For Release: March 27, 2020
At Narron Wenzel, P.A. we are committed to helping our clients navigate this new and difficult climate. Our attorneys and staff are on hand to help answer questions regarding your small business, and help to ensure your business has the right tools to help keep your employees paid and your business running. There are a number of new resources available to small businesses. In this post we preview two new measures already enacted by Congress and available to you as a small business owner.
The “Coronavirus Preparedness and Response Supplemental Appropriations Act” (H.R. 6074) was signed into law March 6, 2020. It allows the Small Business administration to offer $7 Billion in “low interest loans to small businesses impacted by the coronavirus.” These loans may be used by small businesses to pay fixed debts such as payroll, accounts payable, rent, and other items which cannot be paid as a result of the virus. The loans come with long-term payment options of up to thirty years to help keep payments affordable. The interest rate is up to 3.75% for small businesses without other available means of credit. Additionally, if your business has already borrowed from the SBA disaster loan program, then you should be aware that deferments through December 31, 2020, will be automatic. Please note, each loan application is reviewed on a case-by-case basis according to the borrower’s ability to repay.
Non-profits may see even lower rates and are eligible under the Act. Currently, it is unclear as to whether these loans apply to venture capitalists, and businesses with credit available elsewhere are likely not eligible under this specific program. However, as more information becomes available we will keep you informed.
The “Families First Coronavirus Response Act” (H.R. 6201) was signed into law March 18, 2020. The Act is designed to expand unemployment benefits and requires that all private businesses with fewer than 500 employees provide emergency paid sick leave or family leave for those affected by coronavirus. To offset the additional costs, the Act provides more employer tax credits for small businesses. It creates a 100% tax credit against your payroll tax liability up to the capped amount of benefits you must pay. The credit includes health insurance and promises that if you as the employer are owed more than the capped amount, the IRS will send that refund quickly. Under this act self-employed individuals will receive an equivalent credit.
In addition to funding and loan deferments, the U.S. Chamber of Commerce has launched four task forces to prepare businesses for any potential long-term economic effects of the coronavirus. One of the four task forces focuses exclusively on addressing the needs of small and medium-sized enterprises. We will attempt to provide more information to you as the purpose and resources of this task force become available.