UPDATE: The BizEquity Small Business Survival Guide

We are working to update our survival guide with  information as it changes... continue to check back here for relevant information.

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Updated Sections: last updated 4/24/2020

  1. Federal Government Response
  2. State Support
  3. IRS Updates
  4. SEC Updates
  5. Non-Federal Resources

Federal Government Response

**On Thursday, April 23rd, the House passed a new economic relief package. The $484 billion package includes an additional $321 billion for the newly created Paycheck Protection Program, a lending program designed to help small businesses stay afloat with forgivable loans during the crisis.

On Friday, March 27, 2020, the President signed into law the CARES Act, which contained $2 trillion in relief.

Here’s how it broke down:

  • Individuals: $560 billion (estimated)
  • Small Businesses: $377 billion
  • Big Corporations: $500 billion
  • Public Health: $153.5 billion
  • State & local governments: $339.8 billion
  • Education/other: $43.7 billion
  • Safety Net: $26 billion

Funding Options

In addition to traditional SBA funding programs, the CARES Act established several new temporary programs to address the COVID-19 outbreak.

Paycheck Protection Program (PPP)

**As of April 23, Congress passed a second round of funding ($321 billion) for the Paycheck Protection Program after the original $349 billion in funds were depleted by April 16th. 

Loans obtained through the PPP can be as high as $10 million, depending on the company's payroll size. The loans are forgivable if the money is spent to retain or rehire workers. 

To ensure that your business gets loan forgiveness, see this article from the American City Business Journals, which outlines the specific guidelines you'll need to follow. Here are 5 key takeaways:

  1. Lay out a business plan that outlines how your business will spend the loan money.
  2. Set up a new bank account specifically for your PPP loan. When you're ready to use it, transfer the funds into your operating account and make sure to keep record. 
  3. Create a spreadsheet to track how you spend your PPP loan. 
  4. Make copies of all important documents, such as checks and invoices, keeping them in a separate folder.
  5. Work with your payroll company to create a payroll run that ends with the eight weeks allocated for PPP funds. 

5 Tips on How to Boost Likelihood of Approval for PPP Applications (bizjournals.com)

An Advisor's Guide to the Paycheck Protection Program (Kitces.com)

About the Paycheck Protection Program
  • Meant to cover paying employees for the 8 weeks after you get the money (whether on payroll, or take distributions, commissions), it doesn’t matter how you pay yourself or your employees (no one needs to be on an actual payroll) 
  • No matter how much each person in your company makes (or just you), you can only ‘pay’ yourself the equivalent of $100,000/year —> so you can only pay yourself $8333.33 per month for 2 months
  • Meant to cover business rent and related expenses (utilities, etc.)
  • Called a LOAN, but is actuality a GRANT as long as you use this for the appropriate expenses (spend it all on payroll and rent and you’re good)
  • Here’s the form — however you apply through a bank, and they will likely have their own process for you to go through
  • If you an LLC or small biz, you can start applying Friday April 3rd through your bank
  • If you are an independent contractor, you can start applying Friday April 10th through your bank
  • Learn more

EIDL Loan Advance

Initially Congress allocated $10 billion for Economic Injury Disaster Recovery Loans (EIDL). As of April 23rd, the SBA has now allocated another $60 billion for EIDL and other grants. (Read More)

The SBA has also expanded eligibility for EIDL grants to include:

  • Sole proprietorships, with or without employees
  • Independent contractors
  • Business entities with 500 or fewer employees
  • Cooperatives and employee-owned businesses
  • Private non-profits or 501(c)(19) veterans organizations
  • Tribal small businesses

About EIDL

  • Another type of loan meant to help small businesses to cash fast
  • Starts as a $10,000 grant (not to be paid back) to be direct deposited to you in the next 3-10 days
  • In 45 days, the next phase of the program opens, where you can take out a low-interest loan up to $2M
  • To be used to pay employees and other business expenses 
  • Apply here  directly through the SBA (the gov’t)
  • You can apply right now, the sooner the better
  • Learn more

SBA Express Bridge Loans

  • Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
  • Learn more

SBA Debt Relief

  • The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.
  • Learn more

State Support

SF OEWD | Resources for Businesses and Employees Impacted by COVID-19

  • Official advice and resources lists from the San Francisco Office of Economic and Workforce Development.

Working Solutions | COVID-19 Resource Guide for Small Businesses

  • A superb (and regularly updated) overview of all local and federal programs offering financial assistance.

JP Morgan | Small Business Owners: CARES Act FAQ

  • Solid overview of the Economic Security Act (CARES Act) and detailed FAQs covering the Paycheck Protection Program (PPP) under the Act.

Permanent Equity | Small Business Pandemic Response Toolbox

  • Includes useful loan calculators for the Paycheck Protection Program.

IRS Updates

Coronavirus Tax Relief for Businesses and Tax-Exempt Entities

Get information on coronavirus (COVID-19) tax relief for businesses and tax-exempt entities.

Filing and Payment Deadline Extended

The deadlines to FILE and PAY federal income taxes are extended to July 15, 2020.

Get answers to your questions on the filing and payment deadline.

Employee Retention Credit Available for Many Businesses Financially Impacted by COVID-19

The Employee Retention Credit is a refundable tax credit against certain employment taxes equal to 50% of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. You can get immediate access to the credit by reducing the employment tax deposits you are otherwise required to make. Also, if your employment tax deposits are not sufficient to cover the credit, you may get an advance payment from the IRS.

Get details on the retention credit.

Coronavirus-Related Paid Leave for Workers and Tax Credits for Small- and Mid-Size Businesses

The Families First Coronavirus Response Act (PDF) gives all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee's own health needs or to care for family members.

Get details on paid leave for employees.

 

Online resources for small business and self-employed taxpayers:

Online resources for tax exempt and other entities:

See all IRS resources and guidance related to COVID-19.


SEC Updates

Guidance and Targeted Regulatory Assistance and Relief

  • The Commission and staff are working to promptly provide guidance to market participants and targeted regulatory assistance and relief where necessary or appropriate. Below is a chronological list of certain of the more significant actions we have taken to date:

April 2020


Non-Federal Resources

For a current and substantial list of non-federal resources available for the assistance of small businesses and their owners, including:

  • State and Local Coronavirus Small Business Assistance 
  • Federal Business Grants for Small Business
  • Additional State and Private Sector Resources
  • Webinars and Free Resources

CLICK HERE