April 17, 2020

Dear friends,
Both federal COVID-19 loan programs (the Economic Injury Disaster Loan and the Paycheck Protection Program) have run out of money this week. They are unavailable until congress approves extra funding. In this week’s update, we will continue to provide insight into those programs for co-ops who have applied. We’ll also share steps all co-ops can take regardless of loan status.
If you have applied for a PPP loan, it is important to plan for good record-keeping to ensure forgiveness. Keep records of payroll and related expenses, mortgage interest or rent payments, and utilities. The SBDC suggests opening a separate bank account for PPP funds, and only pay qualified expenses from that account.
Any co-ops thinking about applying for an   Emergency Cooperative Enterprise Relief Loan from CFNE as a bridge loan to EIDL or PPP should be aware that SBA funds cannot be used to repay CFNE emergency loans. If you have questions about how to combine different loan products, or which ones might be the best fit for your co-op, contact your loan officer.
One program that is still active but has not received much attention is the Employee Retention Tax Credit. This is a refundable quarterly payroll tax credit for businesses and non-profits that keep their employees on the payroll during the COVID-19 crisis. It cannot be combined with the Paycheck Protection Program. While it does not provide cash as quickly as PPP or EIDL, the tax credit is equal to 50% of wages and compensation, for the first $10,000 of wages per employee . Eligible businesses must have either:
  • been fully or partially closed as a result of a government order, or
  • experienced a 50 percent reduction in quarterly receipts as a result of the crisis.

We’re keeping our Co-op Resiliency Resources page updated with new information, webinars, and financial relief programs. Please let us know if there are resources that would be helpful for your co-op.
In cooperation,
Micha Josephy
Executive Director
Cooperative Fund of New England www.coopfund.coop