Last Updated: 4/1/2020
Initially, this document was just about the EIDL grant. I’m slowly adding new resources
Overview Of Resources
Here is a solid document that overviews some of the programs:
If you want to read the source document a lot of this comes from here is the actual bill in all of its 820 pages of glory.
Below, I cover a few of these elements (and will likely add more).
- Paycheck Protection Program (encourages owners to keep employee hours up by offering to reimburse these expenses)
- Families First Response Act (80 hours of paid sick time for employees mandate)
- EIDL Grant with some Disaster Relief Info (loan at about 4% interest to help cover operational expenses and potential grant you don’t have to pay back for $10K)
Additional Overview Information
If you are looking for more information a local CPA shared some solid introduction videos you may find helpful.
Part 1: Individual Stimulus Payments https://youtu.be/bc64wATWeAw (those $1,200 checks and the details to help explain it)
Part 2: Small Business Changes https://youtu.be/tq4CnQsD210 (landscape of what is available for small businesses)
Part 3: SBA Loans https://youtu.be/gkj-kgfoksc (explains freeze on SBA loan payments being due. Watch if you currently have an SBA loan)
Part 4: Retirement https://youtu.be/ysIanVGkAvI (retirement age information)
Part 5: Student Loans https://youtu.be/0s8b6Axmru4 (student loan payment freezes)
Part 6: Charitable Contributions https://youtu.be/vecwp3f_mxc
Part 7: Misc – NOL, Business Interest, College Grants, HSA https://youtu.be/yflDXQAn3wM (catch-all)
Paycheck Protection Program
The Paycheck Protection Program (PPP) helps businesses cover payroll.
Here is the main site with the applications on it: https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses
For info on how a borrower can apply, you can check this out: https://home.treasury.gov/system/files/136/PPP–Fact-Sheet.pdf
And the actual form is here: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Families First Coronavirus Response Act
(This is the one that mandates 80 hrs of paid sick pay to employees of companies with under 500 employees when those employees are forced to call in sick due to the Coronavirus.
Note: There looks to be an exception for businesses under 50 employees if paying sick pay wouldn’t be viable for the company to stay in business. As of right now it sounds like they are still ironing out these details and qualifications.)
Here is a great FAQ to get you started with some info.
https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
Info for employers: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
Quick Reference Graphic
EIDL Grant ($10K Advance that you don’t have to pay back) as part of the Disaster Relief Loan
Goal
The goal here is to help you understand the landscape of this $10,000 of free money to business owners.
(No Nigerian Princes are involved in this….)
DISCLAIMER: I’m NOT advising you to pursue or not pursue it.
(And I won’t. I can’t be liable for that type of stuff! Talk to a lawyer or accountant or someone if you need to. Honestly, though, this is so new that I doubt that there will be many people confident giving advice over it so you’ll probably have to make your own decisions.)
I’m trying to provide you some of the source documents so you can dive deeper into research if it makes sense to you.
Finally, since the guidelines are so broad, it DOES seem that many businesses could be justified in applying for this, but you have to feel out if it is right for you.
The Stimulus Package Passed. Why you may care…
When the Stimulus Relief Package was passed the other day there were some various elements that affect people in different ways. Many of them are being reported in a fairly transparent way
Specifically though for you as a business owner, I wanted to give you some basic info on the $10,000 Stimulus Package Forgivable Loan. This is really a grant named in a confusing way. A loan has to be paid back, typically with interest, whereas this would be money you would just keep. This grant is set up to be sent in advance of a loan received.
Here is a short video of me explaining it at my current level of understanding.
Watch this video to get a brief overview
So, How Hard Is Filing?
If you decide you DO want to file, you basically fill out a handful of forms on the SBA website.
This video seems to walk through the actual nuts and bolts of the filing process really well.
Watch this guy explain how to fill out the forms in this video.
It doesn’t look like Filing is very hard!
So, in case you are just skimming this email to get started, please note.
1.) There is a limited amount of grant money that they will be paying out basically on a first come first serve basis. There is DEFINITELY not enough to go around. If this is a fit for you, DO IT NOW!!!
2.) Please double-check the actual source document before moving forward to make sure you don’t fall into an obscure crack. If you move forward, this is on you.
3.) If you have someone you know who should also know about this, please share! If you’d like to keep updated as new info comes out, subscribe here.
The Source Document
Here is the link that goes directly to the bill that passed (it is 820 pages! Section 1110 is where you’ll learn about the EIDL grant).
I will also copy and paste the actual content of that section later in this email to make it easier to read.
If you are interested, it is really up to you to figure all of this out.
Disclaimer repeated: I’m not a lawyer or accountant and I am not offering professional advice!
Like most things within the law, it seems to come down to understanding the intent of the law and determining if you have a strong enough case to be made that pushing forward makes sense for you and that you are willing to risk someone calling you to task on that. Evaluating if you are confident in your interpretation and are prepared to make a case can help you determine whether moving forward or not makes sense. You also have to weigh how well the reward outweighs the risk in light of all of that.
Read the source and how it applies to better understand everything.
Source Document Copy And Pasted From Original Document Linked Above
SEC. 1110. EMERGENCY EIDL GRANTS.(a) Definitions.—In this section—
(1) the term “covered period” means the period beginning on January 31, 2020 and ending on December 31, 2020; and
(2) the term “eligible entity” means—
(A) a business with not more than 500 employees;
(B) any individual who operates under a sole proprietorship, with or without employees, or as an independent contractor;
(C) a cooperative with not more than 500 employees;
(D) an ESOP (as defined in section 3 of the Small Business Act (15 U.S.C. 632)) with not more than 500 employees; or
(E) a tribal small business concern, as described in section 31(b)(2)(C) of the Small Business Act (15 U.S.C. 657a(b)(2)(C)), with not more than 500 employees.
(b) Eligible Entities.—During the covered period, in addition to small business concerns, private nonprofit organizations, and small agricultural cooperatives, an eligible entity shall be eligible for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).
(c) Terms; Credit Elsewhere.—With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 during the covered period, the Administrator shall waive—
(1) any rules related the personal guarantee on advances and loans of not more than $200,000 during the covered period for all applicants;
(2) the requirement that an applicant needs to be in business for the 1-year period before the disaster, except that no waiver may be made for a business that was not in operation on January 31, 2020; and
(3) the requirement in the flush matter following subparagraph (E) of section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), as so redesignated by subsection (f) of this section, that an applicant be unable to obtain credit elsewhere.
(d) Approval And Ability To Repay For Small Dollar Loans.—With respect to a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 during the covered period, the Administrator may—
(1) approve an applicant based solely on the credit score of the applicant and shall not require an applicant to submit a tax return or a tax return transcript for such approval; or
(2) use alternative appropriate methods to determine an applicant’s ability to repay.
(e) Emergency Grant.—
(1) IN GENERAL.—During the covered period, an entity included for eligibility in subsection (b), including small business concerns, private nonprofit organizations, and small agricultural cooperatives, that applies for a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) in response to COVID–19 may request that the Administrator provide an advance that is, subject to paragraph (3), in the amount requested by such applicant to such applicant within 3 days after the Administrator receives an application from such applicant.
(2) VERIFICATION.—Before disbursing amounts under this subsection, the Administrator shall verify that the applicant is an eligible entity by accepting a self-certification from the applicant under penalty of perjury pursuant to section 1746 of title 28 United States Code.
(3) AMOUNT.—The amount of an advance provided under this subsection shall be not more than $10,000.
(4) USE OF FUNDS.—An advance provided under this subsection may be used to address any allowable purpose for a loan made under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)), including—
(A) providing paid sick leave to employees unable to work due to the direct effect of the COVID–19;
(B) maintaining payroll to retain employees during business disruptions or substantial slowdowns;
(C) meeting increased costs to obtain materials unavailable from the applicant’s original source due to interrupted supply chains;
(D) making rent or mortgage payments; and
(E) repaying obligations that cannot be met due to revenue losses.
(5) REPAYMENT.—An applicant shall not be required to repay any amounts of an advance provided under this subsection, even if subsequently denied a loan under section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)).
(6) UNEMPLOYMENT GRANT.—If an applicant that receives an advance under this subsection transfers into, or is approved for, the loan program under section 7(a) of the Small Business Act (15 U.S.C. 636(a)), the advance amount shall be reduced from the loan forgiveness amount for a loan for payroll costs made under such section 7(a).
(7) AUTHORIZATION OF APPROPRIATIONS.—There is authorized to be appropriated to the Administration $10,000,000,000 to carry out this subsection.
(8) TERMINATION.—The authority to carry out grants under this subsection shall terminate on December 31, 2020.
(f) Emergencies Involving Federal Primary Responsibility Qualifying For SBA Assistance.—Section 7(b)(2) of the Small Business Act (15 U.S.C. 636(b)(2)) is amended—
(1) in subparagraph (A), by striking “or” at the end;
(2) in subparagraph (B), by striking “or” at the end;
(3) in subparagraph (C), by striking “or” at the end;
(4) by redesignating subparagraph (D) as subparagraph (E);
(5) by inserting after subparagraph (C) the following:
“(D) an emergency involving Federal primary responsibility determined to exist by the President under the section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)); or”; and
(6) in subparagraph (E), as so redesignated—
(A) by striking “or (C)” and inserting “(C), or (D)”;
(B) by striking “disaster declaration” each place it appears and inserting “disaster or emergency declaration”;
(C) by striking “disaster has occurred” and inserting “disaster or emergency has occurred”;
(D) by striking “such disaster” and inserting “such disaster or emergency”; and
(E) by striking “disaster stricken” and inserting “disaster- or emergency-stricken”; and
(7) in the flush matter following subparagraph (E), as so redesignated, by striking the period at the end and inserting the following: “: Provided further, That for purposes of subparagraph (D), the Administrator shall deem that such an emergency affects each State or subdivision thereof (including counties), and that each State or subdivision has sufficient economic damage to small business concerns to qualify for assistance under this paragraph and the Administrator shall accept applications for such assistance immediately.”.
That’s All Folks…
I’ve honestly contained about everything I know about this within this post, but if you have additional questions feel free to reach out. If I get overwhelmed it may take me a while to respond.
Good luck and keep staying the course through these ever-changing times.
-Lucas
Copyright © 2020 Lucas Walker Business Consulting LLC, All rights reserved.
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