31March 2020
3/31/20 Update: The U.S. Chamber of commerce created a helpful PDF the boils down the new emergency loan process ushered in by the CARES Act. We’ve simplified it even further, and also have it for you.
Here are a few new things we learned:
- Part-time and full-time staff should be included in your employee count
- Collateral or a personal guarantee is not necessary to receive a relief loan
- You will have to prove that you were in operation before February 15, 2020, and paid staff and payroll taxes
- You must prove you’ll use the loan to pay workers, your mortgage/lease and/or utilities
- You cannot have a currently pending application for the same purposes (e.g. maintaining payroll)
- If you’ve taken out a loan for the same purposes since February 15, 2020, you need to ask your lender about folding that loan into these new loans
- The most you can borrow is 2.5x your average monthly payroll costs (up to $10 million)
- Provisions that CANNOT be included in qualifying payroll costs — compensation for annual salaries exceeding $100,000, payroll taxes, income taxes, and compensation paid to employees residing outside the U.S.
You can download the U.S. Chamber of Commerce’s helpful PDF here. It features simple equations that will help you determine how much you can borrow and how much can of your loan can be forgiven.
Importantly:
A list of lenders offering relief under the CARES Act lending program will be released soon. We’ll have that list for you as soon as it’s released.
It’s being reported that loans will be available on Friday.
So, what can you do right now to ensure your small business benefits from this stimulus?
Contact your bank. Discuss your options.
If your area is eligible, you can apply now for an SBA economic injury disaster loan. By simply applying (once the bill is signed into law), you should receive a $10,000 grant as a cash advance within 3 days even if your loan application is denied.
You may be wondering… How will this bill affect my workers and other workers all over the country?
Here’s what we know about how this bill affects workers:
The bill includes relief for American workers in the form of $1,200 one-time payments to employees making less than $75,000, scaling down $5 for every $100 the taxpayer makes. Working parents are eligible to $500 in relief per dependent child. It’s being reported that relief payments are capped at $3,000.
In addition, unemployment benefits have been boosted and will include relief for gig economy workers like freelancers and independent contractors who are not employed full time by a single employer. Examples of gig economy workers include Uber drivers and delivery service drivers.
Then check the SBA’s disaster relief section of its website to see if businesses in your area can apply.
We found this blog post helpful in explaining the tax provisions included in the CARES Act.
Disclaimer: Maximize Printing is not a financial institution and any financial decisions you or your business undertakes should be made in close consultation with your bank or chosen financial professional. We’re just trying to gather information relevant to small businesses, streamline it and present it to you daily.
Now is the time to support each other and remember that we’re all in this together — and we’ll get through it together.
Tony & Yolanda
Here at Maximize Printing, we are committed to staying open, serving small businesses and delivering all current, future and in-process orders and direct mail campaigns without halt despite COVID-19.