By Niki Tudge
Below is a broad summary of the various types of assistance and relief the recently passed legislation may provide you and your business. The situation is constantly changing so this summary is meant only as a general guide. Please check with your local authorities and your accountant for guidance specific to you and your situation.
Assistance in the form of Loans:
The “Keeping American Workers Paid and Employed Act” provides loan support for:
- Small employers with 500 employees or fewer plus businesses that meet current Small Business Administration (SBA) size standards.
- Self-employed and ‘gig’ economy individuals
- Some non-profits
Fees for SBA loans are waived with automatic deferral of payments for one year with NO prepayment penalties. The amount of these loans would be equal to 250% of employer’s average monthly payroll up to $10 million. Covered payroll costs under the loan program include up to $100,000 of salary, wages, payment of cash tips. Also, employee group health care benefits, insurance premiums, retirement contributions and covered leave would qualify.
SBA loans are supposed to be available immediately but reports indicate the SBA system is so overloaded that many are having trouble getting to the SBA website. You may want to try your bank first to see if they participate in SBA loan programs. The SBA is adding more banks to handle the overload and they are trying to streamline the process. The are also offering express loans of up to $1 million which provides for a line of credit small businesses can use for working capital.
- SBA Disaster loans. You can apply for up to $2 million at 3.75% interest fixed for up to 30 years. Determine if you’re eligible here.
- New SBA loan. You can apply online through the SBA here.
- Existing SBA loan. If you have an existing SBA loan, your bank may be able to provide a loan modification to help, including additional capital or deferred payment options. You can contact your lender directly to see what options are available to you and your business.
Assistance in the form of Grants
The Keeping American Workers Paid and Employed Act provides assistance for entrepreneurs:
- $265 million is provided in the bill for grants through SBA partners such as Small Business Development Centers and Women’s Business Centers. Contact the SBA or your local development centers and business centers for more details.
- An additional $10 million is being provided to the Minority Business Development Agency (https://www.mbda.gov/) who will provide services through Minority Business Centers and Minority Chambers of Commerce.
- EIDL Emergency Grants – This is another SBA program – Economic Injury Disaster Loans – this system lets the SBA provide small dollar loans or emergency grants to maintain payroll, provide paid sick leave and pay other debts.
Assistance in the form of Debt Relief
- The SBA will pay all principal, interest and fees on all existing SBA loans for six months.
Assistance in the form of local relief and unemployment insurance
It is important that you also contact your local city, county and state offices for assistance and relief. The pertinent local agency and/or program will vary greatly for each local jurisdiction. Remember that direct payments to tax filers, under this legislation, with valid Social Security Numbers (some exceptions apply for military) will be sent out soon. Most adults will get $1,200 up to a certain income limit ($75,000 single adults/ $150,000 married couples with no children) beyond which what you receive sill be reduced until it stops for single adults earning $99,000 or married couples who have no children earning $198,000. For every qualifying child age 16 or under, you may be paid an additional $500 per child. As it now stands this is a one time payment though Congress may authorize additional payments in the future. Your adjusted gross income is found on Line 8b of your 2019 1040 federal tax return – If you haven’t prepared a tax return yet, you can use your 2018 return).
Unemployment benefits for eligible workers will be increased by $600 per week on top of your state benefit. Some states are more generous than others. Self-employed people are newly eligible for unemployment benefits calculated based on previous income using a Disaster Unemployment Assistance program calculation. Self-employed workers will also be eligible for the additional $600 weekly benefit provided by the federal government. Benefits will be extended to part-time workers who may have been previously ineligible for benefits. This will vary by state but you will also be eligible for the additional federal $600 weekly benefit.
There are many other aspects to this bill including borrowing from your 401(K)/IRA, daycare and student loans. Depending on your specific situation you should not hesitate to seek advice from your accountant, lawyer and elected officials. Stay safe and keep healthy.
PPG is providing ongoing support to its members during the current pandemic. Click here for your up-to-date business contingency planning support.
About the Author
Niki Tudge PCBC-A AABP-CDBT AAPB – CDT is founder and president of the Pet Professional Guild, The DogSmith, a national dog training and pet care license, and DogNostics Career Center, and president of Doggone Safe. She has business degrees from Oxford Brookes University, UK and has achieved her DipABT and DipCBST. Recently, she has published People Training Skills for Pet Professionals – Your essential guide to engaging, educating and empowering your human clients, Training Big for Small Businesses, and A Kid’s Comprehensive Guide to Speaking Dog, and co-authored Pet Training and Behavior Consulting: A Model for Raising the Bar to Protect Professionals, Pets and their People.