The president recently signed into law the latest relief package from Congress, the Coronavirus Aid, Relief, and Economic Security (CARES) Act - but what does this mean for your business? When I was helping to finalize this legislation, it was a priority of mine that businesses would be able to get the help they need. One of the main goals of this third package is to provide direct financial assistance for your operations so that your business can continue to make payroll and pay the bills. Congress has created and expanded a few avenues for you to seek help. From one former small business owner, here are some answers to your questions about what is in this for you.
One form of assistance is the Paycheck Protection Program (PPP) that was created to provide potentially forgivable loans to pay for 8 weeks of payroll and operational costs. Who is eligible to apply? All businesses with 500 employees or less, or businesses that qualify as employee-based size standard through SBA. Tribal businesses, 501(c)(19) veteran organizations, 501(c)(3) nonprofits, along with independent contractors, gig economy workers and self-employed are all eligible.
The new loan program says the 8-week period can be any time between February 15, 2020 and June 30, 2020, with June 30, 2020 being the last day to apply. Once you take out this loan, it could be forgiven at the end of your 8-week period, if you adhere to a few requirements. To have the eligible amount of the loan forgiven, your business must keep all of your employees on payroll. If your business has already laid off employees, your loan could still be forgiven the eligible amount if you rehire those employees by June 30, 2020.
To apply for the Paycheck Protection Program, you can visit any lending institution that is approved to participate in the program. The pot of money is first come, first serve so it’s important that you apply as soon as possible. Ask your bank for information or find an approved lender through Small Business Administration’s online Lender Match tool. The new law says your business could borrow up to 250% of your average monthly payroll costs, with the maximum being $10 million. This new program was made to help businesses like the ones you can find all over Wyoming. This is one opportunity to help keep Wyoming employed and your business alive.
Another avenue the CARES Act creates is expanding the Small Business Administration’s Economic Injury Disaster Loans (EIDL). Through this, you could receive an emergency cash advance, which could also be forgiven if used for payroll and operational costs. There is also a chance your business could simultaneously hold a PPP and EIDL loan, if they are not used for the same costs. Ask your lender about the rules for holding both.
The IRS also introduced the Employee Retention Credit, which is a refundable tax credit worth 50% of wages up to $10,000. This is available to all types of employers, no matter the size and even including already tax-exempt organizations. In order to qualify, your business must either be fully or partially suspended by government orders concerning COVID-19, or the employer’s gross receipts are below 50% compared to the same quarter in 2019. Learn how to start receiving the credit at the IRS website.
Wyoming is proud to be a home for your small business and want to see you stay. The Wyoming Business Council has response tips for employers and employees, along with how to apply for the loans just mentioned. The Wyoming Small Business Development Network also has a service to connect you with a local financial advisor to help you with loans. You can find both of these resources on enzi.senate.gov/coronavirus where there is a span of helpful websites and congressional updates.
It takes a lot of guts and determination to start a business and Congress is here to help. Together, we will get through this pandemic.