6-8-20 On Friday, the President signed the Paycheck Protection Program Flexibility Act. Final rules and guidance are being developed, but the legislation:
- Extends 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.
- Lowers 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.
- Provides 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.
- Provides 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.
- Increases 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.
- Extends 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.
More information and guidance will be provided over the next several days. Please check here for updates.
The regional office of the Small Business Administration is located at 10 Causeway Street, Room 265, Boston, MA, and its telephone number is 617-565-5590. The site has a Coronavirus (COVID-19) Small Business Guidance and Loan Resources page which is generally helpful.
More importantly, the site provides information relative to loan and debt relief options, such as :
For Private Nonprofits, businesses, homeowners, and renters, applications for Disaster Loan Assistance can be found here.
The U.S. Small Business Administration issued a notice of an Economic Injury Disaster Loan (EIDL) declaration for all counties in the Commonwealth of Massachusetts on March 18, 2020. More information about what this declaration means can be found here.
4-27-20 The U.S. Treasury Encourages Businesses Impacted by COVID-19 to Use Employee Retention Credit. The goal of the credit is to encourage businesses to keep employees on their payroll. The refundable tax credit is 50 percent of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
The credit is available to all employers regardless of size, including tax-exempt organizations. Small businesses who take Small Business Loans are not eligible.
A business qualifies if it falls into one of two categories:
- The employer’s business is fully or partially suspended by government order due to COVID-19 during the calendar quarter
- The employer’s gross receipts are below 50 percent of the comparable quarter in 2019. Once the employer’s gross receipts go above 80 percent of a comparable quarter in 2019 they no longer qualify after the end of that quarter.
These measures are calculated each calendar quarter.
More information on the credit can be found here.
3-19-20 Small Business Relief: The Baker-Polito Administration on March 18, 2020 announced administrative tax relief measures for small local businesses which have been impacted by the ongoing COVID-19 outbreak, especially in the restaurant and hospitality sectors. This tax relief includes postponing the collection of regular sales tax, meals tax, and room occupancy taxes that would be due in March, April and May so that they will instead be due on June 20. Additionally, all penalties and interest that would otherwise apply will be waived.
- Businesses that paid less than $150,000 in regular sales plus meals taxes in the year ending February 29, 2020 will be eligible for relief for sales and meals taxes, and business that paid less than $150,000 in room occupancy taxes in the year ending February 29, 2020 will be eligible for relief with respect to room occupancy taxes.
- The Department of Revenue is currently drafting emergency regulations to implement these administrative relief measures, and they are expected to be finalized before Friday, March 20, 2020.
3-18-20 Guidance on Small Business Administration Economic Injury Disaster Loan (EIDL) Program. The Massachusetts Emergency Management Agency (MEMA) is working closely with the U.S. Small Business Administration (SBA) to activate the Economic Injury Disaster Loan (EIDL) program which would provide assistance to eligible businesses and non-profits impacted by COVID-19. EIDLs provide small businesses with working capital loans of up to $2 million to help meet financial obligations and operating expenses until normal operations resume.
Affected small businesses and non-profits should download, complete, and submit the SBA EIDL Worksheet and Instructions to expedite activation of the EIDL program. For questions, please contact Disaster.Recovery@mass.gov. Full guidance regarding the program is here: https://www.mass.gov/info-details/small-business-assistance-for-covid-19?fbclid=IwAR3nJTouJT8xxlZ2KSrVD6NbFmhY2VNzBGAyA7yMv8DX3CPTowEzyU6reKo
3-16-20 Baker-Polito Administration announces $10 million Small Business Recovery Loan Fund. The $10 million Small Business Recovery Loan Fund will provide emergency capital up to $75,000 to Massachusetts-based businesses impacted by COVID-19 with under 50 full and part-time employees, including nonprofits. Loans are immediately available to eligible businesses with no payments due for the first 6 months.
How to Apply:
Please complete the application found on MGCC’s website, EmpoweringSmallBusiness.org. Completed applications can be sent via email to firstname.lastname@example.org with the subject line “2020 Small Business Recovery Loan Fund”. MGCC can be reached by email: email@example.com
Loan Fund Details:
- Who Qualifies: Open to Massachusetts-based businesses impacted by COVID-19 with under 50 full- and part-time employees, including nonprofits (negative impact must be verifiable).
- Terms and Conditions: This fund is being offered with no payments due for the first 6 months, then 30-months of principal and interest payments and no prepayment penalties.
- Businesses can apply for loans up to $75,000.
WorkShare is a program that the Commonwealth of Massachusetts has offered for some time, but may be particularly helpful now. The program is designed to be an alternative to layoffs, allowing employees to work reduced hours while collecting unemployment benefits to supplement their lower wages. If an employer participates, the employee gets to keep his or her job while working reduced hours, has wages supplemented, and continues to receive company benefits. Employers can learn more about the program here, and can access information on how to apply here.
COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses FAQs. The Families First Coronavirus Response Act (the “FFCRA”), provides small and midsize employers (those with fewer than 500 employees ) refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits. Certain self-employed individuals in similar circumstances are entitled to similar credits.
For FAQs, see “Basic FAQs,” and the sections that follow. The FAQs will be updated to address changes in the law or additional questions as they are raised.
The Commonwealth of Massachusetts has a website that will direct you to some of the programs listed above, but it will also link you to State resources as well. Find the site here.
The U.S. Chamber of Commerce has a helpful website for small businesses seeking guidance relative to the CARES Act. In particular, it has produced a Small Business Guide and Checklist that outlines what small businesses, independent contractors and gig economy workers need to do to access available funds.
The U.S. Senate Committee on Small Business and Entrepreneurship has produced a helpful guide that outlines initiatives for small businesses that were included in the federal relief legislation, know as the Coronavirus Aid, Relief, and Economic Security (CARES) Act, that was just passed by Congress and signed by the President. Find it here.