In the last edition of the SECO Energy Insider newsletter, we outlined our assistance and flexibility for members during the COVID-19 situation that includes payment extensions, increased credit card transaction limits and more. This edition is aimed at providing information about the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress.
The CARES Act provides a wealth of resources including capital to cover the cost of retaining employees, utility payments, payroll assistance, grants, loans (including loan forgiveness) along with free counseling to provide you with resources during this difficult time.
The Small Business Debt Relief Program provides immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504 and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest and fees for six months. This relief will also be available to new borrowers who take out loans within six months of the president signing the bill into law.
Economic Injury Disaster Loans & Emergency Economic Injury Grants are also available. These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance. It may be used to keep employees on payroll, pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
If you are a government contractor, there are multiple ways that Congress has provided relief and protection for your business. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave. The contractors eligible are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19.
The CARES Act also provides a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis.
Read the Small Business Owner’s Guide to the CARES Act for more information about the programs available to help your business during the COVID-19 situation. You may also reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter or SBA District Office.