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Aug 04, 2020

Everything You Need to Know About Federal COVID-19 Resources

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Months later and the Coronavirus pandemic is still ravaging on. This is not just a public health crisis, but an economic one as well and businesses -- small and large alike -- require financial assistance. With a growing demand for aid, more resources have been established, replenished, and made available to businesses in need. 

We've spent some time breaking down everything you need to know about federal COVID-19 resources and how they can help your business stay afloat through the COVID-19 pandemic.

 

Federal Resources For Small Businesses

Paycheck Protection Program (PPP)

What is it?


Part of the economic stimulus package passed in March, includes the $349 billion U.S. Small Business Administration’s Paycheck Protection Program that provides partially forgivable, low-interest loans. 

Loans can be used to offset operating costs including payroll, retirement benefits, mortgage/rent, and utilities. The PPP was established to help small businesses stay afloat, retain their employees, rehire laid-off workers, and cover necessary expenses during this economic recession. 

Who is eligible? 

Businesses that have fewer than 500 employees and meet the requirements for the 7(a) loan program or the North American Industry Classification System (NAICS) code-based size standards are eligible to apply for the PPP loan. 

What is the deadline to apply?

The deadline has been extended to August 8. 

Please reference this guide and checklist for more information.

Economic Injury Disaster Loan (EIDL)

What is it?

The U.S. Small Business Administration’s EIDLs provide the necessary working capital to help small businesses and nonprofits survive until normal operations are able to resume after a disaster ends. While this loan has been around for some time, this financial tool is readily available for business owners. Qualifying businesses are eligible for 3.75 percent low interest loans.

The EIDL also offered up to a $10,000 grant that did not need to be repaid. As of July 13, the funding for the advance grant has run out. However, it is possible that it may be revived, so please check the EIDL site for the most-up-to-date information. 

Who is eligible?

Like many other SBA programs, the EIDL is for businesses with fewer than 500 employees. And good news - Independent contractors and sole proprietors can also apply for this one.

Business owners can apply for both the EIDL loan and the PPP loan, as long both loans are not used for the same expenses. 

What is the deadline to apply?

The application deadline is December 31, 2020.

Please refer to the U.S. Chamber of Commerce’s EIDL Guide for more information.

Express Bridge Loan (EBL)

What is it?

The pilot program enables small businesses who already have an existing business relationship with an SBA Express Lender to access an expedited emergency loan of up to $25,000 for disaster-related purposes. The program allows Small Business Administration Express Lenders' authority to deliver expedited SBA-guaranteed financing. Eligible businesses are expected to receive funding within 45 days of approval. 

Who is eligible?

Small business are eligible for the EBL loans under the COVID-19 Emergency Declaration if they are located in any state, territory and the District of Columbia that have been adversely impacted by the COVID- 19 emergency.


What is the deadline to apply?

The application deadline is March 13, 2021.

Please refer to the program guide for more information.

Coronavirus resources

Employee Retention Tax Credit

What is it?

The Employee Retention Tax Credit is another Small Business Administration Program that is part of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The new employee retention tax credit is a 50 percent tax credit for the first $10,000 of compensation, including the employer portion of health benefits, for each eligible employee.

Who is eligible?

The program is available to employers who are closed, partially closed, or experiencing significant revenue losses as a result of COVID-19. Private employers, including non-profits, that have experienced a decline in gross receipts by more than 50 percent in a quarter compared to the same quarter in 2019 can receive the employee retention tax credit. 

Note that businesses that receive a Paycheck Protection Program (PPP) loan are not eligible for the tax credit. 

What is the deadline to apply?

The application deadline is January 1, 2021.

Families First Coronavirus Response Act (FFCRA)

What is it?

The Department of Labor’s FFCRA requires certain employers to provide their employees with paid sick leave or expanded family and medical leave for specified reasons related to COVID-19.

The Act expands paid leave benefits in two ways: emergency paid sick leave (COVID -PSL) and extended family medical leave (EFMLA) and provides employers with tax breaks designed to offset the costs of providing paid leave.

The Act provides that employees of covered employers are eligible for the following:

  • Two weeks (up to 80 hours) of paid sick leave at the employee’s regular rate of pay where the employee is unable to work because the employee is quarantined;
  • Two weeks (up to 80 hours) of paid sick leave at two-thirds the employee’s regular rate of pay because the employee is unable to work because of a bona fide need to care for an individual subject to quarantine; and
  • Up to an additional 10 weeks of paid expanded family and medical leave at two-thirds the employee’s regular rate of pay.

Who is eligible?

Any covered employee that has been employed for at least 30 days and requires sick leave or expanded family and medical leave for specified reasons related to COVID-19.

Employers with 500 employees or fewer are eligible for this small business exemption however, businesses with fewer than 50 employees can be exempted under certain circumstances that jeopardize the success of their business.

What is the deadline to apply?

These provisions will apply from the effective date through December 31, 2020.

COVID-19 financial resources

Federal Resources For Businesses of All Sizes

 

Main Street Loan Program

What is it?

The Main Street Loan Program is a resource administered by the Federal Reserve Bank of Boston. The program is designed to help credit flow to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 crisis, but now need loans to help maintain their operations until they have recovered from, or adapted to, the impacts of the pandemic. 

Loans originated under the program have a variety of features that aim to help businesses endure the economic challenges posed by COVID-19. The program offers 5-year loans, with floating rates, and principal and interest payments deferred to assist businesses facing temporary cash flow interruptions. 

The loans range in size from $250,000 to $300 million to support a broad set of employers. Businesses should apply through their current lender. 

Who is eligible?

Businesses with 15,000 employees or less, or with revenue of $5 billion or less and are experiencing financial hardship as a result of COVID-19 are qualified to apply. 

What is the deadline to apply?

The application deadline is September 30, 2020.

You can learn more about the Main Street Loan Program and its requirements here.

Employee Retention Tax Credit

What is it?

The Treasury Department and the Internal Revenue Service (IRS) launched the Employee Retention Credit, designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.

Who is eligible?

Qualifying employers must fall into one of two categories:

  1. The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter; or
  2. The employer’s gross receipts are below 50 percent of the comparable quarter in 2019. Once the employer’s gross receipts go above 80 percent of a comparable quarter in 2019 they no longer qualify after the end of that quarter.

Note: As more resources become available, we will continue to add and update this section to provide the most accurate and up-to-date information.

What is the deadline to apply?

The application deadline is January 1, 2021.

We're here to help

Running a small business under 'normal' circumstances is difficult enough. During a pandemic, it's even harder.  Ever situation is unique. We hope these resources are helpful as you navigate these uncertain times. 

Note: As more resources become available, we will continue to add and update this section to provide the most accurate and up-to-date information.

 

Gillian Wilson
By Gillian Wilson
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