CARES Act Information for Businesses and Individuals

Facebook ^ | 3/30/2020 | Gil Osterloh

[Sharkfish]

My first of two posts on the breakdown of the Coronavirus Aid, Relief, and Economic Security Act or CARES Act.

This one pertains to business owners and employees and those seeking grants, funding, and loans as a result of COVID-19.

Contact your lender today if you're a business owner and take advantage of these methods to continue paying your employees and operating expenses. This will open up a wide array of new lenders not already under the SBA program.

THERE IS LOAN FORGIVENESS FOR:

1. Payroll costs 2. Mortgage interest 3. Rent 4. Utilities

There is also a tax abatement under loan forgiveness

Here is a breakdown of the highlights for business owners and employees:

A. Paycheck Protection Program for businesses is the funding for loans to businesses to keep paying their staff:

1. Participation in a loan on a deferred basis

2. “Covered period” is Feb 15, 2020 to June 30, 2020

3. “Eligible self-employed individual” means the term found section 7002(b) of the Families First Coronavirus Response Act (Public Law 116-127)

4. “Payroll costs” means the sum of payments of: a. Salary, wage, commission, or similar compensation

b. Cash tip or equivalent

c. Vacation, parental, family, medical, or sick leave

d. Allowance for dismissal or separation

e. Provisions of group health care benefits, including insurance premiums

f. Retirement benefits

g. State or local tax assessed on the compensation of employees

h. To a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self employment or similar compensation NOT MORE THAN $100,000 in one year

5. Shall NOT include:

a. Compensation of an individual employee in excess of an annual salary of $100,000 as pro-rated for the covered period

b. Taxes imposed or withheld under chapters 21, 22, or 24 of the IRS Code of 1986

c. Any compensation of an employee whose principal place of residence is outside of the US

d. Qualified sick leave wages for which a credit is allowed under section 7001 of the Families First Coronavirus Response Act

e. Qualified family leave wages for which a credits under section 70003 of the Families First Coronavirus Response Act

B. Registration of Loans- SBA shall register a loan within 15 days of creations using the IRS TIN assigned to the borrower

C. Increased eligibility for certain small businesses and organizations:

1. Other business concerns, non profit organizations, veterans organizations, and Tribal business concerns are eligible for a covered loan if they have 500 employees or less or meet the size standards established by the SBA the industry in which they operate.

2. Inclusion of sole proprietors, independent contractors, and eligible self-employed individuals:

a. Shall submit IRS payroll tax filings, 1099’s, and income and expenses as documentation to qualify

3. If you are a restaurant, hotel, RV park, casino hotel, motel, bar, eating place (NAICS Code 72) with not more than 500 employees per physical location you automatically qualify

D. Allowable uses of covered loans:

1. Payroll costs 2. Health care benefits 3. Employee salaries commissions 4. Interests on any mortgage obligations 5. Rent 6. Utilities 7. Interest

E. ITEMS OF NOTE FOR ALL LOANS:

Existing SBA loans can be refinanced and bundled under this Act

SBA will delegate authority to loan to lenders

Personal guarantees are waived

Lenders will have no recourse against any individual shareholder, member, or partner of an covered loan for non-payment unless the loan proceeds were used for something not covered

Borrowers shall certify they meet the loan conditions

The SBA requirement to first be denied credit elsewhere in order to qualify is waived

No collateral shall be required

Interest rates for loan forgiveness may not exceed 4%

All eligible participants shall be an “impacted borrower” which means lenders will provide payment deferment of principal and interest for 6-12 months.

Covered loans can be sold to the secondary market.

Covered loans will receive a risk weight of zero percent

Lenders must disperse funds within 5 days of loan approval

Lenders fees covered by SBA

Small businesses in under-served and rural markets and small businesses owned by minorities, and small businesses in operation for less than 2 years will take priority

No pre-payment penalties on loans

Loans of up to $1 million

F. EDUCATION, TRAINING, AND ADVISING GRANTS:

1. Grants to resource partners to provide education, training, and advising small business concerns and their employees on:

a. Accessing and applying for resources by provided by the SBA and other Federal sources relating to access to capital and business resiliency

b. Hazards and prevention of the transmission and communication of COVID-19 and other communicable diseases

c. Potential effects of COVID-19 on the supply chains, distribution, and sale of products of covered small business concerns and the mitigation of those effects

d. Management and practice of telework to reduce possible transmission of COVID-19

e. Management and practice of remote customer service by electronic or other means

f. Risks and mitigation of cyber threats in remote customer service or telework practices

g. Mitigation of the effects of reduced travel or outside activities on covered small businesses concerns during COVID-19 or similar occurrences

h. Other relevant business practices necessary to mitigate the economic effects of COVID-19 or similar occurrences

2. Grant determinations:

a. 80% of grants will go to small business development centers to be determined under section 21(a)(3)(A) of the Small Business Act (15 USC 648(a)(3)(A)

b. 20% of grants will go to Women’s Business Centers

c. No matching funds required

G. EMERGENCY EIDL GRANTS

1. Not more than 500 employees or

2. Any individual who operates under a sole proprietorship with or without employees or as an independent contractor

3. Are eligible for a loan

4. No personal guarantees on advances and loans of $200K or less

5. 1 year in business requirement waived

6. Proof of denial of credit elsewhere waived

H. EMERGENCY EIDL GRANT SMALL DOLLAR LOAN

1. Will approve based on solely on credit score

2. No requirement to submit a tax return

3. Funded within 3 days

4. Self-certification verification

5. Can be for no more than $10K

6. Can only be used for paid sick leave, payroll, meeting increased costs, rent, mortgage, and repaying obligations that cannot be met due to revenue losses

I. ASSISTANCE FOR AMERICAN WORKERS, FAMILIES, AND BUSINESSES

1. Self certification

2. Unemployment assistance up to 39 weeks

3. Self-employed are eligible as are non-profit entities and governmental entities

4. Who have exhausted all other sources of benefits

5. Payment by the Federal government directly to states to fund unemployment benefits

J. REBATES:

$1,200 for each tax paying citizen that makes less than $75K per year or married filing jointly making less than $150K per year plus $500 for each child

K. OTHER PROVISIONS AND BENEFITS:

No penalty for early withdrawal on retirement plan account up to $100K

Suspension of cash limitations on deductible contributions to charities for individuals and up to 25% of income for corporations

Penalties waived for late payment of payroll taxes

Loss recording for up to 5 years on previous filings for existing businesses

Provides for immediate notification by life-saving apparatus companies of closure, stoppage of production, or issues with supply chain and distribution

Provides for grants to rural healthcare providers

Volunteer health care professionals are relieved of any personal liability

No criminal or administrative penalties for someone seeking help for COVID-19 healthcare related issue if they are taking illegal drugs

Provides for financial assistance regarding the delivery and/or provision of meals for the elderly and other home-based individuals

Re-enacts the Healthy Start Program from 2001

Funding for the blood supply

Establishes grants for geriatric workforce programs

Funding for additional nurses and nursing programs. It also has wording that expands Federal payment of nursing school loans.

Higher education institutions do not have to match Federal grants and other funding benefits and waivers

Temporary student loan relief of interest and collections and payment suspension

Amends paid leave and sick leave for employees (consult with your HR professional and/or tax attorney or accountant on this one)

Amended provisions for telehealth and what constitutes medical write-offs on taxes

Waives requirements for face-to-face visits for dialysis patients and their doctors

Medicare payments for those hospitalized with COVID-19 plus other expanded Medicare benefits for uninsured individuals and prescription refills

Provides for funding of COVID-19 vaccines to the public

Funding to expand community health programs

Funding to expand sexual risk avoidance education programs

Regulation of certain non-prescription OTC drugs new to the market

Amendment to evaluation of new sunscreen products

Amendment to regulation on certain OTC cough and cold drugs

$500 billion in direct aid to major industries such as airlines, cargo carriers, and cruise lines (or other major industry business that did not receive financial assistance in any other form) Caps the administrative costs and fees for the these loans at $100 billion

Caps reimbursed salaries of CEO’s at what they made in 2019

Suspends certain aviation excise taxes

Exempts Board of Governors of the Federal Reserve System from provisions of the Sunshine Act that require open meetings

Authorizes certain exemptions to lending requirements of banks and other lenders

Provides for financial relief to community banks and credit union

Provides for funding for lending institutions that suffer credit losses

Appoints a Special Inspector General of Pandemic Recovery and a Congressional Oversight Commission

Prohibits lenders and credit reporting agencies from reporting your account as delinquent when a payment has been deferred for a period of up to 120 days

Forbearance of federally backed home loan and multi-property loan payments of up to 180 days with no additional penalties, fees, or interest (other than the normal rate of interest in note)

Eviction moratorium on tenants of multi-property landlords with federally backed mortgages and multi-property landlords who are part of a federal housing program

[Sharkfish]

Gil Osterloh is the proprietor of Beverage Law Professionals. He is an industry consultant, lobbyist (city/county) and Qualified Representative that has represented food service, alcoholic beverage, and lodging licensees before the Florida DABT for the last 25 years. He has over 40 years of experience working in these industries. He is a great resource of information for restaurants and other small businesses as well as beverage industry workers during the COVID-19 pandemic, especially for those in Florida and Louisiana.

[TangledUpInBlue]

I’m about to do a Webinar on this. If anyone has any questions, ping me and I’ll see if I can answer.

[Lizavetta]

Very interested in the unemployment benefits for the self-employed.

[small farm girl]

Tangles, I filled out the streamlined app this morning. Did you notice if you are a farm, you are not qualified to apply? I called SBA about it too, and they informed me that was correct, if you "grow food" you are not eligible. I applied anyway as a retailer, which I am. Oddly, nurseries qualify, which I also am. BUT, this is very different than what was being touted the day the bill passed; there was lots of talk about protecting our farmers. How the heck do farms not qualify for help - and yet we are "essential businesses". Thoughts?
And yes, I called our useless POS rep McGovern and inquired (he's on the house Ag Committee too!)

[magna carta]

If a landlord who has a property that he was forced by the state to NOT EVICT (via courts shutting down eviction cases) can get something for lost/unpaid rent & costs of utilities he was forced to pay while waiting on eviction case to go through the system.

[Cedar]

Things are just way too complicated nowadays. Founding Fathers would be sad.

[nascarnation]

Things are just way too complicated nowadays

Tax law is basically a "jobs program" for attorneys (1.4 million in the US) and accountants (1.3 million in the US).

[Cedar]

We’ve grown up with all the complicated legal mess in life and government, but the Founding Fathers would probably think society has truly lost its mind.

[Silentgypsy]

Precisely how does one apply for the “J. Rebates” for tax-paying citizens?

[TangledUpInBlue]

I’m sorry to say that the course I took was incredibly high level and rather preliminary. Having just been signed into law a few days ago, I guess that’s not strange.

Most of the “big ticket” items are known already in the news such as, tax deferments for filing and paying, payroll tax holidays and deferments, etc.. Below is a link to the SBA application process for small businesses (under 500 people)

I suggest you deep dive on that if you are eligible. As more classes come online I will be obliged to attned and try to circle back here with any information.

Good luck guys!

https://covid19relief.sba.gov/#/

[Sharkfish]

Here is Gil's second post diving into the rest of the CARES Act. Billions and billions of wasteful spending and unrelated causes.

[terart]

how do I apply for the EIDL grant?

[ronnie raygun]

Below is direct link to SBA loan application takes minutes to complete quick and painless pass it on

https://covid19relief.sba.gov/#/

[Silentgypsy]

Thank you.

[TangledUpInBlue]

And here is another useful link from a Nevada Legislator although that won’t matter overall.

https://www.rosen.senate.gov/covid-19-small-business-assistance