There’s been some new developments in the Covid19 Small Business Relief programs. Did you miss out on SBA Disaster loans? It may not be too late, but you must act fast. Are you unclear about the terms of PPP loans? We’re updating news and resources for Covid19 disaster loans and grants, PPP loan forgiveness terms, business tax credits, and more.
Economic Injury Disaster Loans (EDIL) and Grants
The Small Business Administration is reopening its Economic Injury Disaster Loans, or EDIL program, the agency said Monday, allowing businesses and nonprofit organizations with 500 employees or fewer to apply for low-interest assistance and an emergency advance grant of up to $10,000. The advance, based on a company’s headcount ($1,000 per employee), doesn’t have to be paid back.
The loan program predates the pandemic and is separate from the Paycheck Protection Program, which is still accepting applications until June 30. The SBA had previously halted most EIDL applications after overwhelming demand.
On June 15, 2020, the SBA announced that it was again opening up its Economic Injury Disaster Loan (EIDL) grant and loan program. This means that independent contractors, freelancers, and gig workers are eligible to receive a $1,000 grant that does not have to be repaid.
Small businesses and agricultural businesses also may apply for the grant, equal to $1,000 per employee of the business up to a maximum of $10,000.
Paycheck Protection Program extends loan forgiveness from 8 to 24 weeks
This bill offers employers more time and flexibility to keep their employees on the payroll and ensure their continued operations as we safely reopen our country.
These modifications will implement the following important changes:
- Extend the covered period for loan forgiveness from eight weeks after the date of loan disbursement to 24 weeks after the date of loan disbursement, providing substantially greater flexibility for borrowers to qualify for loan forgiveness. Borrowers who have already received PPP loans retain the option to use an eight-week covered period.
- Lower the requirements that 75 percent of a borrower’s loan proceeds must be used for payroll costs and that 75 percent of the loan forgiveness amount must have been spent on payroll costs during the 24-week loan forgiveness covered period to 60 percent for each of these requirements. If a borrower uses less than 60 percent of the loan amount for payroll costs during the forgiveness covered period, the borrower will continue to be eligible for partial loan forgiveness, subject to at least 60 percent of the loan forgiveness amount having been used for payroll costs.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees for borrowers that are unable to return to the same level of business activity the business was operating at before February 15, 2020, due to compliance with requirements or guidance issued between March 1, 2020 and December 31, 2020 by the Secretary of Health and Human Services, the Director of the Centers for Disease Control and Prevention, or the Occupational Safety and Health Administration, related to worker or customer safety requirements related to COVID–19.
- Provide a safe harbor from reductions in loan forgiveness based on reductions in full-time equivalent employees, to provide protections for borrowers that are both unable to rehire individuals who were employees of the borrower on February 15, 2020, and unable to hire similarly qualified employees for unfilled positions by December 31, 2020.
- Increase to five years the maturity of PPP loans that are approved by SBA (based on the date SBA assigns a loan number) on or after June 5, 2020.
- Extend the deferral period for borrower payments of principal, interest, and fees on PPP loans to the date that SBA remits the borrower’s loan forgiveness amount to the lender (or, if the borrower does not apply for loan forgiveness, 10 months after the end of the borrower’s loan forgiveness covered period).
- In addition, the new rules will confirm that June 30, 2020, remains the last date on which a PPP loan application can be approved.
Business Tax Relief
- IRS Coronavirus Tax Relief for Businesses and Tax-Exempt Entities
- Three new credits are available to many businesses hit by COVID-19 Q&A regarding the employee retention, paid sick leave, and family leave credits.
Additional Small Business Relief Resources
US SBA: Resources for Small Businesses in Response to the Novel Coronavirus Pandemic – updated on June 10
CDC Reopening Guidance
- CDC Interim Guidance for Businesses and Employers
- Businesses and Workplaces – Plan, Prepare, and Respond
- Workplaces Considerations for Reopening During the COVID-19 Pandemic
COVID19 Effects on Insurance Agency Mergers & Acquisitions
Reopening Your Office: The Ultimate Guide for Insurance Agencies
COVID19: Insurance executive perspectives about navigating the coming months in your insurance agency
COVID19: Act Now to Access Funds for Your Agency