How to Seek Government Aid for Your Business During COVID-193 min read
The U.S. Congress recently passed two large stimulus bills to address the COVID-19 pandemic. The $2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act is primarily aimed at helping consumers. However, it also contains some assistance for small businesses in the form of increased access to Small Business Association (SBA) loans.
Meanwhile, the Families First Coronavirus Response Act (FFCRA) provides some economic relief for small businesses in the form of paid sick leave reimbursement.
Here’s what you need to know about getting aid for business during COVID-19.
The Paycheck Protection and EDIL Advance Programs
In mid-April, the SBA stopped accepting new applications for the Paycheck Protection Program because the program had run out of funds. The program was refunded later in the month, and was renamed the Paycheck Protection Program and Health Care Enhancement Act. At the time of this writing, the program is now accepting new applications, but priority is reportedly being given to those businesses that didn’t receive assistance but applied before the program had run out of funds.
At this time, the SBA still cannot accept new applications for its Economic Injury Disaster Loan Emergency Advance program, either. More funds may be appropriated for this program, but it is not clear when that may happen.
The Paycheck Protection Program originally authorized up to $349 billion in forgivable loans to businesses with fewer than 500 employees. It was intended to help businesses pay employees, rent, mortgage interest and utilities during the economic downturn.
If funded, the program will be available through June 30th, 2020. You can apply for the program through the SBA’s Connect portal.
SBA Bridge Loans and SBA Debt Relief
SBA Express Bridge Loans can provide up to $25,000 in funding to help small businesses overcome their temporary loss in revenue. These loans come with a fast turnaround, but they are only available to businesses that already have a business relationship with an SBA Express Lender.
You can apply for a bridge loan by downloading the application form from the SBA website.
Meanwhile, the SBA’s Debt Relief program automatically pays the principal, interest and fees of current 7(a), 504, and microloans as well as new loans in these categories issued before September 27th, 2020.
The Administration is also providing automatic deferment to businesses with current SBA Serviced Disaster Loans. If you have one of these loans, you don’t need to act, and you can stop paying them until December 31, 2020, if you choose. However, interest will still accrue on the loan and the changes will not stop any automatic payments.
Paid Sick Leave Reimbursement
If you have employees who are taking qualified leave because they have tested positive for COVID-19 or they must care for someone infected, you can receive up to 80 hours of sick leave reimbursement for each employee. This program is available to businesses with fewer than 500 employees.
Employees who must care for a child because their school or daycare is closed can also obtain expanded family and medical leave after taking two weeks of paid sick leave. These employees must have been employed for at least 30 days. They’ll receive partial payment for up to 10 weeks, which can be reimbursed.
Reimbursement will not come in the form of a check or deposit, however. There is no application for the tax credit. Instead, it will come in the form of payroll tax relief. The funds are taken from the payroll taxes you’d normally pay the government, so businesses are advised to keep records of employees who are taking leave.
Manage Expenses with AND.CO
Like many businesses, you’ll need to find ways to cut costs and improve cashflow during this difficult time. Over 300,000 businesses and freelancers have already chosen AND.CO as their primary app for managing invoices, sending and receiving payments, and tracking expenses.
Try AND.CO today to get a clearer picture of your business finances. It’s free to sign up.