March 30. 2020

Dear MABWA Member,

In an effort to keep our membership informed I would like to recap last Friday's passage of the federal stimulus bill, officially titled "Coronavirus Aid, Relief, and Economic Security Act (CARES Act)" allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn and provide important links for more information.

Paycheck Protection Program

The newly created Paycheck Protection Program provides 100% federally guaranteed loans to small businesses. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. 

The Secretary of the Treasury will soon release more details including the list of lenders offering loans under the program, but it is likely most local banks, credit unions and other financial institutions that already offer SBA loans will offer the Paycheck Protection Program and other local banks may be authorized to make these loans as well. This means no online SBA application and federal paperwork. You can sit down with a local banker and have the loan money very quickly. We expect lenders will be ready to make these loans within two weeks.

Loans will be equal to 250% of a business's monthly payroll. 

Sole proprietors, independent contractors, self-employed persons, and 501c3's now also qualify for this program.

Click here for a simple breakdown and FAQ of all of the Paycheck Protection Program's offerings

Here's another good resource from the US Chamber of Commerce.

If you do not qualify or do not wish to apply for the Paycheck Protection Program:

Economic Injury Disaster Loan

The SBA's Economic Injury Disaster Loan program was also bolstered by this stimulus bill.

SBA can now provide a $10,000 cash advance (available within three days of application) to serve as a grant if the money is used to maintain payroll, mortgage or lease payments, increased costs due to supply chain disruption, or the repayment of obligations that cannot be met due to revenue losses from the COVID-19 pandemic. To apply, click here.

Applications were also streamlined.

* If you were working on an EIDL application and did not submit it, you may need to start over now.

* If you received an EIDL loan related to COVID-19 between January 31, 2020 and the date at which the PPP becomes available, you would be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP for the same purposes. Remaining portions of the EIDL, for purposes other than those laid out in loan forgiveness terms for a PPP loan, would remain a loan. If you took advantage of an emergency EIDL grant award of up to $10,000, that amount would be subtracted from the amount forgiven under PPP.

Unemployment 

Federal Pandemic Unemployment Compensation 

The Federal Government will provide a temporary Federal Pandemic Unemployment Compensation (FPUC) through July 31, 2020 of $600 per week for any worker eligible for state or federal unemployment compensation benefits. This FPUC payment will be paid in addition to regular state or federal unemployment compensation. This program includes tipped workers. 

This new program also provides unemployment payments to individuals who are not traditionally eligible for unemployment insurance like self-employed individuals, 1099 gig-economy workers and independent contractors. Applying for this program will be the same as applying for unemployment.  

Beneficial Tax Changes to keep cash in hands of small businesses

The CARES Act will allow employers (and self-employed individuals) to defer paying their portion of the social security payroll tax (6.2 percent) otherwise due. As soon as the CARES Act is signed into law, the deferral period will start. It goes through December 31, 2020

Under the CARES Act, a corporation which incurs in 2020 (or has incurred during 2019 or 2018) an NOL is permitted to carryback such NOL to the prior five years to offset prior year income to claim a tax refund of previously paid federal income taxes.

Click here for more beneficial tax changes information.

Cash Direct to Every American

Click here for a calculator to figure how much you may receive.

Sincerely,
Stephen Taylor
President, Mid-America Bottled Water Association