We are all operating in uncharted territory with anything but a clear horizon. Keeping our businesses healthy depends on adjusting as quickly as possible to the new circumstances as well as making use of the support and relief programs available from State and Government Programs.
Part of the CARES Act, signed into law on March 27th, is the Paycheck Protection Program funded with $349 billion exclusively for small businesses, administered by the Small Business Administration. Most importantly this program, which offers loans up to $10 million, has a forgiveness component - like a government grant - of up to 100% - if the funds are spent on payroll, mortgage, leases and utilities over an 8-week period after the loan has been originated.
According to the SBA, applications will be accepted starting April 3rd. We believe this program offers the best chance for financial support to “essential” small businesses that are still operating. However, the funds a finite and being first in line could be critical for consideration.
Therefore we attempt to provide you with the necessary information to enable you - if you choose to - apply in the coming days. While the documents below are for information only please make sure to talk to your CPA, tax attorney, tax preparer and SBA contact about your individual situation.
Based on our research we highly recommend exploring the financial benefits of the Paycheck Protection Program.
Most importantly, stay safe and healthy.
Thomas Beer, CEO
FEDERAL PAYCHECK PROTECTION PROGRAM
1. GENERAL OVERVIEW
The documents below summarize the scope and details of the program in terms of eligibility, available funds, loan amounts calculation and rules regarding forgiveness.
These are the final Provisions of the PPP as released on April 2nd.
We also recommend to watch the below youtube video explaining the last-minute changes to the program and how the rules are being applied. We are not affiliated with the organizer but found the information helpful, considering the urgency of the program. PPP is a first-come, first-serve program!
2. SUPPORTING DOCUMENTS
Below is the final – adjusted – Paycheck Protection Application Form from April 2nd
The below spreadsheet is the expected PPP SBA Loan Payroll Template. This is designed to quickly calculate and keep record of historical payroll for 2019, as it supports the loan request. Most 3rd party payroll companies should also be able to supply this information.
SMALL BUSINESS FINANCIAL RELIEF INFORMATION –
FEDERAL AND STATE RESOURCES
Last week congress passed a stimulus package that includes assistance, loans, and grants through the Small Business Association. The following links provide both an overview and more detailed information about the CARES Act.
Below is the link to the sample application for the Paycheck Protection Program PPP. This is expected to the final copy and quick to complete.
Here is a summary and Q&A of the CARES ACT Small Business Association Programs and Initiatives to help small business owners.
Link to SMALL BUSINESS ASSOCIATION LOANS, GRANTS, DISASTER PROGRAMS website.
SUMMARY: As part of its disaster assistance program, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus, grants.
These loans carry an interest rate of 3.75% for small businesses and 2.75% for nonprofits. Loan repayment terms vary by applicant, up to a maximum of 30 years.
As of March 23, businesses in every state plus American Samoa, Guam, the Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands can apply.
You can use the loan to cover accounts payable, debts, payroll and other bills the coronavirus has affected your ability to pay.
HOW TO APPLY
Apply online and select “Economic Injury” as the reason you’re seeking assistance.
You’ll need to supply required supporting documentation that could include the business’s most recent tax returns, a personal financial statement and a schedule of liabilities that lists all your current debts.
Call the SBA Disaster Assistance Customer Service Center at 1-800-659-2955 for help with your application.
Talk with your CPA, tax attorney, or tax preparer for how this tax information may apply.
STATE AND REGIONAL COVID-19 SMALL BUSINESS RESOURCES
Some states provide state-level financial loans, assistance, and tax relief to small business owners impacted by coronavirus. Check what may assistance is available in your own state.
CALIFORNIA REGIONAL INFORMATION AND PROGRAMS
State Assistance – no assistance (other than federal SBA loans) listed as of the date of this posting. Check here for updates.
Here is a link to the Governor’s websites for all 50 states. Check your state’s governor’s website for information specific to your state.
BANK INFORMATION AND PROGRAMS
Bank Programs – Many banks have coronavirus responds programs and special services, including waived fees and special loan deferrals.
Automotive industry associations are providing information and resources to industry businesses.
EMPLOYMENT RELATED TOPICS
**This is for information purposes only and you should contact your tax provider, financial institutions, and government services for specific guidance for your situation**