Business Relief Plans with the CARE act

ALL OF THE PROGRAMS AVAILABLE TO SMALL BUSINESSES!

I just got off the line with Congressman Tom Reed and members of his office.

Here is the lowdown of what I have gathered for small business funding initiatives:

PAYROLL PROTECTION PROGRAM:
Apply directly through your SBA Lending financial institution.

If you maintain employee numbers you should be able to get 100% of payroll costs in an 8-week period forgiven.

Forgiveness is based on the proportion of payroll you maintain. You will also get forgiveness for mortgage interests and utilities as well.

Funds are provided in the form of loans that will be fully forgiven when used for payroll costs, interest on mortgages, rent, and utilities (due to likely high subscription, at least 75% of the forgiven amount must have been used for payroll)

Loan payments will also be deferred for six months. No collateral or personal guarantees are required. Neither the government nor lenders will charge small businesses any fees.

Lookback provision
If a company had to layoff employees between 2/15 and 4/26 provision allows them to get back to previous employment levels by June 30 for full loan forgiveness.

No information on the clear definition of utilities except that it has to be for “Utilities, for which service began before February 15, 2020”

NOTE: For Sole-Proprietors
Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.

In terms of calculating the amount of the loan, the treasury is being very flexible on non-traditional businesses. There will be several options to show the payroll amount as well as your self-employment wages, commissions, earnings from self-employment and net earnings (capped at $100k)
Depreciations for farms may potentially be able to be included within your net income.
Special rules for seasonal businesses in computing net income and payroll

THE BANKS DO NOT EVEN UNDERSTAND THIS AT ALL YET! Especially for Sole-Proprietors. The rules for that come out the 10th. They are literally being forced to deal with applications for a loan program they completely don’t understand and has never been done before. This will take a lot of patience!

EMPLOYEE RETENTION TAX CREDIT�
** Full disclosure, I don’t completely understand this one, see more at https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act

This one isn’t being talked about as much!
No double dipping! You can either use this to pay your employees or the PPP.
This is an advancable refundable Tax Credit
$5000 for each employee you have.
Advance-able and Refundable

This is a fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This Employee Retention Credit applies to qualified wages paid after March 12, 2020, and before January 1, 2021. The maximum amount of qualified wages taken into account with respect to each employee for all calendar quarters is $10,000, so that the maximum credit for an Eligible Employer for qualified wages paid to any employee is $5,000.

PAYROLL TAX DEFERMENT
Deferral of 6.2% payroll tax employer portion until 2021 in order to free up cash
CANNOT BE USED WITH PPP, just ERTC or alone

UNEMPLOYMENT
Extra $600 on top of your unemployment.
No extra paperwork is required when you apply for unemployment.

EXPRESS BRIDGE LOAN
Essentially a line of credit. Not a great deal.
Through SBA Lender
Maximum loan $25,000 7 years
6.5% over prime
Collateral is not required
Can be paid off with proceeds from the EIDL
6 Month deferral on fees

ECONOMIC INJURY DISASTER LOAN:
$10,000 advance does not have to be paid back and will forgiven if spent on operating expenses and payroll

Eligible for those without employees who use 3rd parties to care for horses

Loans offered directly through the SBA

DIRECT FROM SENATOR TOM O’MARA:
Recently, the Federal government changed the provisions for the CARES Act to include economic relief for agriculture and farms like yours. I suggest everyone apply for both the Paycheck Protection Program and the Economic Injury Disaster Loan.

Previously, farms and those who generate ⅓ from gambling not currently eligible. SBA regulations are completely separate from CARE Act

Average gross receipts are based on a 3 year period

THERE IS NO MINIMUM CREDIT SCORE. But they will check personal credit history.

If the loan request is denied, the applicant will be given up to six months in which to provide new information and submit a written request for reconsideration

Email Updates: Sign up at
https://disasterloan.sba.gov/NY
You can use whatever YOUR STATE’S abbreviation instead of NY

Get in touch with resource partners
www.sba.gov/local-assistance