to the Fed’s initial announcement, the program will offer four-year loans to companies employing up to 10,000 workers or with revenue of less than $2.5 billion. Principal and interest payments will be deferred for a year. Eligible banks may originate new Main Street loans or use Main Street loans to increase the size of existing loans. Companies seeking Main Street loans must make reasonable efforts to maintain payroll and retain workers and follow compensation, stock repurchase and dividend restrictions that apply to the direct loan programs under the CARES Act. Firms that have taken advantage of the PPP may also take out Main Street loans.

Treasury partners with community banks and community development loan funds with its Small Business Lending Fund to encourage small-business lending. More than 300 institutionsparticipate

The Families First Corona Virus Response Act legislation took effect April 1 and will run through Dec. 31, 2020.The law requires employers with 500 or fewer employers to provide paid leave to certain employees in a temporary expansion of the Family and Medical Leave Act and it requires employers to provide paid sick leave. Small businesses with fewer than 50 employees may be exempt from providing paid leave because of school closings or child-care unavailability if the leave would jeopardize the business as a going concern.

The act allows payroll tax offsets to employers. Labor’s Wage and Hour Division will post a recorded webinar April 3 with detailed information on how to participate.

The IRS, Labor and Treasury departments have all posted details about the payroll tax credits.

For employers the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act requires:

  • Two weeks of paid sick leave at an employee’s regular pay rate when the employee can’t work because they are quarantined.
  • Two weeks of paid sick leave at two-third’s of regular pay because the employee is a caregiver for reasons related to Covid-19.
  • Up to an additional 10 weeks of paid leave at two-thirds of regular pay for an employee who is a caregiver for reasons related to Covid-19.

More information is at these links:

Employee paid leave rights

Employer paid leave requirements

Covid 19 and the Fair Labor Standards Act questions and answers

Covid 19 and the Family and Medical Leave Act questions and answers

Wage and Hour staffers can be confidentially reached by phone, 1-866-487-9243, or via its Contact Us form (not anonymous)

A three-month delay for federal tax payments owed up to $1 million was announced by the IRS. Federal tax returns will still need to be filed by April 15 but entities will have until July 15, 2020, to pay. This will apply to individual returns but should also cover many pass-through entities and small businesses.

The IRS has a website focused on steps to help taxpayers, businesses and others affected by the coronavirus. The section is updated as information is available. An updated FAQ on the Employee Retention Credit was posted by the IRS on April 30.