US Laws & Recovery Efforts Business & Economic Impact of COVID-19

If the loan application is approved, the loan will be disbursed directly to the borrower. As elected officials wrestle with those decisions, they should know that ARP will be their best—and maybe only—shot at stabilizing small businesses and helping them recover. In the coming weeks, Brookings Metro will provide a series of products that offer practical guidance to city leaders as they reassess their small business needs and prioritize transformative investments in support of a dynamic and equitable small business economy. Even though the American Rescue Plan has been billed as the Biden administration’s “relief package”—with “recovery packages” focused on the nation’s physical and human infrastructure forthcoming—city leaders are treating ARP as a balance between relief and recovery. Where cities ultimately strike that balance will vary based on local economic conditions, institutional capacity, and political priorities.

The Special Inspector General, who will be nominated by the president and confirmed by the Senate, is charged with auditing and investigating the granting, purchase management, and sale of loans, loan guarantees, and other investments made under the program. The CARES Act authorizes a total of $500 billion to provide liquidity to businesses that are suffering the most from this crisis. Small businesses—and the entrepreneurs that start and scale them—can be a critical component to regional recovery strategies, and benefit from investments in new capital structures, collaborative technical assistance networks, supply chain initiatives, and community infrastructure upgrades. Yet, if cities want to make significant platform investments in small business support, they must ensure they are inclusive, durable, and evidence-based. Importantly, ARP’s two-tranche funding sequence gives cities until spring 2022 to plan the deployment of the second tranche. You can also receive help from the COVID Relief Coalition, a group of Massachusetts non-profits, law firms, and governmental agencies of which the Attorney General’s Office is a part. The Coalition helps small businesses and non-profit entities in the greater Boston area with one-on-one advice about access to emergency loans and other sources of relief.

State Initiatives for Small Business Recovery During the COVID-19 Pandemic Economic Crisis

Since that time, the ERTC has been modified and expanded by Congress twice so many more companies can use it. PPP loans are issued by private lenders, credit unions and nonbank lenders but are backed by the Small Business Administration . The essential purpose of the PPP is to get small businesses to keep workers on payroll and to rehire laid-off workers.

Executive compensation and severance benefits will be limited for the term of the loan plus one year. Businesses are restricted from paying dividends and making other capital distributions with respect to their common stock, and businesses and their affiliates are prohibited from buying back public stock , until one year after the loan is repaid.

CARES Act Provides Assistance For Small Businesses And Consumer Debtors in Bankruptcy

You can use the just released curbside pickup option through Square Online Store, and they plan to release a local delivery feature this week. Curbside pickup and delivery fees are waived for the next three months. KivaThe popular small business, crowdsourcing investment company is offering 0% loans up to $15,000 with no payments for six months. Philadelphia COVID-19 Small Business Relief FundThe COVID-19 Small Business Relief Fund offers grants or zero-interest loans to the city’s businesses impacted by the virus. Microenterprise grants of $5,000, small business grants of up to $25,000 and small business loans with 0% interest of up to $100,000 are available. Businesses with between one and five employees can apply for up to $10,000 inemergency fundingto help cover rent and employee salaries. You must show that you have lost 25% or more of your revenue, have less than $2.5 million in gross receipts and prove that you’re properly licensed to operate in San Francisco.

The president has invoked his powers under the Defense Production Act of 1950 (“DPA”), announcing that FEMA would need to implement DPA authorities in order to secure necessary medical equipment. On Friday, March 27, 2020, the president enforced the DPA in this context, ordering General Motors to produce ventilators to combat the coronavirus, after days of hesitating to use the powers in the law. The DPA provides the president with a broad set of authorities to ensure that domestic industry can meet national defense and security requirements. Among other powers, the DPA provides the president with the ability to direct private industry to prioritize the performance of government contracts to ensure the timely availability of critical materials and equipment.

The CARES Act amends Section 7 of the SBA Act to create the new Paycheck Protection Program. In general, these loan programs are intended to help small businesses pay employee salaries, and stay current with mortgage payments, rent, utilities, and interest on debt obligations. For air carriers, the amount of the payroll support will be a function of the salaries and benefits reported by the air carrier to the Department of Transportation pursuant to 14 C.F.R. part 241 for the period from April 1, 2019, through September 30, 2019.

Agency responses

As of March 23, 2021, the SBA has not provided any additional details about this new program. Even if we accept the need to keep most firms afloat, it is not obvious that the PPP, with its focus on employee retention, provides the best approach.

On May 18th, Governor Newsom announced new guidelines for California’s reopening. Individual counties can apply to begin a phased reopening as they meet health and safety measures. And an additional $600 of assistance each week from March 29th until July 25th.

• It’s best to get testing through your provider, but if you need to use public testing, you can save time in line by visiting coronavirus.dc.gov/register to create a profile from your smartphone, tablet, or computer.
• MEDC partnered with Michigan Women Forward to create a $1.5 million fund to help entrepreneurs and small businesses negatively impacted by COVID-19 recover from the outbreak, as well as assist them in meeting increased demands in support of COVID-19 response efforts.
• After 10 days of family and medical leave, employers must begin providing paid leave that is at least two-thirds of the employee’s pay rate.
• The CARES Act allows businesses to defer payment of employer payroll taxes, including the 6.2 percent Social Security tax on employee wages, for up to two years.
• Just over half of all U.S. jobs are at businesses with more than 500 employees.

I have my own self-employed business – just 1 year old and have lost my contracts. We have also already applied for the PPP Loan and completed those applications on 4/4 and 4/7 respectively. We have not seen any funds incoming, nor have we been contacted by the SBA since.

Grant Programs

MEDC has partnered with Reopen Main Street to compile a variety of recovery resources into one, easy-to-use website. The new website includes reopening strategies, ideas, hints and tips for businesses, business districts and organizations.

However, these requirements may be waived by the Secretary of the Treasury if necessary to protect government interests, subject to testimony before Congress regarding the rationale for the waiver. The CARES Act also suggests that the Federal Reserve may establish a Main Street Business Lending Program or facility that supports lending to small and midsized businesses on such terms and conditions that are consistent with its authority under the Federal Reserve Act. The COVID-19 pandemic has had severe economic effects across the entire economy. Just over half of all U.S. jobs are at businesses with more than 500 employees.

Lending facilities

In this bulletin, we summarize some of the key provisions for businesses. According to guidance from the SBA and the Department of Treasury, small businesses and sole proprietorships may begin processing loan applications as soon as April 3, 2020. Payroll costs also exclude qualified paid family and sick leave pursuant to the Families First Coronavirus Response Act. The Act provides companies with a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose operations were fully or partially suspended, due to a COVID-19-related shut-down order, or gross receipts declined by more than 50 percent when compared to the same quarter in the prior year. For companies with greater than 100 full-time employees, qualified wages are wages paid to employees when they are not providing services due to the COVID-19-related circumstances described above. For companies with 100 or fewer full-time employees, all employee wages qualify for the credit.

A company must certify that the majority of its employees are based in the United States. Forgiveness is reduced in proportion to any reduction in FTEs or if compensation decreases by more than 25% as compared to a look-back period. Please credit the authors, source, and the Federal Reserve Bank of Richmond and include the italicized statement below. We work with teachers, students and the public to enhance understanding of economics, personal finance and the Federal Reserve.

The California State Association of Counties announced that counties may cancel penalties and other charges for homeowners, businesses, and other property owners that are unable to pay their property taxes due to circumstances caused by COVID-19. The San Bernardino County Auditor-Controller/Treasurer/Tax Collector Ensen Mason announced he will grant a waiver of penalties for payments made after April 10, 2020 but no later than June 30, 2020 on qualifying residences and The Cares Act Provides Assistance To Small Businesses a great majority of small businesses. The Paycheck Protection Program authorized up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. Paycheck Protection Program Loans have been administered directly through lenders. Please contact your lender for further information on their participation in the program. If you are seeking out a lender, a list of the 100 most active 7 lenders is available on the SBA website.

• Previously, the AMT tax credits were spread out over several years ending in 2021.
• This is intended as a guide to laws, regulations and executive actions in the United States, at both the federal and the state level, and in various countries with respect to the new coronavirus and its spread.
• The credit is provided for the first $10,000 in compensation (i.e., up to a $5,000 tax credit), including health benefits, paid to an eligible employee, and is provided for wages paid or incurred after March 12, 2020, through the end of the year.
• Up to $3 billion for airline “contractors.” Contractors are defined as individuals and businesses under contract with a passenger air carrier performing either catering functions or ground support functions.
• In this time of crisis, small business owners and entrepreneurs are facing serious challenges to keep the lights on, pay their employees, and support themselves.

Michigan’s small businesses have shown resiliency throughout the COVID-19 pandemic and are the backbone of our communities. Governor Whitmer is committed to getting small businesses the support they https://quickbooks-payroll.org/ need as we build our economy back better. The bill provides $10 million for the Minority Business Development Agency grants to train and counsel minority-owned firms impacted by Coronavirus.

The program provides up to $2 million in loan funds to Northern Initiatives through MEDC’s Capital Access program to assist businesses impacted by the COVID-19 virus. The U.S. Small Business Administration announced that the deadline to apply for the Economic Injury Disaster Loan program for the COVID-19 Pandemic disaster declaration is extended to Dec. 31, 2021.

Eligible borrowers may apply to increase the amounts of their existing loans or lines of credit up to $300 million. On June 8, 2020, the Paycheck Protection Program Flexibility Act of was enacted to give more time and flexibility to small businesses to retain their employees and ensure their continued operations as the country slowly reopens amidst the COVID-19 crisis.

The CARES Act establishes a new $349 billion Paycheck Protection Program . The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed. Small businesses and sole proprietorships may begin to apply for this loan on April 3. Loan payments not qualifying for forgiveness will be deferred for six months. The SBA will begin registrations for the Restaurant Revitalization Fund on Friday, April 30, 2021, at 9 a.m. The online application will remain open to any eligible establishment until all funds are exhausted.

There are of course better ways to compensate small business owners than sustaining non-viable businesses, and every public insurance program runs the risk of moral hazard. In addition to state programs, California residents and business owners are eligible for several federal COVID-19 assistance programs through the CARES Act and second round of relief funding.

Payroll tax credits for providing leave benefits to workers affected by the coronavirus. The CARES Act provided $10 billion to fund cash grants for small businesses and nonprofits.