In order to address COVID-19, Congress and President Trump have enacted three major pieces of legislation to fight this disease and help as many Americans as possible stay employed, with the goal of resuming our strong economy as soon as possible when this pandemic subsides. While agencies such as Treasury and the Small Business Administration (SBA) are working to roll out these programs as quickly as possible, I hope the information below will be helpful to you in this challenging time. With any of these programs for small businesses, I strongly recommend you work with your accountant and regular lender as soon as possible to understand the full parameters of each program, review your eligibility, and determine which options are most appropriate for you. Please contact any of my offices if I may be of further assistance.
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In order to address COVID-19, Congress and President Trump have enacted three major pieces of legislation to fight this disease and help as many Americans as possible stay employed, with the goal of resuming our strong economy as soon as possible when this pandemic subsides. While agencies such as Treasury and the Small Business Administration (SBA) are working to roll out these programs as quickly as possible, I hope the information below will be helpful to you in this challenging time. With any of these programs for small businesses, I strongly recommend you work with your accountant and regular lender as soon as possible to understand the full parameters of each program, review your eligibility, and determine which options are most appropriate for you. Please contact any of my offices if I may be of further assistance.
Small Business
Administration Programs
Paycheck Protection Program (PPP) Loans
PPP loans are designed to help eligible small businesses and non-profits (501(c)3 and 501(c)19) with 500 or fewer employees keep employees on the payroll through this challenging period. These loans are fully guaranteed by SBA, available through most financial institutions, and amounts spent by eligible employers on up to eight weeks of wages, benefits, rent, mortgage interest, and utilities are fully forgivable. In order to allow employers to bring back employees already furloughed, this program is retroactive to February 15, 2020.
Businesses may not participate in PPP and also receive Employee Retention Tax Credits to offset employee compensation. Businesses ineligible for PPP may participate in the tax credit instead, if they qualify.
Economic Injury Disaster Loans and Grants
Small businesses with 500 or fewer employees, including sole proprietorships, independent contractors, cooperatives, and small tribal businesses, may apply for EIDL loans of up to $2 million, with principal and interest deferment. The first $10,000 of any EIDL is payable as a grant, which may be used to address increased production costs, meet payroll, pay sick leave, or meet other business obligations.
Small Business
Debt Relief Program
In order to assist small businesses with existing non-disaster SBA loans through this time, SBA will cover all loan payments, including principal, interest, and fees, for six months, for small businesses harmed by COVID-19. While PPP loans are not eligible for this relief, small businesses may receive this debt relief and also take a PPP loan to assist with payroll.