Coronavirus Recovery

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***June 2020 South Florida SBA Updates:

The 2020 Atlantic hurricane season runs from June 1 - November 30; now is the time to prepare your business. Of course, many business owners are focused on getting through the pandemic. Nevertheless, I encourage you to check out the  various resources at www.Ready.gov that can help you "Plan Ahead" for Disasters. 

I also invite you to join the South Florida SBA District Office for their disaster preparedness webinars that will be held in English and Spanish and will include time for question and answer sessions. Click here to view the calendar of events and register for upcoming webinars.

Check them out on social media:

Small Business Administration Loans

I have been hearing from small business owners and entrepreneurs about the negative impact that this pandemic is having on their bottom line and I urge them to reach out to SBA disaster assistance customer service center immediately.

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain nonprofits and other employers. Below, please find information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA.  To keep up to date on when these programs become available, please stay in contact with your local Small Business Administration (SBA) District Office, which you can locate here

Please find a full guide to SBA programs and initiatives here

Do you need...

Capital to cover the cost of retaining employees? Try the Paycheck Protection Program

To ease your fears about keeping up with payments on your current or potential SBA loan? The Small Business Debt Relief Program could help.

A grant to cover current business expenses? You might want to look into an Emergency Economic Injury Grant.

Advice for government contractors?

Looking for resources for employee retention benefits? Try Small Business Tax Provisions

A quick infusion of a smaller amount of cash to cover you right now? Look into the Florida Emergency Bridge Loan Program

Free counseling to help you navigate this uncertain economic time? The resource partners might be your best bet. 


Paycheck Protection Program

 
Notice: Paycheck Protection Program closed August 8, 2020

Current law dictates that the Paycheck Protection Program (PPP) close at the end of August 8, 2020. As such, SBA is no longer accepting PPP applications from participating lenders


Small Business Debt Relief Program


This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law.

This relief is not available for Paycheck Protection Program loans or Economic Injury Disaster loans. Borrowers do not need to apply for this assistance. It will be automatically provided as follows:

  • For loans not on deferment, SBA will begin making payments with the next payment due on the loan and will make six monthly payments.
  • For loans currently on deferment, SBA will begin making payments with the next payment due after the deferment period has ended, and will make six monthly payments.
  • For loans made after March 27, 2020 and fully disbursed prior to September 27, 2020, SBA will begin making payments with the first payment due on the loan and will make six monthly payments.

Additional Debt Relief

For current SBA Serviced Disaster (Home and Business) Loans: If your disaster loan was in “regular servicing” status on March 1, 2020, the SBA is providing automatic deferments through December 31, 2020.

What does an “automatic deferral” mean to borrowers?

  • Interest will continue to accrue on the loan.
  • 1201 monthly payment notices will continue to be mailed out which will reflect the loan is deferred and no payment is due.
  • The deferment will NOT cancel any established Preauthorized Debit (PAD) or recurring payments on your loan.  Borrowers that have established a PAD through Pay.Gov or an OnLine Bill Pay Service are responsible for canceling these recurring payments.  Borrowers that had SBA establish a PAD through Pay.gov will have to contact their SBA servicing office to cancel the PAD.
  •  Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply those payments normally as if there was no deferment.
  • After this automatic deferment period, borrowers will be required to resume making regular principal and interest payments.  Borrowers that cancelled recurring payments will need to reestablish the recurring payment.

If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your Loan Servicing Office directly using the following information:

  • Birmingham Disaster Loan Servicing Center:
    • Phone: 800-736-6048
    • Email: BirminghamDLSC@sba.gov
  • El Paso Disaster Loan Servicing Center:
    • Phone: 800-487-6019
    • Email: ElPasoDLSC@sba.gov


Economic Injury Disaster Loans & Emergency Economic Injury Grants

On June 15, SBA resumed accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses, including agricultural businesses (with 500 or fewer employees ), and non-profit organizations.

The SBA is offering low interest federal disaster loans for working capital to small businesses and non-profit organizations that are suffering substantial economic injury as a result of COVID-19 in all U.S. states, Washington D.C., and territories.

  • These loans may be used to pay debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact, and that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75% for small businesses.  The interest rate for non-profits is 2.75%.
  • To keep payments affordable for small businesses, SBA offers loans with long repayment terms, up to a maximum of 30 years. Plus, the first payment is deferred for one year.
  • In addition, small businesses and non-profits may request, as part of their loan application, an EIDL Advance of up to $10,000. The EIDL Advance is designed to provide emergency economic relief to businesses that are currently experiencing a temporary loss of revenue.  This advance will not have to be repaid, and small businesses may receive an advance even if they are not approved for a loan.
  • SBA’s EIDL and EIDL Advance are just one piece of the expanded focus of the federal government’s coordinated response. 

EIDL Advance Discontinued

Note: All available funds for the EIDL Advance program have been allocated. By law, SBA is not able to issue EIDL Advances once program funding has been obligated and is no longer available. EIDL loan applications will still be processed even though the Advance is no longer available.

If your small business has been affected and you would like to apply for a loan, here is what you can do:

  1. Check to see if you are in an eligible area for Economic Injury Disaster Loans. The State of Florida is currently eligible.
  2. Small businesses in Florida may apply for an Economic Injury Disaster Loan online at: https://covid19relief.sba.gov/#/ or they can reach out to their local SBA District Office.
  3. If your small business needs help with a loan application, Small Business Development Centers (SBDC) can assist with the application process. The link of SBDCs is available here.

What is the timeline like?

Once a borrower submits an application, approval timelines depend on volume. Typical timeline for approval is 2-3 weeks and disbursement can take up to five days. Borrowers are assigned individual loan officers for servicing of the loan.

Where can I find more information?

For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail disastercustomerservice@sba.gov. You can also get help from Florida SBDC at FIU here.


Government Contractors

If you are a government contractor, there are a number of ways that Congress has provided relief and protection for your business. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave. The contractors eligible are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19.
 
If you need additional assistance, please reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter, or SBA District Office. You should also work with your agency’s contracting officer, as well as the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU).


Small Business Tax Provisions

Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship

 
This provision would provide a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis. 
 
Wages of employees who are furloughed or face reduced hours as a result of their employer’s closure or economic hardship are eligible for the credit. For employers with 100 or fewer fulltime employees, all employee wages are eligible, regardless of whether an employee is furloughed. The credit is provided for wages and compensation, including health benefits, and is provided for the first $10,000 in wages and compensation paid by the employer to an eligible employee. Wages do not include those taken into account for purposes of the payroll credits for required paid sick leave or required paid family leave, nor for wages taken into account for the employer credit for paid family and medical leave (IRC sec. 45S). 
 
• The credit is not available to employers receiving assistance through the Paycheck Protection Program. The credit is provided through December 31, 2020.
 

Delay of Payment of Employer Payroll Taxes
 
This provision would allow taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability.
 
• Deferral is not provided to employers receiving assistance through the Paycheck Protection Program.

Key details, background information and examples of how the credits will work are in IRS News Release 2020-57: Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave.


Upcoming/Past Tutorials and Webinars:

 
SBA:

Youtube Link: https://www.youtube.com/watch?v=mT3W1P9fszk

SBDC:

Title: Coronavirus (COVID-19) Business Information & Resources (Webinar)
Youtube Link: https://www.youtube.com/watch?v=mT3W1P9fszk