Federal Small Business Stimulus Aid Programs
Families First Coronavirus Response Act (FFCRA)
This act provides tax credits to covered employers whose employees are placed on sick or medical leave for reasons related to COVID-19. Coverage begins on April 1, 2020 and requires paid leave under certain conditions for employers with fewer than 500 employees. This legislation is intended to ensure workers do not have to choose between paychecks and public health, while also mitigating the economic impact on businesses. Those with fewer than 50 employees may be exempt from providing this leave under certain circumstances. Read this article for a summary of the FFCRA and its exemptions as it pertains to employers. Mandated fact sheets are also available from the U.S. Department of Labor.
Paid Leave Required by Small and Mid-Sized Businesses
Click here to read more about paid leave mandates.
COVID-19 Relief for Small Businesses
Click here to learn more about assistance available for small businesses. If you are looking for PPP Loan forgiveness paperwork, please contact your lender.
Small Business Stimulus Aid Programs
The U.S. Chamber of Commerce offers additional information about the Coronavirus Preparedness and Response Supplemental Appropriations Act, which enables the U.S. Small Business Administration to offer $7 billion in disaster assistance loans to small businesses impacted by COVID-19.
Paycheck Protection Program
The U.S. Small Business Administration (SBA) will provide $349 billion in loans through the Paycheck Protection Program to small businesses and non-profits. Portions of these loans will be forgiven to the extent that recipients maintain their existing workforce or rehire. Loans can be up to $10 million and interest rates are maxed at 4% for portions of the loan that do not qualify for loan forgiveness. Learn more about the program here, and check out the payroll calculator on our Resources page.
Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan, as they are continually being updated to reflect the most current state and federal regulations.
For general questions you can contact the SBA PPP dedicated line at 1-833-572-0502. If you are having difficulty accessing the PPP with your lender, you can find a list of all eligible lenders based on your zip code here. Additionally, certain online lenders like PayPal are accepting PPP applications. Intuit also provides a great calculator for estimating PPP eligibility. Please make sure you retain all documentation related to your PPP application and contact our firm if we can help support you during this time. Please contact your lender for the most recent PPP forgiveness application, as the regulations surrounding this program are rapidly changing in response to the pandemic.
Economic Injury Disaster Loan (EIDL) Update
Update direct from the SBA, 4/13/2020
On March 29, 2020, following the passage of the CARES Act, the SBA provided small business owners and non-profits impacted by COVID-19 with the opportunity to obtain up to a $10,000 Advance on their Economic Injury Disaster Loan (EIDL). The Advance is available as part of the full EIDL application and will be transferred into the account you provide shortly after your application is submitted. To ensure that the greatest number of applicants can receive assistance during this challenging time, the amount of your Advance will be determined by the number of your pre-disaster (i.e., as of January 31, 2020) employees. The Advance will provide $1,000 per employee up to a maximum of $10,000.
You may be eligible for another loan program, the Paycheck Protection Program, which is available through participating lenders. Below is a comparison of the two loan programs:
Paycheck Protection Program
PURPOSE
Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for certain operating expenses (amount of any EIDL advance is not forgivable)
TERMS
Up to $10 million
1% interest rate
FORGIVABLE
YES
MATURITY
2 years
FIRST PAYMENT DUE
Deferred 6 months
Full EIDL Loan
PURPOSE
To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL advance is forgiven)
TERMS
Up to $2 million
3.75% for businesses
2.75% for non-profits
FORGIVABLE
NO – EIDL Loan
YES – EIDL Advance
MATURITY
30 years
FIRST PAYMENT DUE
Deferred 1 year
To locate a Paycheck Protection Program Lender, please visit: www.SBA.gov/PaycheckProtection.
Information on available resources may be found at www.sba.gov/coronavirus. For more information on these services, please go to www.sba.gov/local-assistance to locate the email address and phone number for the nearest SBA district office and/or SBA's resource partners.
Flexible Spending & HSA Accounts
Recent Changes Due to COVID-19
The CARES Act recently implemented by Congress has further defined qualifying events (pertaining to COVID-19) to provide greater flexibility for mid-year election changes to Flexible spending accounts.
With schools and childcare facilities temporary closed, you may be eligible to change your Dependent care election. Some qualifying events include:
- Loss of childcare due to daycare facility closed
- No longer need childcare due to reduction in hours, work from home orders, or loss of employment
- Need for childcare services due to schools being closed
For Medical Flexible Spending Accounts (FSA), the IRS has recognized the following as qualified events where you are now eligible to make an election change:
- FMLA leave
- Reduction in work hours that causes loss in coverage
- Change in employment status
- Change in cost from provider
- Change in provider due to change in cost
If you are interested in making a change to your elections under your Flexible Spending Account, we strongly recommend contacting your Human Resources department for further instruction.
The CARES Act also now allows reimbursement for expenses incurred for non-prescribed over-the-counter (OTC) medicine and medical supplies that are eligible for reimbursement under Health Savings Accounts (HSA) and Flexible Spending Accounts (FSA). This change repeals the Affordable Care Act's prohibition on reimbursement of such expenses under those arrangements. In addition, menstrual products are included as covered expenses that can be reimbursed under FSA and HSA Medical accounts.
These provisions are retroactive to January 1, 2020 and at this time there is no set date for an expiration on these provisions.
