Federal Resources for Non-Profits and Small Businesses
Please see below for some notable updates on possible assistance options:
Small Business Owner Guide to the CARES Act (from the U.S. Senate Committee on Small Business & Entrepreneurship). This guide has frequently asked questions for each of the programs established or enhanced to support small businesses, and I have briefly summarized the major provisions of each program below to make it easier to digest.
Paycheck Protection Program Loans – Guidance now available
General Information: The PPP program is designed to help small businesses maintain payroll in light of the COVID-19 pandemic. Eligible businesses who enroll in the program will receive a forgivable loan to use for payroll purposes, in addition to helping pay for utilities, rent, mortgage interest payments, and more. Details are included in the links below.
New Resources: This morning, the Small Business Administration distributed additional guidance from the U.S. Department of the Treasury on how the Paycheck Protection Program is going to be implemented and what both lenders and borrowers need to know. The following documents were provided:
Economic Injury Disaster Loan Program remains available
General Information: The SBA’s Economic Injury Disaster Loan (EIDL) program received significant funding in the Families First Act, which was the 2nd COVID-19 stimulus package. These SBA loans provide small businesses with a long-term, low interest loan of up to $2 million to pay for expenses they would have met if not for the COVID-19 pandemic.
Note that these are loans, not grants, although refinancing an EIDL into a PPP Loan is a possibility, provided you used the fund for the proper purpose. Additionally, applicants can apply for both EIDL and PPP loans simultaneously, although the funds can not be used for the same purpose.
Application Process: The SBA has just recently rolled out a new, streamlined application process that is available here. Note that if your business needs short term assistance, and you applied before this week, you may need to re-submit your application (see below).
If you have already applied for funds through EIDL and do not need the $10,000 advance, your application should continue to be processed without additional steps. You may check on the status of your application by calling 800-659-2955.
Emergency Economic Injury Grants (advance on EIDL loans)
General Information: Businesses that need an infusion of capital in the short term and who have applied for a loan through the EIDL program can also apply for an Emergency Economic Injury Grant, which will provide an advance of $10,000 from the requested EIDL amount. This process can be started from the EIDL application, available here.
Importantly, if you already submitted an EIDL application prior to the launch of this program (SBA says if you applied before Monday) you will have to resubmit an application using the streamlined process at the link above.
SBA Small Business Debt Relief Program
The Small Business Administration is providing a program to assist small businesses who have non-disaster SBA loans – namely 7(a) loans, 504 loans, and microloans.
Program Benefits: The SBA will cover payments (on principal and interest) in addition to fees for six months.
Program Applicability: This program will apply to preexisting loans in these categories, in addition to new borrowers who take out these loans within six months of the CARES Act becoming law.
Loan Program Details: Please see the below links if you think that your business could benefit from these options:
Employee Retention Tax Credit
General Information: The CARES Act includes a Employee Retention Tax Credit, designed to encourage employers to retain their employees during the COVID-19 crisis. The IRS describes the credit as a “fully refundable tax credit for employers equal to 50 percent of qualified wages (including allocable qualified health plan expenses) that Eligible Employers pay their employees. This applies to wages paid between March 12, 2020 and January 1, 2021, with a maximum credit for any employee amounting to $5,000. Additional IRS guidance is available here.
Key Caveat: This credit is not available to employers receiving assistance via the Paycheck Protection Program.
Employer Payroll Tax Deferral
General Information: According to the Guide, a provision in the CARES Act allows for the deferral of the employer portion of certain payroll taxes through the end of 2020. These deferred amounts are due in two installments – one at the end of 2021, the other at the end of 2022. Included deferrable taxes include the employer portion of FICA taxes and half of SECA tax liability. I have not seen additional IRS guidance on this yet, but I expect it soon at the IRS coronavirus webpage.
Key Caveat: Deferral is not available to employers receiving assistance via the Paycheck Protection Program.
Business Counseling (+ Assistance with Applications)
General Information: In addition to direct financial assistance to small businesses and non-profits, the recent stimulus packages have included significant funding for enhanced small business counseling services. These organizations are well versed in how to help small businesses succeed and stand ready and willing to help your organization navigate these difficult times. Counseling resources include:
Illinois Small Business Development Center at West Side Forward | Contact is Curtis Roeschley, 773-473-4774 / firstname.lastname@example.org
In addition to serving women entrepreneurs, the Women’s Business Development Center is mandated to serve the needs of underserved entrepreneurs, including low-income entrepreneurs.
Minority Business Development Agency Business Center | 312-755-2563