Coronavirus Aid, Relief, and Economic Security (CARES) Business Assistance Available Pat Sharkey, Tourism Tabitha Hodge, Econ Devel Kayla Cox, Town of Floyd Lydeana Martin, Econ Devel John McEnhill, Chamber
Welcome • Small Businesses • Non ‐ profits (including faith ‐ based) • Self ‐ employed, Sole Proprietors, Independent Contractors!
Today • Economic Injury Disaster Loans/Cash Advance Grant • Paycheck Protection Program • Q&A • Tourism Update You can type a question anytime in the chat box at the bottom of the screen and we’ll cover during Q&A Other help, call 540 745 ‐ 9300 ask for Tabitha
Painful Truths • These are unprecedented times • CARES legislation passed on Friday, March 27 th is sweeping and many rules still not clear +/or interpretations evolving daily – We’ll focus on just two new programs today • No one seems to know all the answers, least of all us • But we’re trying, and we’ll keep trying, to help
Cash: How much do you need each month (bare minimum)? • Fixed costs (overhead): Variable costs: ( directly – Rent or Mortgage* related to sales): – Utilities (somewhat) ‐ Wages – Insurance* ‐ Raw goods, inventory – Property taxes ‐ Utilities • Break ‐ even: when revenue covers fixed & variable • Now, if sales not at least covering variable, then temporary closure might be better. • These two new fed. programs might factor into that decision, but response not likely to be fast— plan on a month+
Economic Injury Disaster Loan (EIDL) What is it? • COVID-19 EIDL is one of two new assistance programs for small businesses supported by Small Business Admin. (SBA) • Allows borrowing up to $2 million dollars at an interest rate of 3.75% for businesses and 2.75% for nonprofits. Loan term up to 30 years. • An automatic one-year deferral on repayment, though interest begins to accrue when the loan is disbursed. • For loans of less than $200,000, the borrower is not required to submit personal guarantees. The SBA will request collateral if the loan exceeds $25,000, but the failure to provide collateral does not disqualify the application.
EIDL Cash Advance Grant What is it? • Unlike the PPP loan, the EIDL is obtained directly through the SBA. • And it can provide up to $10,000 cash grant “within three days after the SBA receives the application” whether or not you pursue or accept a loan. • Application open now through December 31, 2020, though funds may run out first. • These advances are available only for applications related to COVID-19 crisis.
EIDL Cash Advance Grant What can the cash advance be used for? Businesses can use the advance for any allowable EIDL purpose under current law, including: • Providing paid sick leave to employees unable to work due to COVID-19 (but no double dipping) • Maintaining payroll • Meeting increased costs due to interrupted supply chains • Making rent or mortgage payments • Repaying obligations that cannot be met due to revenue losses
EIDL Cash Advance Grant What Businesses are Eligible? • In business for the 1-year period before the disaster; and (CARES Act) still in operation as of January 31, 2020 • Business with not more than 500 employees or • Sole proprietorship, with or without employees, or • Independent contractor, or self-employed, or • Applicant is a cooperative with not more than 500 employees,or • Applicant is an Employee Stock Ownership Plan (ESOP), per 15 U.S.C. 632, with not more than 500 employees, or • Applicant is a business, including an agricultural cooperative, aquaculture enterprise, nursery, or producer cooperative
EIDL Cash Advance Grant What Non-profits are Eligible? • Applicant is a private non-profit organization • that is a non-governmental agency or entity that currently has an effective ruling letter from the IRS granting tax exemption under sections 501(c),(d), or (e) of the Internal Revenue Code of 1954 • Faith-based organization are eligible. Specific guidance can be found online at: https://www.sba.gov/document/support--faq-regarding- participation-faith-based-organizations-ppp-eidl
EIDL Cash Advance Grant What Businesses aren’t Eligible? • Applicant is engaged in any illegal activity (as defined by Federal guidelines). • A principal of the Applicant with a 50 percent or greater ownership interest is more than sixty (60) days delinquent on child support obligations. • Agricultural enterprise (e.g., farm), other than an aquaculture enterprise, agricultural cooperative, or nursery. • Applicant derives more than one ‐ third of gross annual revenue from legal gambling activities. • Applicant is in the business of lobbying. • A state, local, or municipal government entity, or member of Congress.
EIDL Cash Advance Grant Application Form – First Page • Online Form is at: https://covid19relief.sba.gov/#/ • Should take about 8-10 minutes to complete • First page asks what type of eligible business and to confirm that not excluded by any factors listed on previous slide
EIDL Cash Advance Grant Application Form – Second Page • Basic Name and Contact info • FEIN or SSN • Date current ownership started and date business established • # of employees as of 1-31-20 • Type of business activity • For 12 months prior to 1-31-20 (as applicable) • Gross revenue • Cost of goods sold • Operating Expenses • Lost Rents • For Faith-based organizations – secular expenses and activities
EIDL Cash Advance Grant Application Form – Third Page • Owner/agent info • Name, residential address, email, phone • Title • SSN • Date of Birth • Place of Birth • FEIN or SSN
EIDL Cash Advance Grant Application Form – Fourth/Fifth Page • Fourth page • Asks about any criminal history in last year, under indictment, arrested, banned from federal grants, etc. • Ask for info about any third party/person preparing application (like CPA) • If cash advance requested (must check if wanted) • Bank info for direct deposit • Declare under penalty of perjury that info is correct • Last Page is summary for confirmation and submit button PRO TIP: Be sure to write down or screenshot the application number that you see on the screen after you complete the application; you won’t receive a confirmation email until your application has been reviewed.
EIDL Cash Advance Grant What to expect • Do not expect any funds within 3-5 days. At this time, expect it to take time. PPP applications and funds may be faster • NEW: grant likely to be $1,000 per employee, so only employer with 10 or more will get the full $10,000 cash advance. • Even if denied for the loan, the cash advance received will not have to be repaid • You do not have to take a loan to get the cash advance • The EIDL loan amount is based on information submitted on the application
CARES Act Paycheck Protection Program (PPP) PPP provides small businesses with funds to pay for the following for up to 8 weeks, immediately following date of the loan: – Payroll costs including benefits – Interest on mortgages (as long as obligated prior to 2/15/20) – Rent (as long as obligated prior to 2/15/20) – Utilities (for services begun before 2/15/200 The loan is forgiven proportionally to maintaining employees and pay from before or re ‐ hiring by June 30, 2020. Sources: Treasury.gov & U.S. Chamber of Commerce
PPP: WHO is eligible? You are eligible if you are: • A small business (not more than 500 employees) • If you are in the accommodation and food services sector (NAICS 72), the 500 ‐ employee rule is applied on a per physical location basis • An individual who operates as a sole proprietor • An individual who operates as independent contractor • An individual who is self ‐ employed who regularly carries on any trade or business • A 501(c)(3) and 501(c)19 non ‐ profits • Faith ‐ based organizations, even if not providing secular service
PPP: WHEN Can I Apply? • A small business (less than 500 employees) • If you are in the accommodation and food services sector (NAICS 72), the 500 ‐ employee rule is applied on a per physical location basis • An individual who operates as a sole proprietor • An individual who operates as independent contractor • An individual who is self ‐ employed who regularly carries on any trade or business • A 501(c)(3) and 501(c)19 non ‐ profits • Faith ‐ based organizations, even if not providing secular service
PPP: WHEN do I apply? • Participating private lenders (approved SBA lender) • Started April 3, 2020 for small businesses and sole proprietorships • Starting April 10, 2020 for independent contractors, self ‐ employed individuals, non ‐ profits • Program is open until June 30, 2020 but you are strongly encouraged to apply earlier due to limited funds.
PPP: WHERE do I apply? • Apply through any participating SBA lender—but in reality, who you already bank with. • Consult with your local lender as to whether it is participating. Locally, Atlantic Union, Carter and Skyline Banks are participating. • A list of participating lenders as well as additional information and full terms can be found at www.sba.gov. Wells Fargo not taking apps. • No Fees: Neither the government nor lenders will charge small businesses any fees
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