Getting financial help in the time of Corona. A break down of the CARES Act for individuals and small businesses.

We are all feeling the impact of COVID-19. However help is on the way – financially speaking. With the passage of the CARES Act by Congress, help comes in many forms. BTB is here to provide a break down of the CARES Act for individuals and small businesses.

There is a lot information coming from various sources, and it can be confusing to figure out exactly what it takes to qualify for help. BTB is here to help navigate the confusion of the individual economic stimulus and small business relief loans.

Individuals

Cash Payments:

• individuals who make less than $75,000 will receive a $1,200 one-time payment
• married couples making less than $150,000 per year will receive a $2,400 one-time payment
• $500 per child
• Social Security benefit recipients, and some others who do not file tax returns, are still eligible, but may need to submit a simple tax return (check for regular updates at irs.gov/coronavirus)

Payments are based on your 2018 or 2019 tax return, and you can calculate your stimulus payment here.

Unemployment Benefit Expansion:

• broadens unemployment eligibility; this includes part-time employees, freelancers, independent contractors, gig workers, and the self-employed who have lost their jobs due to the coronavirus
• extends state-level unemployment by an additional 13 weeks
• waives work history requirements; insufficient work history is not a determining factor of eligibility
• adds $600 per week from the federal government on top of state payments

To apply for unemployment benefits, here’s where you can find your state’s unemployment website.

Other Individual Relief:

• 2019 tax return filing deadline moved to July 15
• employers can contribute up to $5,250 in student loan repayments to workers without requiring workers to claim that money as income
• the bill requires private health insurance plans to cover COVID-19 treatments and vaccine, and makes all coronavirus testing free

Small Businesses

Economic Injury Disaster Loans (EIDLs) Expansions:

• SBA can approve these loans based solely on credit score (not ability to repay or tax return), and a prior bankruptcy will not disqualify you
• SBA can approve andy EDILs under $200,000 without a personal guarantee
• borrowers can receive $10,000 in an emergency grant cash advance which is eligible for forgiveness if spent on the following:
  • paid leave
  • payroll
  • increased costs due to supply chain disruption
  • mortgage/lease payments
  • other repayment obligations
• the CARES Act has expanded EDIL eligibility to sole proprietors, independent contractors, tribal businesses, cooperatives, and ESOPs with fewer than 500 employees and all non-profits including 501(c)(6)s

You can determine eligibility for a COVID-19 EIDL and apply here.

Paycheck Protection Program (PPP):

• federally funded loans for small businesses to maintain payroll during the COVID-19 National Emergency
• expanded to include self-employed, sole proprietors, freelance and gig workers
• maximum interest of 4%
• ten year loan term
• no personal guarantee or collateral required
• payments deferred up to 6 – 12 months
• borrowers are eligible to receive up to 2.5 x the their average monthly payroll costs, not to exceed $10 million; (see Figure A to determine average monthly payroll costs and a list of Included vs. Excluded payroll costs)
• partial loan forgiveness is available if used to pay the following operating costs (during the first 8 weeks):
  • payroll costs
  • interest on mortgage obligation incurred in ordinary course of business
  • rent on a leasing agreement
  • payments on utilities (electricity, gas, water, transportation, telephone, or internet)
  • additional wages paid to tipped employees

To apply for the Paycheck Protection Program, small businesses need to reach out to local lending institutions directly. This U.S. Chamber of Commerce Small Business Guide provides an in-depth look at what you should do to prepare before contacting your local lender.

We hope putting this information together has been helpful to you. In addition, as more information becomes available about the financial help for individuals and small businesses, BTB will be here to keep you up to date.

If you need help navigating your way through small business loan relief, or getting your books in order to determine eligibility, contact BTB today.