The latest information on COVID-19: resources, and support for small businesses.

CARES ACT

In an effort to keep you updated on the availability loans and other relief in response to the Corona Virus (COVID-19) crisis, we wanted to provide this update and summary of the CARES Act.

Updated 5:30 PM EST Saturday 3/28/20 – The CARES Act has been signed into law and the Senate Small Business Committee Saturday afternoon released a detailed guide on the programs and benefits to small businesses that is in the legislation! What’s in it? What’s next?

Whats in it?

The CARES Act expands the maximum loan in the 7(a) program to $10,000,000, covers ALL existing SBA 7(a) and 504 borrowers payments for the next six months (you read that right…. every existing SBA borrowers payment will be paid for them), will cover payments for the first six months on any SBA 7(a) or 504 loan closing over the next several months, and offers to forgive a portion of the debt for loans taken to cover payroll between now and June 30, 2020 through the Payroll Protection Program. Rather than try and summarize what is in the bill we wanted to pass along a guide the Senate Small Business Committee released Saturday afternoon. There are still a lot more questions than answers right now, but this provides a great overview of what will be made available over the next few weeks.

See CARES Act Lending Programs

DOWNLOAD THE SENATE GUIDE TO CARES ACT

DOWNLOAD THE CHAMBER OF COMMERCE SBA GUIDE

What’s next?

No sooner than the CARES Act was signed into law Friday small businesses throughout the country started calling their bankers, accountants, and SBA lenders like us. The number one question is when can I apply? The answer is you can’t apply for a loan program that does not yet exist. The realistic answer is you will probably be able to apply over the course of the next few weeks for the new programs the bill created Friday. The bill gives the SBA 30 days to amend and write the regulations and policies that will govern these changes and new programs. There is no doubt based on the detail in the guide released by the Senate earlier today and the authority Congress has granted SBA to streamline and bypass normal procedures this will no doubt be rolled out much faster than normal due to the urgency. As the SBA writes regulations and policy over the next few weeks more questions will be answered both for banks who want to participate and business owners who want to apply. The guide sheds light on that process. With that said as of now other than SBA’s regular 7(a) and 504 program, the main loan program launched so far in response to the disaster is the Economic Injury Disaster Loans. Remember businesses can apply right now for Disaster Loans up to $2,000,000 with 3.75% rates fixed for 30 years directly from SBA. Someone can apply for an Economic Injury Disaster Loan now by going to https://disasterloan.sba.gov/ela.

Since neither the Disaster Loans or the Payroll Express program can refinance debt other than short term debt taken since the crisis started, businesses need to be reminded they can come through us and refinance their business mortgage and cash out up to 20% for eligible business expenses they have payable over the next 18 months using our SBA-504 program. The rates on the 504 program we offer were the lowest in program history at 2.88% this month fixed for 25 years and as a result of this new legislation if we refinance now, their payments could be paid for a period of time if they fund over the next few months.

Payment Waivers for Existing 504 Borrowers

Over the course of the next week or so as we get the details from SBA on how the payment forgiveness for the next six months will occur for existing 504 borrowers we will be reaching out to all 504 borrowers to let them know the details on this benefit to their business. Many have already deferred payments working with our staff.

As we get more guidance from SBA we will pass it along to our lending partners realizing many we work with on 504 loans may not be on SBA’s distribution list. As we hear webinars are made available by SBA (which they will no doubt schedule over the next few weeks) we will make you aware of those. We hope the attached is helpful as bankers and businesses consider which of these programs they may want to offer snd use and how it will benefit them.

Please once again distribute this information to all your contacts inside your organization and out so that those businesses being impacted impacted by COVID-19 may benefit from these loans.

Additional Resources related to COVID-19

Treasury, IRS and Labor announce plan to implement Coronavirus-related leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave:

https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

KEEPING WORKERS PAID AND EMPLOYED, HEALTH CARE SYSTEM ENHANCEMENTS, AND ECONOMIC STABILIZATION

https://www.finance.senate.gov/imo/media/doc/CARES%20Act%20Section-by-Section%20(Tax,%20Unemployment%20Insurance).pdf

FORBES ARTICLE: LIST OF STATES & FEDERAL TAX OFFICE CLOSINGS, FILING DELAYS & EXTENSIONS DUE TO CORONAVIURS

https://www.forbes.com/sites/kellyphillipserb/2020/03/12/heres-what-we-know-about-extensions-other-tax-relief-due-to-coronavirus-concerns/#1c6cbc453412

IRS unveils new People First Initiative; COVID-19 effort temporarily adjusts, suspends key compliance program

https://www.irs.gov/newsroom/irs-unveils-new-people-first-initiative-covid-19-effort-temporarily-adjusts-suspends-key-compliance-program

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