Coronavirus Small Business Relief
The Coronavirus pandemic has created economic uncertainty and fear for many people, but business owners are especially feeling the strain of keeping the doors open and employees paid. In the face of mandatory closures that are dragging on for weeks - and with no clear end in sight - it's no wonder that so many are experiencing anxiety and worry over how to keep their businesses afloat.
The CARES Act
The government has recently passed a record-breaking economic relief bill to aid businesses and American families. The Coronavirus Aid, Relief and Economic Security (CARES) Act allocates $2 trillion for individuals, businesses, nonprofits, federal agencies, and local governments. What kind of relief can you expect to get? In a nutshell, the bill provides loans and other financial assistance for businesses, although the implementation, set to begin on April 3rd, 2020, has been a little rough and confusing.
Let us help you wade through the sea of information and try to get the help your business needs.
The Paycheck Protection Program
The Paycheck Protection Program is a government-funded loan design to help employers keep their employees on the payroll and out of unemployment offices. This special relief loan is available for small businesses with less than 500 employees, nonprofits, veteran organizations, and tribal businesses.
Qualified applicants may qualify for a loan of up to $10 million. The loan amount is determined by eight weeks of prior average payroll plus an additional 25%. If you can secure a Paycheck Protection Loan, the loan payments can be deferred for six months to allow your business to get back on its feet.
What Can I Use This Money For?
- Payroll for you and your employees.
- Rent and mortgage obligations.
- Other debt obligations you may have.
How Do I Get This Loan Forgiven?
This is a critical question. The loan forgiveness provision is the best part!
You are eligible for loan forgiveness for the amounts you spend over the next eight weeks after receiving the loan on certain qualifying expenses. The qualifying expenses of the business over the eight-week period include payroll costs, rent, interest on mortgage debt, and utilities. If the number of full-time employees is reduced over this time period or if your payroll costs are reduced by 25 percent or more, then the amount eligible for forgiveness will also be reduced.
Paycheck Protection Loans are supposed to begin rolling out on April 3rd, 2020. The loans do not come from the Small Business Association, but from SBA approved lenders. Not all banks are participating, so be sure to check with your lender and try to secure an appointment.
For full details, including any additional qualifiers, please visit the SBA website below:
For a list of potential SBA approved lenders, click here:
Additional COVID-19 Relief & Support
The Small Business Association has also outlined several other programs available to support businesses during the pandemic. Each program has it's own criteria and qualifiers.
Protect Your Bottom Line
No one can predict what will happen over the next few weeks or months, but you can protect your bottom line by taking advantage of these economic relief offers from the government stimulus packages. Not every business will qualify, but if you are eligible, it might just help you keep a little bit of money in your piggy bank.
We will continue to provide you with resources and help as we all come through this together. If you need a consultation or to strategize about your company's next marketing move, contact us. Now is not the time to stop marketing, and we're here to help.