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United States Small Business Response Plan

March 25, 2020

To our US customers,

Below we have pulled together some helpful resources for small business and entrepreneur relief options from the federal government. We hope this information can offer some benefit to you and your team during this difficult time. Some of the items on the list may not apply to your situation, but taking advantage of 1 or a few forms of relief could significantly improve your financial health.

Latest Updates:

April 2

Paycheck Protection Loan Program Updates:

  • Money is scheduled to begin being disbursed Friday, April 3.
  • Apply through any federally-insured bank, credit union, or farm credit system institution (not a traditional SBA lender), and most businesses will be applying online through a bank’s website.
  • You don’t need collateral, but you’ll need to document payroll, rent, mortgage interest and utility expenses. -Forgiveness is expected to be calculated after June 30 for the period of Feb 15 to June 30, 2020.

We also love this resource created by our friends at Bench: What is the Paycheck Protection Program? (A Simple Guide). They also have pulled together a list of relief available at the state level. Check it out here: State by State Resources

SBA Loan Program Update:

  • Note: A company that gets a disaster loan cannot use the money for payroll purposes if it’s also getting a Paycheck Protection Loan, as described above.

April 1

  • Payment Protection Program: forgivable loans for small business
  • Added tax credits for self-employed: Sick Leave Credit and Family Leave Credit
  • Contractors & self-employed now qualify for UI (and other UI updates)
  • Many details on federal student loan relief

Basic Response Plan

1. $1200 Checks to 2018 & 2019 Taxpayers

A $2 trillion aid package was approved by the House of Representatives and signed by the President on March 27.

As part of this package, most Americans can qualify to receive $1200, with funds for small businesses and unemployment insurance.

The original legislation was amended to also allow low-income individuals to qualify for the full $1200 ($2400) for joint returns.

To qualify, you must have filed tax returns in either 2018 or 2019 or receive Social Security or veterans’ benefits so the Internal Revenue Service can calculate the rebate.

This package is meant to give people relief right now.

These payments are expected to automatically start going out in the next three weeks to most Americans who filed individual tax returns in 2018 or 2019.

2. Tax Credits for the Self-Employed

Sick Leave Credit

If you get sick with COVID-19, you can qualify for up to 10 days sick leave compensation.

Family Leave Credit

Covers up to 50 days away from work and can be used for any reason similar to an employee qualifying for family leave related to COVID-19.

A lot more information and details can be found at: IRS Tax Credit page.

3. Apply for a Federal Disaster Loan

Paycheck Protection Program Loans

  • They are “forgivable” — meaning that owners get to keep the money if they use it to keep paychecks going to people earning up to $100,000 a year, or for monthly rent (or mortgage) and utilities.
  • If the money is used for anything else, the borrower has 10 years to repay, at 4%
  • Money is scheduled to begin being disbursed Friday, April 3.
  • Apply through any federally-insured bank, credit union, or farm credit system institution (not a traditional SBA lender), and most businesses will be applying online through a bank’s website.
  • You don’t need collateral, but you’ll need to document payroll, rent, mortgage interest and utility expenses. -Forgiveness is expected to be calculated after June 30 for the period of Feb 15 to June 30, 2020.

We also love this resource created by our friends at Bench: What is the Paycheck Protection Program? (A Simple Guide).

SBA Loans

  • The SBA is offering low-interest federal disaster loans up to $2 million for small businesses affected by COVID-19.
  • Note: SBA loans are not forgivable.
  • Note: A company that gets a disaster loan cannot use the money for payroll purposes if it’s also getting a Paycheck Protection Loan, as described above.

Additional Loan Options

  • The Federal Reserve is expected to announce more loan options.
  • Individual states and cities may have loans as well. Jane is working on gather information at the provincial and state level.

Here’s what the Small Business Administration is saying:

The U.S. Small Business Administration is offering designated states and territories low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of Coronavirus (COVID-19).

A list of areas eligible, and information on how to apply can be found here: SBA Disaster Assistance COVID-19

and here: COVID-19 Small Business Guidance Loan Resources

Full announcement can be found here: SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)

4. Apply for Unemployment Insurance

The US has extended unemployment insurance program and expands eligibility.

Highlights

  • workers get an additional $600 per week for four months, on top of what state programs pay.
  • extended UI benefits through Dec. 31 for eligible workers
  • 13 additional weeks for UI
  • contractors and self-employed now qualify

From the Department of Labor:

The federal government is allowing new options for states to amend their laws to provide unemployment insurance benefits related to COVID-19.

For example, federal law allows states to pay benefits where:

  • An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work;
  • An individual is quarantined with the expectation of returning to work after the quarantine is over; and
  • An individual leaves employment due to a risk of exposure or infection or to care for a family member.

In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.

For more information and to search the available UI programs, use the Unemployment Benefits Finder linked below to select your state:

Unemployment Benefits Finder

5. Federal Government Disaster Relief

Find benefits you can access across federal government agencies in response to COVID-19 here:

COVID-19 Benefits

6. Guidance and Resources for Businesses, Employers and Workers

We recommend checking out this resource from the CDC with guidance for businesses on how to plan, prepare and respond to COVID-19.

Access this resource here: Interim Guidance for Businesses and Employers

The U.S. Chamber of commerce has also compiled a toolkit with recommendations for businesses and workers. Inside the toolkit you’ll find sharable graphics and key messages based on the CDC’s latest guidance for businesses and employees.

You can access the toolkit here: Coronavirus Response Toolkit

7. Mortgage Relief (if your bank supports it)

Many banks across the country are realizing that if they pause the monthly mortgage payment requirement for a limited amount of time, that could free up 50-60% of a household’s income. That could be a huge help right about now!

Be sure you have a look at Bank of America’s commitment if your mortgage is through them. We’re seeing that they are allowing small businesses to request payment deferments and to take advantage of several other relief tools.

We’ve also heard that Ally Bank is offering deferred mortgage payments.

And other banks are starting to follow suite. Doesn’t hurt to give ‘em a call.

8. Tax Filing Extension

The IRS confirmed that Tax Day for the 2019 tax year is July 15, 2020.

Federal income tax payments that are due on April 15 can also be deferred until July 15 without penalties or interest, and this is true for all taxpayers.

This is an automatic federal tax filing and payment relief so you do not need to file any additional forms, and you do not need to call the IRS.

Individuals who need additional time beyond July 15 can request a filing extension using Form 4868.

However, if you think you are due a refund, the IRS wants you to file as soon as possible, and their goal is to issue refunds within 21 days.

You can read the official announcement from the IRS here: Tax Day now July 15.

More information is available here: Coronavirus Tax Relief

9. Federal Student Loan Relief

Highlights

  • Federal loan payments deferred until Sept. 30, 2020
  • Collection against borrowers who were already behind on payments will be suspended
  • Students who leave school now because of COVID-19 may be able to have their loan obligations cancelled
  • Students who
  • Students in work-study programs will still be paid
  • If an employer pays some of your student loan debt through the end 2020, up to $5,250 of that benefit won’t be taxed

A nice overview is: Coronavirus and Forbearance

10. Facebook Grants

Facebook is offering $100 million in cash grants and ad credits for up to 30,000 eligible small businesses over 30 countries. Stay tuned here for more information:

Facebook Grants

Please reach out and say hello if you have any questions or use the buttons below to share if you know someone else would benefit from this information.

Financial Relief By State

Our friends at Bench also pulled together some relief available at the state level: COVID-19 Financial Resources for Small Businesses, State by State.

Sign Up with Bench using this link and receive 20% off your first 6 months.

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