On Friday, President Trump signed into law the CARES Act (Coronavirus Aid, Relief, Economic Security) Bill. writes Martin Liptrot, Founder 98RepublicPR, a North West Florida-based business development, public affairs and marketing agency.
It is a $2TRILLION investment in businesses like yours. The program will be administered by Small Business Administration (nearest offices are Jacksonville and Mobile) and practically operated through main street banks. There are a number of programs to support small businesses but probably the most relevant in our economy is the $350billion program designed to help small firms with staff costs and fixed expenses - The SBA Paycheck Protection Loan Program (PPP).
Notes and guidance are still being crafted but we identify 4 key eligibility elements:
Your business or entity was in operation on February 15, 2020;
You are a small business, a 501(c)(3) nonprofit organization, a 501(c)(19) veterans organization, or tribal business concern that has fewer than 500 employees, or the applicable size standard in number of employees for the North American Industry Classification System (NAICS) industry as provided by SBA, if higher.
You are a sole proprietorship, an independent contractor, or self-employed.
You are a franchise business that employs not more than 500 employees per physical location and your business has an NAICS code beginning with 72, for which the affiliation rules are waived. Affiliation rules are also waived for any business operating as a franchise that is assigned a franchise identifier code by the SBA, and any company that receives funding through a Small Business Investment Company.
If you are eligble:
* Each business can apply for up to $10million to cover payroll and other expenses
* Your maximum loan size is 250% of average monthly payroll costs from February 15, 2019,
to June 30, 2019.
* For seasonal employers, you can opt to choose March 1, 2019, as the time period start date.
* If you were not in business this time last year, your maximum loan is equal to 250% of
your average monthly payroll costs between January 1, 2020, and February 29, 2020.
For the PPP Scheme, Payroll costs for the purposes of determining your loan size include:
Compensation (salary, wage, commission, or similar compensation, payment of cash tip)
Payment for vacation, parental, family, medical, or sick leave
Allowance for dismissal or separation
Payment required for group health care benefits, including insurance premiums
Payment of any retirement benefit
Payment of State or local tax assessed on the compensation of employees
You may use the funds for:
Payroll costs (all costs included above)
Costs related to group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums
Employee salaries, commissions, or similar compensations (except as excluded above)
Payments of interest on any mortgage (but not payment or prepayment of principal)
Rent
Utilities
Interest on any other debt obligations that were incurred before the February 15, 2020.
Loan Repayment and Forgiveness:
You can apply to your lender to forgive your loan for the amount of payroll costs plus payments of mortgage interest, rent, and utilities incurred during the 8-week period after the loan is disbursed. The amount that can be forgiven is proportionate to maintaining employees and wages. You must apply through your lender for forgiveness and provide:
Documentation verifying the number of employees on payroll, their pay rate, IRS payroll and state income tax filings, and unemployment insurance filings;
Documentation verifying payments of rent, mortgage interest, utilities, and other debt; and
Certification from your business that the documentation provided is true and that amount of the loan that is being forgiven was used in line with the program’s requirements.
Any loan amounts not forgiven are carried forward as an ongoing loan with max terms of 10 years, at a maximum interest rate of 4 percent. Principal and interest will continue to be deferred, for a total of 6 months to a year after disbursement of the loan.
There are numerous other programs in CARES but this seemed the most appropriate for many small businesses in Walton County. For more information about how 98Republic can help you apply and secure your share of the Government's CARES Act support contact Martin@98RepublicPR.com or text 850 353 1101.