SBA Loans Quick Summary

• Who can apply for an EIDL loan
• Applying for an EIDL loan
• Points of Contact
• Private Company Programs

Coronavirus Aid, Relief, and Economic Security (CARES) Act.

CARES Act Quick Summary

1. The bill contains more than $2 trillion in funds in total for businesses, corporations, and individuals.
2. $370 billion is earmarked for SMBs through the Keeping Workers Paid and Employed Act provision. Loans will max out at the lesser of $10 million or 250% of the average total monthly payroll for the last year. Loans will be forgiven for businesses that use the money to keep workers on the payroll.
3. To qualify for these loans, businesses must have fewer than 500 employees. Portions of loans used to pay employees, rent, mortgage payments, and utilities over an eight-week period, starting from the date the loan is paid, will be forgiven.
4. Businesses need to have been operating as of Feb 15, 2020.
5. Businesses can also defer payroll taxes for 2020, instead of paying 50% in 2021 and 50% in 2022.
6. Loans will be paid out by private lenders (e.g. banks, credit unions) and guaranteed by the Small Business Administration.

U.S. Treasury CARES Act Website

Small Business Paycheck Protection Program (PPP)

The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. The loan amounts will be forgiven as long as:

• The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8-week period after the loan are made.
• Employee and compensation levels are maintained.

Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to the likely high subscriptions, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.

Loan payments will be deferred for 6 months.

Who can apply?

All businesses with 500 or fewer employees can apply, including nonprofits, veterans organizations, Tribal business concerns, sole proprietorship, self-employed individuals, and independent contractors.

When to apply

April 3, 2020: small businesses and sole proprietorship
April 10, 2020: independent contractors and self-employed individuals
June 30, 2020: application deadline

Where to apply

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.

How to apply

Complete the Paycheck Protection Program loan application and submit it with the required documentation to an approved lender that is available to process your application by June 30, 2020. In most instances, the quickest path is to fill out the online forms early and to work with your existing banking partner.

For full details, download the Paycheck Protection Program Information Sheet.

Tax Provisions for Small Businesses

• Employee Retention Tax Credit: This provision provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19-related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year.
• Employer Payroll Tax Delay: This provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees.
• Modification For Net Operating Losses: This provision relaxes the limitations on a company’s use of losses. Net Operating Losses (NOL) is currently subject to a taxable-income limitation, and they cannot be carried back to reduce income in a prior tax year. The provision provides that an NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years.
• Modification of Limitation On Business Interest: The provision temporarily increases the amount of interest expense businesses are allowed to deduct on their tax returns, by increasing the 30-percent limitation to 50 percent of taxable income (with adjustments) for 2019 and 2020.

Individual Taxpayer and Unemployment Relief

• Recovery Rebates: One-time checks of $1,200 to Americans with adjusted gross income up to $75,000 for individuals and $150,000 for married couples. Individuals and couples are eligible for an additional $500 per child.
• Pandemic Unemployment Assistance: Temporary Pandemic Unemployment Assistance program through December 31, 2020, to provide payment to those not traditionally eligible for unemployment benefits (self-employed, independent contractors, those with limited work history, and others) who are unable to work as a direct result of the coronavirus public health emergency.
• Increased Unemployment Benefits: An additional $600 per week payment to each recipient of unemployment insurance or Pandemic Unemployment Assistance for up to four months.
• Paid Leave Provisions: Limits employer-paid leave obligations to no more than $200 per day and $10,000 in aggregate for each employee covered. Caps for emergency paid sick leave are $511 per day and $5,110 in aggregate per employee. Employees laid off after March 1, 2020, are required to have access to paid family and medical leave if they are rehired by the employer. The bill allows employers to receive an advance payroll tax credit for required paid sick leave.

Links

• CARES Act
• Tax Benefit Information

SBA Economic Injury Disaster Loans (EIDL) & Loan Advance for COVID-19.

On March 6, the U.S. Congress passed a COVID-19 preparedness and response supplemental funding bill that designated COVID-19 as a disaster under the Small Business Administration (SBA) and provided $20 million to support the SBA’s administration of loan subsidies to small businesses of up to $2 million per loan.

On March 27, Congress passed the CARES Act, adding $10 billion to the loan program and waiving or relaxing several loan eligibility requirements.

SBA Loans Quick Summary

1. Small business owners in all U.S. states, Washington D.C., and territories are eligible.
2. Loans offer up to $2 million in assistance.
3. The SBA will make $10,000 advances to applicants within 3 days of applying to support payroll, sick leave, and other debt obligations; these amounts are not subject to repayment obligations.
4. Loans for businesses will have an interest rate of 3.75% and for nonprofits a rate of 2.75%.
5. SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
6. Loans can be approved based on a credit score; tax returns are no longer required.
7. For loans under $200,000, the requirement for personal collateral is waived.
8. For existing SBA loans, the government is providing $17 billion to pay all principal, interest, and fees, for six months, to small businesses negatively impacted by COVID-19.
9. SBA loans may be subject to other rules; check the SBA website for the most current program information.

Who can apply for an EIDL loan?

Small businesses, startups, nonprofits, sole-proprietors, and freelancers.

Qualifying for an EIDL loan

Be sure to consult the EIDL loan application forms for specific requirements, but in general, you must:

• be a registered for-profit business
• be physically located and operates in the U.S. or its territories
• have invested your own time or money into the business

Applying for an EIDL loan

You can apply online on the SBA Disaster website. You’ll need the following:

• Business plan
• The amount and proposed use of funds
• Credit history
• Financial projections, and how you will pay back the loan
• Collateral, such as a home, car, inventory, or other property you own, for loans over $200,000
• Industry experience, while not required, can drive lender confidence

Additional Resources

Disaster Assistance Application
SBA Disaster Playbook

Points of Contact

For additional information, please contact the SBA disaster assistance customer service center:
Call 1-800-659-2955 (TTY: 1-800-877-8339)
E-mail disastercustomerservice@sba.gov

Private Company Programs.

Bacardi #RaiseYourSpirits Campaign

$3 million in relief to bars and restaurants affected by the COVID-19 shutdowns.

Facebook Small Business Grants Program

Facebook is offering $100M in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries.

GoFundMe Small Business Relief Fund

The GoFundMe.org Small Business Relief Fund will provide micro-grants to qualifying small businesses negatively impacted by the COVID-19 pandemic. The Small Business Relief Fund is part of the Small Business Relief Initiative: a program supported by GoFundMe, Yelp, and Intuit QuickBooks. The Small Business Relief Initiative will supply financial assistance and support to businesses across the country by providing grants, tools, and resources to help during the crisis.

Kiva Lending

U.S. applicants for a Kiva loan have access to expanded eligibility for a Kiva loan, loans up to $15,000 at 0% interest, and a grace period for new borrowers of up to 6 months.

Once you complete the application, a member of the Kiva U.S. team will reach out to you to better understand your business and ask any follow-up questions within 10 – 15 business days. Submitting a great photo and business story will help your application make it through the review process more quickly.

Qualifications:

• You and your business must be based in the United States.
• You must be over 18 years old.
• You must be using the loan for business purposes.
• Your business must not be engaged in any of the following activities: multi-level marketing / direct sales; illegal activities (e.g. gambling, scams); or pure financial investing (e.g. stocks)
• You cannot currently be in foreclosure, bankruptcy, or under any liens.
• You must be willing to demonstrate your social capital by having a small number of your friends and family make a loan to you.

How quickly can I get funded?

Once your loan is approved for fundraising, you will have 15 days to raise support from your own network during the Private Fundraising Period, and then 30 days to publicly fundraiser with Kiva’s wider network of lenders.

Apply

More info

Shopify Small Business Financing

$200 million in small business funding via Shopify Capital.

More info

Verizon Small Business Recovery Fund

Thanks to a $2.5 million investment from Verizon, Local Initiatives Support Corporation (LISC) is offering grants to help small businesses fill urgent financial gaps until they can resume normal operations or until another more permanent financing becomes available.

Apply

Business for All.

Apply for grants up to $50,000 to support business growth, including $10,000 emergency COVID-19 Business for All Grants to help small businesses in crisis. Join leaders such as Gwyneth Paltrow, Kristen Bell, Lisa Price, and Zaw Thet to empower every American with an entrepreneurial spirit.

$10,000 COVID-19 Business for All Grants is awarded on a rolling basis. General Business for All Grant applications is due September 25, 2020, at 12:00, am PT.

• $250,000 in growth grants will be awarded to Business for All applicants, as a critical step towards tackling entrepreneurs’ single greatest barrier to success: access to capital.

Access the COVID-19 Business Resource Center:

Freelancers Relief Fund Application.

As shutdowns to contain the spread of the coronavirus takes place across the U.S., independent workers face the greatest threat to their livelihoods in modern history. Freelancers work without traditional protections such as paid sick leave and unemployment insurance and are at a disproportionate risk of financial hardship in the best of times. At the same time, the makeup one-third of the U.S. workforce and contribute more than $1 trillion to the country’s GDP.

While we work toward securing government aid, freelancers’ bills are coming due now. Rent must be paid, groceries, utilities — for those who live gig-to-gig, these necessities are at risk. Your donation to the Freelancers Relief Fund, through our nonprofit subsidiary working, Today, will provide grants to freelancers experiencing economic hardship or health crisis as a result of COVID-19.

Freelancers Relief Fund will offer financial assistance of up to $1,000 per freelance household to cover lost income and essential expenses not covered by government relief programs, including:

• Food and food supplies.
• Utility payments.
• Cash assistance to cover income loss.
• 100% of all donations will be distributed directly to freelancers in need.

List of Arts Resources During the COVID-19 Outbreak.

As COVID-19 continues to spread across the United States, we have created a list of resources for artists, photographers, and videographers working in all disciplines, as well as arts philanthropists, and arts professionals.

Maryland COVID-19 Business Assistance Programs and Grants:

Federal and State Programs have been established to help businesses survive the Covid-19 public health emergency. Montgomery County businesses are encouraged to research these programs and apply them to any for which they are eligible.