Covid-19 relief package for small businesses

[Scottintexas]

I thought I might start a thread about relief available;
Individuals are supposed to get a check direct and as I understand it will be reconciled on your 2020 tax filing (your dependents or income changed since the 2018 or 2019 filing the gov't went off of)

For small businesses like I have they are also providing "loans" for payroll, rent and utilities that if you maintain your status quo through two months they loan will be "forgiven". I'm not one for believing anything is free and there are always strings attached (more than the string that generations of American workers will pay for this free giveaway).

The participating banks and credit unions are not supposed to be processing these loans until April 3rd but the link below details the information and has a sample application form (it does appear to very short and simple) for review.

Paycheck Protection Program

An SBA loan that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis.

www.sba.gov

If anyone participates or hears more about this program or strings attached that will bite you on the back end I'd be interested to hear about it ( I've got to get a new accountant!)

@Bruce @zipper @J-RAD @djetok or any of our other small business/self employed members,

 

[Scottintexas]

also just found out from my account small business may be eligible for $10k loan (immediately forgiven) under disaster relief,
this money is available now, first come/first serve so it may run out if you wait to file,

COVID-19 Economic Injury Disaster Loan | U.S. Small Business Administration

www.sba.gov

It has a simple for page application and money goes directly to your bank account and you can double dip with the Payroll program,

.

 

[captras]

Good luck to you Scott! Small business is the backbone of America!

 

[J-RAD]

@Scottintexas, thanks for the tag. I've been hearing about these relief loans a bit but, I haven't given much thought to one. Our state has been offering low intrest SBA loans. This one sounds different with the forgiveness option. Frankly I haven't looked because my cabinet business has still been able to operate relatively unaffected by things. That's because it's just me and my brother in the shop for the next few weeks building the next project, and upcoming projects that are in the building process are still being built. We don't currently have any additional employees, so I'm not sure if we'd meet all the criteria. Hardware and construction related industries have for the most part been labeled "essential business" so we've still had access to materials. But, I'll have to look into it more. If they're giving away free money (no such thing) I'll take it!

 

[Sbrown]

I filed for it last night, I'll let you know how it goes.

 

[Beachbummer]

I work for a Bank in the IT area. the full guidelines for application are expected tomorrow. I understand one of the "fast track" approval programs will be based on your payroll amount, so if you are looking to participate be sure to be ready with your Payroll info.

This is my humble suggestion... as this is an SBA program, your bank will drive the process, contact your bank and follow their indications. Ultimately they will be approving the loan (when it meets the criteria set by the Feds for approval)

Best of Luck!

 

[Sbrown]

There appears to be a few different programs going on right now. Some seem designed to help small sole proprietorships and sole member LLCs with few or no employees, and some seem designed to help with payroll and other fixed expenses for businesses with up to 500 employees. The amount that may be forgiven seems to be in a large part dependent on how the money gets used in any particular case.

 

[Scottintexas]

There are programs that give (loans are forgiven) a small business money, both are linked in my first two posts

Disaster relief - $10k loan/grant - this is an internet application, very basic, name, EIN, bank info, certify money to be used for business and in 3 days the money is supposed to be deposited in your bank account and is immediately forgiven. This program started on Monday and there is only a certain amount of money available for disbursement, if you're interested it's better to apply now, in two weeks it may be gone and no longer available.

Payroll Protection Program - This is a loan from a bank through the SBA, it is a very simple 2 page application and you may borrow 2.5 x your monthly payroll (including health insurance and retirement contributions with a total limit of $100k yearly per employee for the monthly avg. calculation), if you use that money for payroll (or less than 25% for rent/utilities) and don't lay anyone off in the first eight weeks you can apply to the bank for the loan to be "forgiven"
This program is supposed to start today but as of 5pm yesterday my bank still wasn't sure how it was going to be administrated.



.

 

[Scottintexas]

I found this FAQ from the senate sub committee and the very last paragraph state if you receive the $10k grant and a PPP loan, $10k of the PPP loan would not be "forgivable".

still waiting for the banks to open the PPP program,

https://www.bbvausa.com/content/dam/bbva/usa/en/pdf/smallbusiness/paycheck-protection-program-faqs-for-small-businesses-final-ussenate-committe-on-small-business.pdf

 

[Bearsar240]

My wife had to close her buisness. There is so much confusion between the PPP and the EIDL. Her tax person says she would have to pay back the EIDL, the way I read it is you don't have to because it's a grant? The PPP worries me because they state you have to ask for forgiveness....? Any thoughts?

 

[Scottintexas]

I'll respond later tonight from my computer

 

[Bearsar240]

I filed for it last night, I'll let you know how it goes.

What one did you apply for, the EIDL or PPP?

 

[Scottintexas]

I am applying for both,

let me say I'm not an accountant or lawyer, just a small business owner,

early in the week I was lead to believe we could do both but now with the link earlier from the Senate sub committee I think if you had already applied or received EIDL you have the subtract or that amount wouldn't be forgiven if your receive the PPP (or you just pay it back with the PPP money)

I'm sorry to hear about her business, I'm sure we'll be hearing about a lot of others that will be in the same situation.

if she has already decided to close but hasn't filed any "closure" documents I would suggest just applying for the EIDL.
If she thinks she's going to try to keep it going I would say the PPP but the stipulations that you have to keep your employees or that money is not "forgiven". it may be the case though at the interest rate it's worth getting the cash to keep going even if you can't keep .your employees.

The application for the forgiving of the PPP I think will be as easy as submitting your proof (payroll reports/941, health care, rent receipts) to the bank that provided the loan.

my BBVA/compass bank shut the PPP applications down this morning because they were already overwhelmed and said they wouldn't be processing any new applications until the current ones were handled.

my Delta Employees credit union was still accepting new applications today (not surprising as I'm sure they have many less business clients)

I was lucky enough to have business accounts at two different banks,

 

[Bearsar240]

Thanks for the input. She has no employees just a store front with rent and the standard Bill's. She will reopen when allowed. They sure did make it confusing. We were thinking if applying for both and if they tell us we have to pay it back we do, at a good rate if they don't change it again.

 

[Sbrown]

What one did you apply for, the EIDL or PPP?

I applied for EIDL. Havent heard anything back yet

 

[F.M.]

I applied for the $10k this morning, I don't have any employees other that my wife, myself and occasionally my daughter, so I don't want/need anything for payroll or anything I have to repay.

 

[F.M.]

Thanks @Scottintexas by the way for posting about it. I don't watch or read the news much at all, so I didn't know this even existed until you posted it. If I get approved, I'll owe you a 6 pack of your favorite brew for showing me how to collect a little income while we're not able to work.

 

[Bearsar240]

Thanks @Scottintexas by the way for posting about it. I don't watch or read the news much at all, so I didn't know this even existed until you posted it. If I get approved, I'll owe you a 6 pack of your favorite brew for showing me how to collect a little income while we're not able to work.

So you applied for the EIDL grant? Am I right by thinking this is forgiven if you use it for payroll,rent and other eligivle expenses? The gov website is pretty horrible when it comes to figuring out which program to apply for. My wife is sole proprietor with no employees and hasn't had income since March 9th, so we are just trying to figure this out!

 

[Scottintexas]

So you applied for the EIDL grant? Am I right by thinking this is forgiven if you use it for payroll,rent and other eligivle expenses? The gov website is pretty horrible when it comes to figuring out which program to apply for. My wife is sole proprietor with no employees and hasn't had income since March 9th, so we are just trying to figure this out!

the EIDL is the $10k disaster relief, it is a internet submitted application to the SBA, it comes directly from the govt to your bank account, no lending institution is involved (supposedly in 3 days). It is immediately forgiven and you can use it for certain things to keep your business open.

The PPP is a SBA loan for 2.5x your monthly payroll/healthcare/retirement contributions that you have to submit your application to the bank and if you use it for payroll items or max. 25% for rent/utilities and don't lay anyone off for 8 weeks after the loan you can go back to the bank with your proof of payroll and they will forgive it.

They are actually making both of these extremely easy considering the money they're giving out,

 

[Bearsar240]

the EIDL is the $10k disaster relief, it is a internet submitted application to the SBA, it comes directly from the govt to your bank account, no lending institution is involved (supposedly in 3 days). It is immediately forgiven and you can use it for certain things to keep your business open.

The PPP is a SBA loan for 2.5x your monthly payroll/healthcare/retirement contributions that you have to submit your application to the bank and if you use it for payroll items or max. 25% for rent/utilities and don't lay anyone off for 8 weeks after the loan you can go back to the bank with your proof of payroll and they will forgive it.

They are actually making both of these extremely easy considering the money they're giving out,

Thank you Sir!