Has your small business been hurt by the COVID-19 pandemic? You may be eligible for financial assistance through the federal or state government.
There are many resources available and it can be overwhelming to try to figure out what you need and what you qualify for so we put together this page to try to streamline resources and help you apply for the assistance you need.
Struggling to get started? The following questions might help point you in the right direction. Do you need:
- Capital to cover the cost of retaining employees? Then the Paycheck Protection Program might be right for you.
- A quick infusion of a smaller amount of cash to cover you right now? You might want to look into an Emergency Economic Injury Grant.
- To ease your fears about keeping up with payments on your current or potential SBA loan? The Small Business Debt Relief Program could help.
- Up to $25,000 with less paperwork and already have a business relationship with an SBA Express Lender? Try the SBA Express Bridge Loan program.
- Just some quality, free counseling to help you navigate this uncertain economic time? The resource partners might be your best bet.
Here’s what you need to know about each of the programs including who qualifies for a loan, the basic terms and conditions, and how to apply for one.
Paycheck Protection Program (PPP) Loans
According to the US Chamber of Commerce, “small businesses, nonprofits, tribal-business concerns that meet the SBA’s standard business size definition, and veterans organizations organized under 501(c) (19) with fewer than 500 employees are eligible for loans under the program. Self-employed individuals, independent contractors and sole-proprietors are also eligible. To receive a loan your company must have been in business as of Feb. 15, 2020.”
If your business falls into one of those categories, then the next step is to find an SBA-approved lender. The Small Business Administration has a network of over 1,800 approved lenders that process business loans. Click here to see if your bank is an approved lender or to find one near you.
The new loans apply to costs incurred between Feb 15, 2020-June 30, 2020 and can be used to cover payroll costs, mortgage and rent payments, health care benefits for employees including but not limited to paid sick leave. In some cases, it can also cover interest on other debts your business may have.
Under the Paycheck Protection Program, loan payments will be deferred for 6 months and eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount. All loans will have a maturity of two years and an interest rate of 0.5%. Borrowers should expect that 75% of the amount forgiven must be used to cover eligible payroll costs. Thus, only 25% of the forgiven amount may be used for rent, utilities, and interest on mortgage. See Treasury Guidance here.
If you maintain your workforce, the SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses covering loan origination. Click here to learn more about PPP loans.
Economic Injury Disaster Loans (EIDL) and Emergency Economic Injury Grants
The program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
Those eligible for an EIDL must have 500 or fewer employees. This can include sole proprietorships, with or without employees, independent contractors, cooperatives and employee owned businesses, tribal small businesses and small business concerns and small agricultural cooperatives that meet the applicable size standard for SBA, as well as most private nonprofits of any size.
To see if your business meets SBA size standards in order to receive funding, click here.
For more information on Economic Injury Disaster loans and Emergency Economic Injury Grants, click here.
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.
7(a) loans not made under the Paycheck Protection Program (PPP), 504 loans, and microloans are elibile for debt relief under this program but Disaster Loans are not eligible. Borrowers may separately apply for and take out a PPP loan but debt relief under this program will not apply to a PPP loan.
SBA Express Bridge Loans
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
This pilot program allows for fast turnaround and less paperwork to get your business up to $25,000 fast.
For more information on the SBA Express Bridge Loan Pilot Program, click here.
If you, like many small business owners, need a business counselor to help guide you through this uncertain time, you can turn to your local Small Business Development Center (SBDC), Women’s Business Center (WBC), or SCORE mentorship chapter. These resource partners, and the associations that represent them, will receive additional funds to expand their reach and better support small business owners with counseling and up-to-date information regarding COVID-19. There will soon be a joint platform that consolidates information and resources related to COVID-19 in order to provide consistent, timely information to small businesses. To find a local resource partner click here
Counseling is free and training is low-cost with these partners. The additional funds that Congress provided will help keep this possible and mentorship through SCORE is always free.
The CleanTech Alliance is also here to help in these trying times. If you can think of any way that the CTA can help you or your business, please don’t hesitate to reach out and let us know.
Working Washington Small Business Emergency Grants
Governor Inslee is offering a new Working Washington Small Business Emergency Grant program to assist small businesses impacted by the COVID-19 outbreak. Up to $5 million in funds are provided through the Governor’s Strategic Reserve Fund and administered by the State Department of Commerce. The grant program will provide a limited number of businesses in Washington’s 39 counties with a grant up to $10,000.
IRS Employee Retention Credit
The IRS has posted a summary description of the employee retention tax credit that was enacted as part of the CARES Act (available here). The IRS also posted a frequently asked question page regarding the credit (available here).
The employee retention credit is a credit against the employer portion of social security tax and generally is available to employers that either (a) fully or partially suspended operations during any calendar quarter in 2020 due to orders from a governmental authority limiting commerce, travel, or group meetings due to COVID-19 or (b) experience a significant decline in gross receipts during a calendar quarter. For this purpose, an employer experiences a significant decline in gross receipts during a calendar quarter if the employer’s gross receipts for a calendar quarter in 2020 are less than 50 percent of its gross receipts for the same calendar quarter in 2019.
The amount of the employee retention credit is equal to 50 percent of an employer’s qualified wages paid to each employee per quarter, up to a maximum amount of $10,000 of qualified wages per employee for the year.
The FAQs include two helpful examples describing the calculation of the employee retention. In the first example, an eligible employer pays $10,000 in qualified wages to an employee in the second quarter of 2020. The amount of the credit with respect to such wages is $5,000 (50 percent of $10,000).
In the second example, an eligible employer pays $8,000 in qualified wages to an employee in the second quarter of 2020 and $8,000 in qualified wages to the employee in the third quarter of 2020. The amount of the credit with respect to such wages $4,000 in the second quarter (50 percent of $8,000) and $1,000 in the third quarter due to the overall limit on qualified wages per employee of $10,000, which limits the maximum amount of the credit per employee to $5,000 (50 percent of $10,000) for the year.
Click here to continue reading highlights of the IRS FAQ page regarding the employee retention tax credit.
CARES Act Help for Small Businesses and Individuals
Expanded unemployment benefits:
- Creation of a 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
- Increase in unemployment benefits to provide an extra $600 per week per recipient, for an expanded period of four months
- Funding for “short-time compensation” programs to allow employers to reduce employee hours instead of laying off workers, and provide a pro-rated unemployment benefit to affected workers
Tax measures to assist small businesses:
- A refundable payroll tax credit for 50 percent of wages paid during the COVID-19 crisis, available to employers whose operations were fully or partially-suspended or who suffered a 50% decline in gross receipts compared to the same quarter in the prior year
- Ability to defer the employer portion of Social Security taxes, with repayment over a two-year period
- Modification of net operating losses (NOL) restrictions to allow employers to utilize losses and amend prior year returns, providing critical cash flow and liquidity during the COVID-19 emergency
- Increase in business interest expense deduction from 30% to 50% of taxable income
- Immediate write-off of improvements to qualified facilities as opposed to depreciation on a 39-year schedule
Direct payments and credits to individuals and families:
- An automatic rebate of $1,200 single/$2,400 married for all U.S. residents with adjusted gross income up to $75,000 single/$150,000 married, plus an additional $500 per child
- Above these income thresholds, the rebate is gradually reduced and phased out completely for single filers with incomes exceeding $99,000, $146,500 for head of household filers with one child, and $198,000 for joint filers with no children
- To encourage charitable giving during this crisis, taxpayers will be able to deduct up to $300 in charitable donations even if they do not itemize deductions
- Learn about charities responding to the COVID-19 crisis and donate what you can to support relief efforts
- If you and your employees are non-essential, please stay home and practice recommended CDC guidelines to slow the epidemic
- Find an SBA-certified lender near you to learn more about the loan application process (note: the terms above are not yet available until enacted into law and implemented by SBA)
The bill does not include any provisions specific to energy. However, we anticipate an additional economic stimulus package later in the year once the immediate public health crisis subsides. Various energy provisions may be on the table at that time, including action on clean energy tax incentives. CEBN will continue to keep members posted about opportunities to engage.
Working Washington Small Business Grant program gets additional $5 million infusion
The Washington State Department of Commerce announced a doubling of funds available to very small businesses impacted by COVID-19 through the Working Washington Small Business emergency grant program. The program launched April 7 with $5 million from the state’s $200 million emergency response fund approved by the Legislature in March, and this new $5 million comes from the Governor’s Working Washington economic development strategic reserve fund.
“Economic recovery is a top priority,” Gov. Jay Inslee said. “Safe return to public life will look more like a turn of the dial, than a flip of the switch. We continue to do everything we can to support and help small businesses weather the storm today and prepare for a safe return to work soon.”
“These funds support very small businesses, many of which have not been able to access federal business assistance programs,” said Commerce Director Lisa Brown. “We are focusing where we know assistance funds will immediately recirculate and strengthen communities.”
The Working Washington Small Business grants offer up to $10,000 to businesses with up to 10 employees. Grant money can be used to pay for rent, utility bills, supplies, inventory and other operating expenses.
The program was overwhelmed with an estimated 25,000 applications and forced to close applications last Friday. The state does not plan to reopen the program to new applications at this time, but will be able to fund more requests with the additional funds announced today. Depending on the individual grant amounts, at least 1,000 businesses should receive funding, and likely more. Based on submissions reviewed so far, Commerce officials say most are under the $10,000 maximum amount.
Commerce’s partner local economic development organizations (based in all 39 counties) are reviewing applications from their communities and referring to the state for approval. To date, over 1,100 are in the approval pipeline, with funds expected to start reaching businesses in May.
“The need for small business relief is extreme and urgent. We received over 750 applications and are working as quickly as we can with a team of community volunteers to process them so that we can see the benefits take hold and multiply throughout our community,” said Jonathan Smith, Executive Director, Yakima County Development Association.
Other assistance is available to small businesses, including new funding approved this week for the federal Small Business Administration (SBA) forgivable loan program known as the Paycheck Protection Program (PPP). For more information on PPP, go to sba.gov.
In addition, Commerce partnered with local organizations throughout the state to offer business resiliency assistance to small business owners in culturally and economically disadvantaged communities to help provide them equal access to the multiple local, state, federal and other business relief programs.
“The impact of COVID-19 is devastating for multi-ethnic businesses who were already struggling to survive under ‘normal’ conditions,” said Ben Cabildo, President, African-American, Hispanic, Asian and Native American Business and Professional Association (AHANA). “We have to ensure that these businesses are made aware of and are able to access disaster relief, which is why our outreach is focused throughout communities of color to include language access and maximum use of trusted leaders and organizations.”
Some counties, cities and other sources may also have assistance of various types available to businesses. Find the most current information and resources for businesses and workers on the state’s coronavirus web portal at www.coronavirus.wa.gov.
Trump signs $484 billion coronavirus relief package
President Trump on Friday signed legislation providing $484 billion to replenish a popular small business lending program and support hospitals and COVID-19 testing amid the coronavirus pandemic.
The measure includes an additional $310 billion in funding for the Paycheck Protection Program (PPP), $60 billion of which is reserved for community banks and small lenders; $75 billion for hospitals; $25 billion to support testing efforts; and $60 billion for emergency disaster loans and grants.
CEBN: Update on federal small business relief programs
Source: Clean Energy Business Network, April 27, 2020
1. Paycheck Protection Program Reopens: The Paycheck Protection Program reopened this morning with an injection of $310 billion in funding from Congress. Changes to program implementation are outlined below. A list of SBA approved lenders can be accessed here.
- Carve out for specific lending institutions: $60 billion in funds have been set aside for Community Development Financial Institutions, Minority Depository Institutions, community banks, credit unions and other smaller lenders.
- Limits on lending: No single bank will be permitted to lend more than 10% ($60 billion) of total PPP funds. Larger lenders like Chase have warned applicants that a backlog of existing applicants may exceed this cap. Banks will be limited to a certain number of loan applications per hour to slow the pace of lending.
2. Economic Injury Disaster Loans to resume: SBA has announced it will resume processing existing applications for the EIDL program, which provides $10,000 in grants to small businesses. SBA will announce as soon as possible when new applicants may apply.
3. State and Local Resources: New resources continue to be added to the state and local financial relief database that the Duke School of Business is maintaining.