Due to the COVID-19 situation, the Greater Merrifield Business Association (GMBA) is cancelling all in-person meetings through June 10, 2020. We are looking at hosting virtual monthly meetings and are promoting all virtual member meetings… We want our members safe, and successful!
The Board of Directors is closely monitoring the situation and will post updates on meetings (virtual or otherwise) as they arise.
Thanks to all of you for your community support and and business adjustments!
SBA’s “Paycheck Protection Program”
Applications Begin April 3
Message from Karen Kerrigan President & CEO, Small Business & Entrepreneurship Council
Small Business Insider
Business Intelligence, News and Policy Update
SBA’s “Paycheck Protection Program” Applications Begin April 3
Message from Karen Kerrigan
The U.S. Treasury and SBA have launched CARES Act “Paycheck Protection Program” (PPP) webpages, which include information for borrowers, lenders and a sample application form that small businesses will use once SBA-approved 7(a) lenders, banks, or credit unions begin taking applications on April 3 (according to U.S. Treasury).
See the SBA’s PPP page here, and the U.S. Treasury’s CARES Act page here.
The SBA also launched a new guidance page here.
According to the U.S. Treasury: “Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. We encourage you to apply as quickly as you can because there is a funding cap.”
Here are some key links for small businesses provided by U.S. Treasury:
ABOUT CARES ACT: Eligibility and “the rules.” For a top-line overview of the program, please click CLICK HERE.
SMALL BUSINESS BORROWERS: If you’re a borrower the information provided HERE is useful in filling out your PPP application, determining eligibility, etc.
PAYCHECK PROTECTION PROGRAM APPLICATION*: The application for borrowers can be found HERE
*Application and loan processing will be administered through an SBA 7(a) approved lender.
LENDERS: If you’re a lender, or want to become one, information can be found HERE
I know there are some additional guidance issues to work out, as I have been receiving questions from small business owners that require guidance. I have been sharing these questions and the need for guidance with appropriate channels.
As noted within the documents above, the network of lenders (above and beyond those already approved under the SBA 7(a) lending program) will be expanded to accept and process applications for the PPP loans. The U.S. Treasury will approve new lenders and make this list available as they approve additional lenders.
SCAMS: You knew it was going to happen. The scammers and shysters are out in full force. So beware of anyone, any website or solicitation that says you have to provide upfront capital or a credit card to apply for an SBA “economic injury disaster loan” (EIDL) or Paycheck Protection Program loan under the 7(a) loan program.
- There is no fee to apply
- No credit card information is needed
I am getting a lot of good questions from small business owners regarding the CARES Act, and hope to compile them in the next couple of days with answers. We’ve been getting a lot of questions from the self-employed and independent contractors who are not familiar with how to apply for unemployment insurance, which they now qualify for under the CARES Act.
We’ve been fielding a lot of these questions (as well as whether the self-employed and independent contractors can participate in EIDL and PPP programs – the answer, again, is yes!). As an FYI, each state administers its own unemployment insurance program, which has received a significant boost from the CARES Act. Go to the DOL page here and it will prompt you to enter your home state.
The House Ways and Means Committee Republican Team also released this very helpful “CARES Act: Unemployment Questions Answered” blog post. Share it with friend, family members, employees and colleagues.
NEW Senate Small Business Committee FAQs
In addition to their Guide for Small Business Owners on the CARES Act, the Senate Small Business Committee on Small Business and Entrepreneurship has also developed a very helpful “Frequently Asked Questions (FAQ) document. Read the FAQ here. Today we recorded a podcast with Senator Marco Rubio (R-FL), Chairman of the Committee, which will go live on social media and www.sbecouncil.org tomorrow.
I read a lot of information and expert blog posts about the CARES Act to figure out how to better convey the provisions and how they work together. I am sharing this blog post by Ascend Consulting LLC, which is run by our good friend Jacob Schroeder, CPA, the Founder & CEO of the firm. As more information and guidance becomes available about the CARES Act, we will be counting on people like Jacob and our small business advisers to more concisely inform small businesses about complex issues.
The small business community is facing its toughest challenge ever, as portrayed in this March 30 CNBC story featuring business owners and leaders Jason Duff and Adam Rammel, who are also SBE Council members. Both Jason and Adam, besides saving their own businesses, are helping other small business owners cope with the devastating economic effect of COVID-19. They are true heroes. By the way, we are hearing from our members that the new “economic injury disaster loan” (EIDL) application is indeed streamlined. This is the new application that puts your business in the system to receive an immediate $10,000 advance (in 3 days at the most, according to the CARES Act legislation), and small businesses that have already applied for an EIDL before the CARES Act passed should go back and apply for the advance using this new application.
Hang in there and keep providing us with feedback, intelligence and information on how these programs are working, and how you are coping during this challenging period.
Karen Kerrigan, President & CEO
UPDATED
SBE Council’s COVID-19 Small Business Resource Center
CARES Act: What’s in it for Small Business, the Self-Employed and Gig Workers
NEW from the US Chamber: Coronavirus Emergency Loans Small Business Guide and Checklist – The Chamber’s new guide to the questions you may be asking, and what you need to know.
CARES Act – Summary of Tax Provisions
Foley has put together a solid summary of the tax provisions in the CARES Act. As SBE Council noted in our previous editions of Small Business Insider, there are significant provisions that will be helpful to small businesses.
In addition to relief announced by U.S. Treasury regarding extension of time to file and pay taxes, the CARES Act includes additional relief and reform measures:
- Delay of payment of employer-side payroll taxes (tax payments may be delayed until January 1, 2021, with 50 percent owed on Dec. 31, 2021 and the other half owed on Dec. 31, 2022.)
- Employee Retention Credit: A refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee (including health benefits) paid by certain employers during the coronavirus crisis.
- Five-year carry back and expansion of NOLs. Firms may take net operating losses (NOLs) earned in 2018, 2019, or 2020 and carry back those losses five years.
- Loosening of business interest deduction from 30 percent of EBITDA to 50 percent of EBITDA.
- Technical correction to Qualified Improvement Property (QIP) depreciation treatment.
- Waives the 10 percent early withdrawal penalty on retirement account distributions for taxpayers facing virus-related economic challenges. Withdrawn amounts are taxable over three years, but taxpayers can recontribute the withdrawn funds into their retirement accounts for three years without affecting retirement account caps. Minimum distribution rules for certain retirement plans in calendar year 2020 are waived.
- Health savings accounts (HSA) changes related to OTC purchases of coronavirus treatments and other changes.
The Foley blog post covers these items in more detail.
Latest Guidance from Department of Labor on Emergency Paid Sick Leave and FMLA Expansion in Phase II Coronavirus Response Legislation
On March 28, the U.S. Department of Labor’s Wage and Hour Division (WHD) published additional guidance about the paid sick leave and medical leave expansion within the Families First Coronavirus Response Act (FFCRA), which was the Phase II response legislation, when it goes into effect on April 1, 2020.
SEE SBE Council’s blog post on the first round of guidance, including important information about the tax credits.
The latest round of guidance includes 59 questions and answers addressing critical issues such as the definition of a “health care provider,” and the scope of the small business exemption for purposes of exclusion from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act. WHD recently released posters and fact sheets in Spanish on its COVID-19 website.
Questions 58 and 59 provide guidance on the exemption for small businesses from the paid leave mandate:
When does the small business exemption apply to exclude a small business from the provisions of the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act?
An employer, including a religious or nonprofit organization, with fewer than 50 employees (small business) is exempt from providing (a) paid sick leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons and (b) expanded family and medical leave due to school or place of care closures or child care provider unavailability for COVID-19 related reasons when doing so would jeopardize the viability of the small business as a going concern. A small business may claim this exemption if an authorized officer of the business has determined that:
- The provision of paid sick leave or expanded family and medical leave would result in the small business’s expenses and financial obligations exceeding available business revenues and cause the small business to cease operating at a minimal capacity;
- The absence of the employee or employees requesting paid sick leave or expanded family and medical leave would entail a substantial risk to the financial health or operational capabilities of the small business because of their specialized skills, knowledge of the business, or responsibilities; or
- There are not sufficient workers who are able, willing, and qualified, and who will be available at the time and place needed, to perform the labor or services provided by the employee or employees requesting paid sick leave or expanded family and medical leave, and these labor or services are needed for the small business to operate at a minimal capacity.
If I am a small business with fewer than 50 employees, am I exempt from the requirements to provide paid sick leave or expanded family and medical leave?
A small business is exempt from certain paid sick leave and expanded family and medical leave requirements if providing an employee such leave would jeopardize the viability of the business as a going concern. This means a small business is exempt from mandated paid sick leave or expanded family and medical leave requirements only if the:
employer employs fewer than 50 employees;
- leave is requested because the child’s school or place of care is closed, or child care provider is unavailable, due to COVID-19 related reasons; and
- an authorized officer of the business has determined that at least one of the three conditions described in Question 58 is satisfied.
Visit the Department of Labor WHD COVID-19 resource page here.
Tips and Actions to Stay Afloat: Ask the Sharks
Good Morning America is running a week-long series, which asks “the Sharks” what small businesses need to be doing. In the first segment Daymond John and Kevin O’Leary address: cutting costs and negotiating bills and payments, going virtual, getting good ideas from employees for doing new things to drive new revenues, and staying relevant with current customers. Both believe that gift cards/certificates are a bad idea. As Kevin O’Leary said: “The key is to survive, to stay alive…to keep the DNA of the business intact.” Watch the segment here, or by clicking below.
Protecting Small Business, Promoting Entrepreneurship
GMBA COVID-19 Resources
Please refer to the GMBA Website for COVID-19 Resources/Links
https://www.greatermerrifield.org/covid-19-business-resources
Be Safe and Support Local Business
We urge everyone to be diligent regarding personal health issues, we would like to remind our community that this is a particularly difficult time for our small businesses and their employees. We encourage everyone to consider ways in which to support the local businesses while staying safe, such as:
- Arranging virtual meetings for professional services
- Shopping on-line with local businesses
- Take advantage of curb-side pick-up from participating retailers
- Ordering take-out and delivery from local restaurants
- Make payments over the phone with credit card
- Arrange virtual appointments with health care professionals
- Buying gift cards for future pick-up and use
- Keeping your memberships current
- Ask business owners how you can support them
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