Overview Of Resources For Small Businesses Impacted By Coronavirus
The unique coronavirus pandemic spread around the world, wreaking havoc on millions of individuals in over 100 nations.
Aside from the terrible health consequences, the pandemic's aftermath has had a widespread impact on small companies – as many were forced to cease or curtail operations and even lose personnel due to sickness.
We've long understood that small companies are at the core of the American economy but the epidemic has reminded just how true that is.
As small companies struggle to operate or reopen in restricted capacities American society comes to a standstill, millions of company owners and their employees cling to their way of life by a thread.
Latest Updates On PPP Loans
Congress authorized $284.5 billion in additional Paycheck Protection Program money as a wider relief package.
The new bill broadens the sorts of enterprises and sectors eligible for PPP financing. Furthermore, firms that can show a 25% drop in gross receipts year over year. And fulfill additional requirements may be eligible for a second PPP loan.
- Borrowers must now spend at least 60% of their loan on payroll expenditures to achieve complete forgiveness with 40% or less available for rent, utilities and mortgage interest
- Borrowers will have 10 months from the end of their covered term to request forgiveness
- For debt amounts that have not been forgiven the term of PPP loans has been increased from two to five years
- The loan forgiveness term has been increased from eight weeks to 24 weeks or until December 31, 2020 whichever comes first
- Borrowers who attempted to rehire personnel within the safe harbor period but could not do so by December 31, 2020 would not be punished if they submitted two "good faith" certificates
- Borrowers who asked for PPP forgiveness may now postpone payment of the employer's part of payroll taxes as permitted by Section 2302 of the CARES Act
Applying For And Using A PPP Loan
Other loan programs, newly formed tax credits and cash loans to people and company owners are just a few of the ways the government has attempted to support the private sector. Until the public health emergency is ended.
For the time being, it's uncertain if these initiatives will be enough as it is very important to keep American small companies afloat in the long run.
There has also been an outpouring of support from private groups and NGOs. As well as ordinary Americans who wish to demonstrate their support for the companies that comprise their towns.
Two PPP loan applications are available from the SBA. SBA Form 2483 for first-time PPP borrowers and SBA Form 2483-SD for second-draw loans.
Most lenders will utilize these forms which asks for information such as:
- Name of the company, DBA, address of the company, EIN/SSN and contact information
- Average monthly payroll (learn how to compute your own), loan request amount, number of employees and loan purpose
- Ownership information for all applicants who hold 20% or more of the company
- Certifications of good faith that the coronavirus epidemic has impacted your company
Alternatives To PPP Loans
There is still hope if you are not eligible for a PPP loan. The same is true for enterprises that believe that as generous as the PPP loan is, it is not suitable for their current needs.
Investigate Other Loan Options
The PPP is the most important coronavirus business lending program but it is not the only one.
You can also apply for an Economic Injury Disaster Loan albeit owing to restricted financing. EIDLs are only accessible to new agricultural company applicants as of this writing.
If you meet the requirements for an EIDL then you can apply directly to the SBA. They provide a low-interest loan as well as a cash advance of up to $10,000.
Furthermore, the Federal Reserve is launching a Main Street Lending Program to provide loans to small and medium-sized companies affected by the epidemic.
Make Use Of The Employee Retention Credit
Another option for businesses in need of financial assistance is to take advantage of the Employee Retention Credit. A 100% refundable payroll tax credit created by the CARES Act.
If a small firm obtains a PPP loan it cannot use this credit and vice versa. To be eligible enterprises must have either wholly or partially ceased operations. During any calendar quarter in 2020 owing to government orders. Or have seen a decrease in gross receipts in a calendar quarter compared to the previous year.
Submit A Grant Application
Grants for small enterprises have always been competitive. And this will continue to be the case during the epidemic and its aftermath.
However, there are more grant alternatives for small firms than ever before. As private sector enterprises and other organizations give grants and other credits.
We have compiled a list of small business grants for your consideration.
Keep An Eye Out For Future Stimulus Packages
The next step of the coronavirus stimulus legislation. This may involve a new infusion of funds into the PPP and it will be introduced in Congress soon.
The government may potentially take advantage of this chance to modify the PPP parameters or fund an entirely new loan program with alternative criteria.
In the meantime, prepare your documentation and identify a lender that accepts and processes PPP loan applications. So you may be ready for whatever new law makes accessible.
Operating Your Business During Coronavirus
When the coronavirus pandemic first reached the United States a combination of stay-at-home orders led to a decline in consumer demand. And widespread illness led companies across the country to close, limit operations or change their plans.
Many businesses were forced to lay off or furlough their employees due to these necessary measures. Although we are not "back to normal" we are not in the same scenario as in March and April 2020.
In the event of a pandemic, conveying to your staff how your business has changed in the previous few months, new safety precautions, hygiene and cleaning methods, distance regulations, and so much has happened.
If you laid off employees due to the pandemic your first step should be to rehire those same personnel.
Rehiring employees you fired off decreases your liabilities. And the likelihood that a former employee would file a wrongful termination claim.
Rehiring former employees also reduces the amount of time you'll need to spend onboarding new personnel. As they are already familiar with your processes and culture. It can also improve business morale.
If you cannot bring back your complete staff at once base your judgments on non-discriminatory business decisions on those who do return.