The COVID-19 pandemic has prompted significant policy changes at all levels. We're here to catch you up and support business in Lincoln Square and Ravenswood. Please see our COVID-19 Business Resources website for a comprehensive list of resources to aid your business during this time.
Coronavirus Aid, Relief, and Economic Security (CARES) Act
After weeks of negotiation, the CARES Act has passed and been signed into law. The CARES Act is a broad package of stimulus funding intended to shore up many different areas of our society in response to the disruption created by COVID-19. We're going to focus on the implications for small business, and give you some resources to stay updated as funding and programs get rolling.
The CARES Act provides for forgivable 7(a) loans from local SBA-approved financial institutions, emergency grants for SBA Economic Injury Disaster Loan recipients, and payroll tax credits/deferrals aimed at encouraging employee retention. These benefits are extended to small businesses, small hospitality franchises, self-employed/sole proprietorships, and 501(c)(3)s.
Application for forgivable loans and grants will be through local SBA-approved financial institutions. This link is supposed to allow you to search locally, but seems to be malfunctioning at this time.
Implications for Employees
There are also some provisions for employees that are important to know. Since these aren't covered in the guide, we'll touch on them briefly below:
Expanded Unemployment Insurance Funding
The CARES Act allocates an additional $600 per week on top of the usual state benefit for 4 months. The overall length of unemployment insurance has been increased from 26 weeks to 39 weeks in Illinois. As the unemployment insurance payment in Illinois equals roughly 50% of an employees previous paycheck, some people will end up being payed more through unemployment insurance than through their previous employment.
A very rough estimate indicates that the break-even point is at $4,800 per month, or $57,600 a year for salaried employees.
You may want to look into the implications this may have on your employment levels, which may be taken into account when applying for loan forgiveness or payroll tax credits.
The following agencies have published questionnaires to solicit feedback from small business owners. Taking the time to respond will let them know where to focus their efforts when creating new policies for economic relief.