On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses. The U.S. Small Business Administration administers the loan programs and options, and they are detailed below or can be viewed here:https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
Paycheck Protection Program
Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply.
The Paycheck Protection Program would provide cash-flow assistance through 100% federally guaranteed loans to employers who maintain their payroll during this emergency. The government will authorize certain lenders to facilitate these loans. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. Consult with your existing lender to apply.
PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.
Economic Injury Disaster Loan and Loan Advance
In response to the Coronavirus (COVID-19) pandemic, small business owners in all U.S. states, Washington D.C., and territories are eligible to apply for an Economic Injury Disaster Loan advance of up to $10,000. The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
The loan advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds will be made available within three days of a successful application, and this loan advance will not have to be repaid.
The SBA’s Economic Injury Disaster Loan program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
Loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses without credit available elsewhere; businesses with credit available elsewhere are not eligible. The interest rate for non-profits is 2.75%. Loans have long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay. For additional information, please contact the SBA Disaster Assistance Customer Service Center: 1-800-659-2955 (TTY: 1-800-877-8339) or disastercustomerservice@sba.gov.
Florida Emergency Bridge Loan (EBL) Program
This loan program has been activated by Governor DeSantis to provide short-term, interest-free loans to businesses impacted by COVID-19. Administered by the Florida Department of Economic Opportunity (DEO) in partnership with the Florida SBDC Network and Florida First Capital Finance Corporation (FFCFC), the bridge loan program is a short-term, interest-free loan program designed to help businesses bridge the gap between the time damage is incurred and when a business secures other financial resources, including payment of insurance claims or longer-term U.S. Small Business Administration (SBA) loans.
EBL loans may be made to eligible for-profit businesses having 2-100 employees. 1099 (contractor) employees do count towards the total number. That was not the case for prior EBL programs.
Loan amounts up to $50,000 are possible (to $100,000 in special circumstances). Term is 1 year. No interest or payments are due during the term, but the entire remaining principal is due at the end of the term. Unpaid EBL loans do not convert to a term loan, but will accumulate interest at 12% and possible collections fees if not paid by the due date.
If you would like assistance with your application, the Florida SBDC at UCF, Lake County, is ready to help. Please contact their offices at 352.404.7338 (Groveland) or 352.602.4575 (Mt. Dora). One of their consultants will be in touch with you to answer your questions and can review your application ahead of final submission. At this time, the SBDC will try to follow up with contacts within 48 hours if at all possible.
To learn more or to apply, visit: http://floridasbdc.org/disaster/ebl/
Small Business Debt Relief Program
This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, the SBA will pay the principal and interest of new 7(a) loans issued prior to September 27, 2020. Also, the SBA will pay the principal and interest of current 7(a) loans for a period of six months.
7(a) loans are an affordable loan product of up to $5 million for borrowers who lack credit elsewhere and need access to versatile financing, providing short-term or long-term working capital and to purchase an existing business, refinance current business debt, or purchase furniture, fixtures and supplies. In the program, banks share a portion of the risk of the loan with SBA. There are many different types of 7(a) loans, you can visit this site to find the one that’s best for you. You apply for a 7(a) loan with a bank or a mission-based lender.
SBA Express Bridge Loans
Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan. Terms: Up to $25,000, Fast turnaround, Will be repaid in full or in part by proceeds from the EIDL loan.
Employee Retention Tax Credit
This new employee retention tax credit is a 50% tax credit for the first $10,000 of compensation, including the employer portion of health benefits, for each eligible employee. Compensation does not include paid sick or family leave for which the employer is reimbursed under the Families First Coronavirus Response Act.
The credit only applies to wages paid after March 12, 2020 and before January 1, 2021. For employers with more than 100 employees: Full-time employees who are (i) being paid but (ii) not providing service due to either a full or partial shutdown or a reduction in gross receipts count toward eligibility. For employers with 100 or fewer full-time employees: All employees, regardless of whether those employees are providing service, count toward eligibility.
Employers may not claim the same employee for this credit and the Work Opportunity Tax Credit for the same period. In addition, employers may not claim the same wages for an employee under this credit and also under the employer credit in section 45S for FMLA.
The refundable credit is applied against the employer portion of payroll taxes. The Treasury Department will develop a process for employers to receive an advance payment of the tax credit. Read more from the U.S. Chamber of Commerce.
Enterprise Florida Suspends Initial Fees through its Microfinance Guarantee Program to Support Florida Small Business Community
TALLAHASSEE, Fla. (April 6, 2020) – Enterprise Florida, Inc. (EFI) announced that it will suspend initial fees for its Microfinance Guarantee Program to support Florida’s small business community impacted by COVID-19. EFI manages the Microfinance Guarantee Program designed to stimulate access to credit for entrepreneurs and small businesses in this state by providing targeted loan guarantees to lenders made to such entrepreneurs and small businesses. This program provides guarantees up to 50% on loans of $250,000 or less.
“Governor DeSantis is focused on helping Florida businesses as they respond to the impacts of COVID-19,” said Jamal Sowell, Florida Secretary of Commerce and President & CEO of EFI. “EFI is committed to assisting businesses across the state as they recover and will support Florida as it recovers from this crisis.”
The Microfinance Guarantee Program has the following requirements:
- Entrepreneur or small business located in Florida;
- Employs 25 or fewer people;
- Generates average annual gross revenues of $1.5 million or less per year for the last 2 years.
Interested businesses must apply through a local lender. For further information please contact your lender or visit Enterprise Florida’s website: https://www.enterpriseflorida.com/small-business/microfinance-guarantee-program/
We are still encouraging businesses to fill out DEO’s Business Damage Assessment Survey if they haven’t done so, as our state and local agencies are still compiling this information to determine the needed resources for our community. Of course, the number one priority now is to stay healthy and to limit our exposure to COVID-19 per CDC guidelines.
The Florida Department of Revenue issued two Emergency Orders related to Sales and Use Tax and Property Taxes that will provide flexibility on tax due dates. To view taxpayer information regarding COVID-19, click here:
Information furnished by the Elevate Lake team. If you have a question, go to info@elevatelake.com or call 352-343-9647.
