COVID19 Financial Resources

2020-07-08T01:34:58-04:00 April 6th, 2020|

COVID-19 has brought a lot of uncertainty to Small Businesses across the United States. Many business owners are feeling the financial pressures brought on by mandatory closures, or decreased traffic as a result of shutdowns. Things are changing daily as well, so it can make even the most veteran businessperson’s head spin.

Below is a brief high-level summary of what every Small Business Owner needs to know as they navigate these uncharted waters:

  • Make sure your employees know about the resources available to them:

    • Federal tax filing and payment deadline postponed until July 15, 2020. Many states have extended their filing deadlines as well.
    • Student Loans are not accruing interest and some loans may be put in Forbearance if the borrower has an inability to pay due to COVID-19.
    • Federal Stimulus checks will be direct deposited if the IRS has your banking information ($1200 per individual, $2400 if married, plus an additional $500 per child, limitations do apply).
  • If you have no choice but to layoff employees, it may bring you peace of mind to know the Federal Unemployment Benefits have been increased.

    • All unemployed workers will be paid an additional $600/week in addition to what they would normally receive. This increase is approved through July 31, 2020.
    • For some employees, the increased Unemployment Benefit Payments may be higher than their regular pay.
  • The CARES Act – Payroll Protection Program (PPP)

    • Loans are available for eligible Small Businesses, without having to provide a personal guarantee or collateral
    • Loans are for the amount of 2.5 X your average monthly payroll costs for the last 12 months. This includes:
      • Salary, Wage, & Commission
      • Payment of cash tips
      • Vacation, Sick, Parental, or any other Medical Leave
      • Allowance for dismissal or separation
      • Payment for group health insurance
      • Payments for retirement benefits
      • State & Local taxes assessed on the compensation of the employee
    • If you maintain your employees throughout the crisis, these loans will be forgiven up to the amount of 8 weeks of expenses in the following categories:
      • Total payroll costs as determined above
      • Interest on mortgages held by the business
      • Rent on a leasing agreement
      • Payments on all utilities
    • Applications are to be submitted to your bank
  • Emergency Injury Disaster Loan (EIDL)

    • Loans up to $2M are available to small business that have been impacted by COVID-19
    • These loans have an APR of 3.75% with terms up to 30 years
    • These working capital loans may be used to pay fixed debts, payroll, accounts payable and other bills that could have been paid had the disaster not occurred
    • These loans are not intended to replace lost sales, lost profits, or provide assistance for expansion
    • Applications are made via the SBA Disaster Assistance Program at disasterloan.sba.gov
  • Economic Injury Disaster Loan Emergency Advance

    • This loan advance will provide up to $10,000 of economic relief to business that are currently experiencing temporary difficulties
    • This loan advance will not have to be repaid
    • The application is brief and can completed online at covid19relief.sba.gov
  • Delay the Payment of Employer Payroll Taxes

    • Employers can defer payments of their share of the social security tax over the following two years.
    • First half due 12/31/2021 and second half due 12/31/2022.
    • You are not eligible to defer this payment if you are participating in the Payroll Protection Program.
  • Business Interruption Coverage provided by your insurance carrier

    • Many business and commercial property policies include coverage for “Business Interruption:
    • You may be entitled to an insurance payment for loss of revenue when closure is related to property damage and/or government mandate.
    • The insurance industry is being reviewed frequently to determine how to address business owners’ needs.
    • Premier Claims offers complimentary policy reviews to see if you have coverage.
    • You can upload your policy and request your complimentary review by our legal team by visiting premier-claims.com/loss-of-business-due-to-coronavirus

Written by CFO Melissa Hurrington