Dear Members,
As you have probably heard, the federal government passed a massive stimulus bill on Friday, March 27
th
to help businesses and states respond to the COVID-19 crisis wreaking havoc on our economy. Below is a great summary from the
International Economic Development Council
about of some of the components of the bill that are aiming to help businesses, employees and individual families. There will certainly be more information coming this week, but here are the highlights:
Small Business Administration
The Small Business Administration is receiving an enormous amount of funding and significant program adjustments to help small businesses weather and survive the crisis. A sample of the numbers includes:
- $349 billion for loan guarantees,
- $675 million for Small Business Administration salaries and expenses
- $240 million for small business development centers and women’s business centers for technical assistance for businesses
- $10 billion for emergency EIDL grants,
- $17 billion for loan subsidies,
- $100 billion for secondary market guarantee sales
Programmatic changes appear to be primarily channeled through the 7(a) loan program. Key provisions include:
Paycheck Protection Program
- Creation of the Paycheck Protection Program (PPP)
- Helps small businesses, 501(c)(3)’s, 501(c)(19)’s, and 31(b)(2)(c)
- Limited to under 500 employees
- Includes independent contractors, sole proprietors and the self-employed
- Entities must have been operational by 2/15/20; had payroll, paid taxes
- Covered loan period is 2/25/20 through 6/30/20
- Maximum loan amount via 7(a) set to $10 million through 12/31/20
- 100% loan guarantee through 12/31/20
- Eligible expenses include payroll, insurance, rent, mortgage and utilities
- Borrower cannot apply/carry both PPP and Economic Injury Disaster Loan (EIDL) for COVID-19, but can carry previous, non-COVID-19 EIDL and participate in PPP
- Borrow must good-faith certify that funds are needed for COVID-19 related purposes, the funds will be used to retain workers, and that their request is not duplicative with other SBA funds for the same purpose
- Waives borrower and lender fees
- Waives credit elsewhere requirements
- Waives collateral and personal guarantees
- Sets maximum interest rate of 4%
- No prepayment fees
- Defers payments on PPP loan for 6-12 months
- Delegates authority to all existing 7(a) lenders to expedite approvals/distributions
- Authorizes bank and non-bank lenders to participate in PPP program
- New lenders in program can only participate in PPP and not other 7(a) loans
- Amount spent by borrower in the first 8 weeks from loan origination may be forgiven; amount reduced proportionate to reductions in workforce as compared to previous year; if rehires made during 8 week period, no penalty in reflection of possible layoffs early in the 8 week period
- Allows inclusion of additional money paid to tipped workers
- Anything not forgiven or repaid by 12/31/20 will convert to a max 10 year loan at a max 4% interest rate; loan will remain 100% guaranteed
- Emergency Injury Disaster Loan (EIDL)
- Eligibility expanded to include tribal businesses, cooperatives, ESOP’s, individual contractors, sole proprietors, and private non-profits with less than 500 employees
- Waives credit elsewhere requirement for advances and loans below $200,000
- Waives personal guarantee for advances and loans below $200,000
- Waives 1-year-in-business requirement for advances and loans below $200,000
- SBA has greater flexibility in determining borrower eligibility
- Entities eligible to apply for EIDL may request an advance in the form of an emergency grant of up to $10,000
- SBA must distribute EIDL emergency grant within 3 days
- Applicants are not required to repay emergency grant, even if they are ultimately denied EIDL
- Other provisions
- Additional funding provided to Small Business Development Centers (SBDCs) and Women’s Business Centers (WBCs)
- Match requirements for WBCs are waived for 3 months
- State Trade Expansion Program funds from FY ‘18 and FY ‘19 will be made available through FY ‘21
- Requires SBA to subsidize 6 months of payments on existing 7(a), 504, or microloans beginning with the next payment.
Unemployment Insurance
The stimulus bill offers considerable resources related to unemployment insurance. At present, this section includes final sticking points that are delaying passage of the bill.
- Creates a temporary Pandemic Unemployment Assistance (PUA) program for those not traditionally covered by unemployment insurance (UI), including the self-employed, independent contractors, or those with limited work history
- Provides an additional $600 per week in recipients of UI and PUA for up to 4 months
- Provides an additional 13 weeks of UI after state UI expires
- Federal government will cover 100% of the cost of the first week of UI if states waive the 1 week waiting period to begin benefits
- Federal government will reimburse states for 50% of the costs incurred through 12/31/20 of unemployment benefits for state agencies and non-profits
- Federal government will pay 100% for ‘short-time’ programs in states with exiting programs in law and 50% of costs for states that begin ‘short-time’ programs during the covered period
For Businesses
A series of tax credits to ease the burden of keeping staff on payroll.
- Employee retention benefit: 50% refundable payroll tax credit during COVID-19 crisis for businesses that either fully or partially shut down OR have a 50% decrease in receipts versus the same quarter in the previous year and continue to pay employees.
- Based on qualified wages paid to employees during crisis, tied to number of employees (100+ full time employees = wages paid when they are not providing services due to COVID-19 and less than 100 full time employees = wages paid regardless of business closure status)
- Covers up to $10,000 paid per employee, including benefits, for the period 3/13/20-12/31/20
- Payroll tax deferred, payments to be spread over 2 years
- Net operating losses (NOLs) modification: NOLs arising in FY’s ‘18, ‘19, and ‘20 can be carried back 5 years
- AMT credits available as refundable credits through 2021 can be claimed as a refund now
- Allowable deductible interest expenses are increased from 30% to 50% for 2019 and 2020.
Economic Stabilization
The bill provides massive resources for economic stabilization primarily through the Department of the Treasury and the Federal Reserve.
- $500 billion for the Treasury Exchange Stabilization fund for loans, loan guarantees and other investments, including: $25 billion for air passenger carriers, $4 billion for air cargo; $17 billion for business important to national security; $454 billion for the Federal Reserve’s lending facilities to eligible businesses, states and municipalities
- Eligible entities must: have no alternative financing available, loans must be secured, loan terms must be less than 5 years, loan cannot be forgiven, no buy backs or dividend payments until the loan is repaid or 1 year from loan origination; must maintain 90% of 3/24/20 workforce until 9/30/20
- Any Federal Reserve lending must be broad-based, verification borrow is not insolvent, no other financing available, and loans cannot be forgiven.
Coronavirus Relief Fund
An injection of funding for states, tribes and local governments to combat the spread and aftermath of COVID-19
- Provides a $150 billion grant fund for states, to be distributed proportional to population size, with a minimum of $1.25 billion for states with the smallest populations.
- Funding is for state, local and tribal governments to use in response to COVID-19 crisis.
Rebates
Cash payments to U.S. residents
- All U.S. residents with an adjusted gross income of up to $75,000 for individuals and $150,000 for couples will receive a cash rebate of $1,200 (ind) or $2,400 (couples)
- Includes all taxpayers with work-eligible SSN, including those with low or no income
- Rebate amount decreases by $5 with for every $100 over the threshold, with individuals AGI over $99,000 completely phased out, $146,000 for head of household with at least 1 child phased out, and $198,000 for couples phased out.
- An additional $500 will be given for each child per household.
If you are interested in learning more about these programs, the IEDC is holding a webinar on Monday afternoon at 3:00PM. Details are below.
There is also discussion of a fourth stimulus package taking place, so additional opportunities may be available in the near future. We will update you on that as soon as we have more details.
As always, if we can be of assistance, please do not hesitate to reach out to me directly at 401-847-1608 or via e-mail at
Erin@NewportChamber.com
.
Sincerely,
Erin Donovan-Boyle
Executive Director
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Rent Sons:
Since many of our Neighbors are 60+, and we’re hoping to hire many more workers that have been laid off from their primary job, we felt the need to take an extra step in the right direction. This page talks about the Coronavirus precautions we are taking and special services we are going to provide to be there for our Communities.
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CWE: Learn about the SBA Disaster Loan Program for Coronavirus-Related Economic Injury
Monday, March 30th
9:30 a.m. - 10:30 a.m.
Are you a small business that has suffered substantial economic injury as a result of the coronavirus (COVID-19)? If so, please join this free webinar that will provide an overview of SBA’s Economic Injury Disaster Loan Program.
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International Economic Development Council: Demystifying Financial Programs & Resources During This Crisis
Monday, March 30th
3:00 p.m. - 4:30 p.m.
The COVID-19 pandemic is proving to be unprecedented in nearly every way possible, which makes understanding your options even more important. The second webinar in this series will convene top experts in understanding, leveraging and deploying financial programs and resources, including those from SBA, CDBG and EDA.
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CWE:
Legal Considerations for New Business Owners
Tuesday, March 31st
5:30 p.m. - 7:30 p.m.
This workshop provides a high-level overview of a range of legal issues that entrepreneurs should be aware of when starting a new company. Attend this workshop to learn how to avoid common mistakes and employ preventative measures that can protect and ensure the success of your new business.
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The Skimm: Recessions, Skimm'd
Thursday, April 2nd
10:00 a.m. - 10:30 a.m
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COVID-19 has the economy feeling down. Which is why you keep hearing the word recession. It’s scary. It’s confusing. ‘Recessions, Skimm’d’ is a live PowerPoint to walk you through what you can expect, how you can prepare, and what you should be doing with your money.
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CWE: Steps to Start a Non-Profit
Thursday, April 2nd
5:30 p.m. - 7:30 p.m.
Do you have tremendous passion for addressing a social issue or providing services to an undeserved group of people? Do you have a great idea on how to address social issues in a way that you have not seen before? Do you want to start a non-profit so you can put your good ideas to work?
The CWE will provide information on starting and running a 501(c)(3).
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Additional Business Resources:
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Have you heard us on the radio yet?
Every Thursday at 10 a.m. we join Bruce Newbury on 'The Talk of the Town'!
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Business of the Week,
Ross Nelson, Vice President of
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Interested in being a guest on our show?
to learn more!
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Tune in for live streaming and podcasts
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#SupportSmallBusinessChallenge
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Share with us a photograph ordering take out, pick up or delivery, buying gift cards, receiving an order anything to show your support to the business community of Greater Newport!
Use the hashtag above and/or tag the Chamber on Facebook or Instagram to be entered in for the chance to win a gift card to over 300+ local businesses.
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The Greater Newport Chamber offices at Innovate Newport will be closed at this time with full staff working remotely and available to our Members via email and phone. We encourage all businesses who are able to work remotely to do the same.
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Erin Donovan - Boyle
Executive Director
Kate Grotteberg
Events, Development & Program Director
Jo-anne Gorton
Executive Coordinator
Rebecca Chace
Marketing & Social Media Coordinator
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Lori Burke
Membership Associate
Ashley Medeiros
Regional Economic Development Consultant Connect Greater Newport
Todd LaChance
Community Manager, Innovate Newport
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Greater Newport Chamber of Commerce
| (401) 847-1600
| 513 Broadway, Suite 218, Newport, RI
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