Business 4 Good
We continue to be inspired by Temple Chamber Member businesses stepping up to support community amid the Coronoavirus pandemic.
H-E-BH-E-B gives $3 Million for Coronavirus Community Support
(Among Countless Other Initiatives) |
The Gin |
La Riv Kitchen & BarLa Riv is providing free pasta meals to Families in Need
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SubwaySubway provides weekly meal to Healthcare workers
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Pizza HutPizza Hut (W. Adams) provided lunch to Temple ISD as they transitioned to Remote Learning
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Bird Creek Burger Co.Bird Creek Burger Co. provided lunch to Temple ISD Nutrition Team and The 411 House
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overview
Two main funding options are outlined in the CARES Act, however additional programs are available to help support businesses.
1) Emergency Economic Injury Disaster Loan (EIDL) |
Expanded - $10 Billion
|
2) Paycheck Protection Program (PPP) |
New - $350 Billion
|
With the passage of the CARES Act, the existing SBA Economic Injury Disaster Loans (EIDLs) program is modified to meet the unique needs of business owners during the pandemic. In addition, there is a NEW loan program to help small businesses – Paycheck Protection Loan Guarantee (more below).
Financial Options for Small Businesses
Do you need?
- Capital to cover the cost of retaining employees?
Then the Paycheck Protection Program might be right for you. - A smaller amount to cover you right now?
You might want to look into the $10,000 emergency grant cash advance available through the SBA Economic Injury Disaster Loan (EIDL) program.
Emergency Economic Injury Disaster Loan (EIDL)
The SBA’s Economic Injury Disaster Loans (EIDLs) are part of an existing program that makes loans available in the event of a disaster. The CARES Act made several changes to expand the program due to the COVID-19 pandemic.
These changes include:
Apply for these loans directly through the SBA at www.SBA.gov/disaster. There are no loan fees, guarantee fees or prepayment fees. The site is still being updated, so you may have to wait a few days to start. When the application is up and running, make sure to apply for Economic Injury for the Coronavirus, rather than physical damage due to another disaster (that is a different declaration number).
These changes include:
- EIDLs are now also available to Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees. They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors.
- EIDLs can be approved by the SBA based solely on an applicant’s credit score.
- EIDLs that are smaller than $200,000 can be approved without a personal guarantee.
- Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.
- The $10,000 emergency cash grants are interesting – applicants can get the emergency cash even if they don’t qualify for additional funds. The review process should go quickly as lending decisions are based on self-certification and the applicant’s credit score. CARES also waives the requirement that you be unable to obtain credit elsewhere, meaning you can apply even if you already have a credit line.
Apply for these loans directly through the SBA at www.SBA.gov/disaster. There are no loan fees, guarantee fees or prepayment fees. The site is still being updated, so you may have to wait a few days to start. When the application is up and running, make sure to apply for Economic Injury for the Coronavirus, rather than physical damage due to another disaster (that is a different declaration number).
Paycheck Protection Program (PPP)
The SBA’s Paycheck Protection Program (PPP) Loan Guarantee program backs small-business loans through local lenders. The SBA is currently working to expand the number of lenders.
Eligibility
NOTE: The 500-employee threshold includes all employees: full-time, part-time, and any other status. Applications need to have been in operation before February 15, 2020.
PPP Terms
Loans are forgiven when the proceeds are used for any of these costs:
In order for the amounts to be forgiven, you must maintain the same number of employees from February 15, 2020 through June 30, 2020, as you did during either the same period in 2019 (2/15/20 – 6/30/19) or from January 1, 2020 until February 15, 2020. If you don’t meet this requirement, the amount forgiven is reduced. You incur additional reductions if you cut compensation for employees who make under $100,000 by more than 25%, as compared to the most recent quarter. (The US Chamber of Commerce offers a step-by-step calculation here).
EXCEPTION: if you rehire employee that you previously laid off, or restore any decreases in wages or salaries that were made at the before the period began (2.15.20) by June 30, 2020, you will not be penalized for having had a reduction in employees or wages.
Eligibility
- A small business with fewer than 500 employees
- A small business that otherwise meets the SBA’s size standard
- A 501(c)(3) nonprofit with fewer than 500 employees
- An individual who operates as a sole proprietor
- An individual who operates as an independent contractor
- An individual who is self-employed who regularly carries on any trade or business
- A Tribal business concern that meets the SBA size standard
- A 501(c)(19) Veterans Organization that meets the SBA size standard
NOTE: The 500-employee threshold includes all employees: full-time, part-time, and any other status. Applications need to have been in operation before February 15, 2020.
PPP Terms
- Loans can be up to 2.5x the borrower’s average monthly payroll costs, not to exceed $10 million. See Section 3 for a worksheet.
- The maximum interest rate under this program is 4%
- The loan term is up to 10 years
- No personal guarantee or collateral is required for the loan
- Payments are deferred up to six to 12 months
- Part of this loan may be forgiven and not counted as income to you, if it’s spent during the first week on operating expenses.
Loans are forgiven when the proceeds are used for any of these costs:
- Payroll costs, excluding prorated amounts for individuals with compensation greater than $100,000
- Rent pursuant to a lease in force before February 15, 2020
- Electricity, gas, water, transportation, telephone, or internet access expenses for services which began before February 15, 2020
- Group health insurance premiums and other healthcare costs.
In order for the amounts to be forgiven, you must maintain the same number of employees from February 15, 2020 through June 30, 2020, as you did during either the same period in 2019 (2/15/20 – 6/30/19) or from January 1, 2020 until February 15, 2020. If you don’t meet this requirement, the amount forgiven is reduced. You incur additional reductions if you cut compensation for employees who make under $100,000 by more than 25%, as compared to the most recent quarter. (The US Chamber of Commerce offers a step-by-step calculation here).
EXCEPTION: if you rehire employee that you previously laid off, or restore any decreases in wages or salaries that were made at the before the period began (2.15.20) by June 30, 2020, you will not be penalized for having had a reduction in employees or wages.
| u.s._senate_committee_on_small_business___entrepreneurship_-_small_business_owners_guide_to_the_cares_act_-_final.pdf |
| u.s._chamber_-emergency_loan_summary.pdf |
