Help is On the Way

I believe we have all been wondering how this massive shutdown of businesses, and restrictions on work, will play out. We have been patiently waiting to either come up with our own safety nets or see what might be presented by the government. 

We have some information and some help now and I spent time yesterday studying up on what is being done. 

With a $2 Trillion stimulus bill with many provisions coming our way, it’s hard to imagine how this process could go smoothly, given the numbers of affected people. 

So, if you believe that some of the new programs can help you, or you need capital for your business, please do not wait. Speak to a bank or the SBA right away.

Try to move on this now. It’s intended to roll out quickly, and I hope it will, but I would want to start the process now. It could get bogged down by the numbers and unforeseen issues that cause confusion in implementation.

The video below is a panel discussion, moderated by INC. magazine, that does a good job of outlining the new relief programs. 

I will summarize some of the key points for you below, as well as some of the general assistance that you can expect. 

1. Small business owners in all U.S. states and territories are currently eligible to apply for a low-interest loan as a result of the COVID-19 pandemic.
2. Small businesses may be able to apply for an Economic Injury Disaster Loan (long term, low interest). A loan advance of up to $10,000, that will not have to be repaid, can be obtained, even if ultimately you do not qualify for a loan.
3. The U.S. government has responded by passing the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) (Alyssa, maybe this link should go in the resources section too) to cover ongoing costs such as payroll, in an effort to keep employees on the payroll whether the business is operating or not. This is also known as the “payroll protection act.” $350 Billion has been provided for small businesses with less than 500 employees. Special accommodations are made for some larger companies with numerous locations, that operate themselves with less than 500 employees, such as hotels. 
4. This loan (through the CARES Act) has unique advantages, because It is a loan that can be turned into a grant if used in specific ways in the 8 weeks following the funding date. A portion of the loan will be forgiven if the funds are used for payroll (again incentivizing employee retention or rehiring). Non payroll expenses such as rent and utilities will also reduce the loan amount, with $ for $ loan forgiveness on these expenses. The remaining loan amount will need to be paid back with interest that is no higher than 4%
5. Access to assistance has been streamlined with a number of typical loan requirements being waived. Paperwork has been reduced, no personal guarantees are required and there is no requirement that you look elsewhere first. The availability of lenders is being expanded. Small business is being defined in the broadest sense, so sole proprietorships, non-profits, veterans organizations, and others are included. 
6. One of the most important things to note is that if you apply for a loan under the CARES Act (payroll protection), you will not be able to apply for the disaster relief loan, so be mindful of choosing between them. 
7. If you currently have an SBA loan, you can defer payments at this time for 6 months. There are other lenders as well who may be willing to defer payments at this time, including American Express. Due dates for tax filings, tax payments and related contributions to retirement, have been moved to July 15th, 2020.
8. Besides the Federal relief available, there are many state and local programs available. There is relief for renters, homeowners, and landlords. There is student loan relief if you qualify. Check-in with your state and local rules to see what is currently enacted to help you.
9. Everyone will be getting a $1,200 advance tax credit (subject to income qualification). If you provided the bank information when you filed your return, this will be deposited directly. Individuals with children will get an additional $500 per child. 
10.  Unemployment benefits have also been expanded, and people who had not qualified before could qualify now. The requirement to be looking for employment at this time has also been restated. Check with your state to see if you qualify if you are currently unemployed as a result of the current situation. 

There will be a lot of information to sort through, and it’s best to find some trusted sources so information overload doesn’t delay you. 

For the business owner who may be on the fence as to whether to keep or rehire employees, it’s been said that we were in a “talent war” before the virus, and we will likely be in one again after, so if you can keep your key people, you’d be wise to do so.