April 2 COVID-19 Update

Auto Recyclers must hustle to claim their share of millions in forgivable COVID-19 SBA Loans

EIDL: Get $10K just for applying Under the CARES Act signed into law Friday, the Small Business Administration will give businesses a $10,000 advance just for applying for an Economic Injury Disaster Loan. The government must provide that $10,000 in three days.

To apply for the Economic Injury Disaster Loan (EIDL) apply today at this link below
https://covid19relief.sba.gov/#/

Federal Government Economic Relief in Response to COVID-19
The U.S. Treasury and the Small Business Administration (SBA) have begun issuing implementing regulations on the $2.2 trillion Coronavirus Aid, Relief, and Economic Security Act (the CARES Act) that was signed into law last week.  While the preliminary main provisions are broadly outlined below, it is recommended that this briefing is informational only and does not constitute legal guidance.  Each business should consult legal and/or accounting firm assistance for their particular business’s situation.  Also discussed below are the first two coronavirus financial relief packages.
 
Bill #1 – Coronavirus Preparedness and Response Supplemental Appropriations Act, March 6, 2020
SBA Section 7(a) loan program expansion:  $50 billion available for “no-fee small business interruption loans” through the SBA’s Economic Injury Disaster Loan Program (EIDL).   The loans, up to $2 million working capital, will be made and serviced by banks and lenders enrolled in this program as well as others that may qualify.  The business must be 500 or fewer full or part time employees, a sole proprietorship or an independent contractor, and not receiving assistance from a Small Business Investment Company (SBIC).  The program is aimed at assisting small businesses meet their working capital and normal business operating expenses. The direct and indirect loans have terms up to 30 years with 3.75 interest and collateral may be required for loans over $25,000.
 
Bill #2 – Families First Coronavirus Response Act, March 18, 2020
This measure does not have any business loan programs but includes health and tax credits for family and medical leave.   A separate analysis was sent yesterday on these issues.
 
Bill #3 – The CARES Act, March 27, 2020
The CARES Act has many provisions and qualification requirements for economic assistance to businesses impacted by the COVID-19 pandemic.  The program begins on April 3 and major small business provisions totaling $349 billion include:

• Paycheck Protection Program under the SBA Section 7(a) program:  The business must be 500 or fewer full or part time employees.  The maximum loan amount under this program is 250 % of average monthly payroll cost up to $10 million.  It is intended to cover 8 weeks of payroll and debt obligations. The program expands usage to include payroll support, salaries, rent or mortgage payments, utilities and interest on debt occurred during this time period.  TERMS WERE JUST CHANGED – THE RATE IS 0.50% FOR 2 YEARS.  Loan payments will be deferred for at least 6 months.   Some loan forgiveness will be based on eligible uses including the retention of employees or quickly rehiring.   The deadline to apply is June 30, 2020.  You can start applying tomorrow April 3rd through an SBA approved lender
• New grant program:  The SBA will provide fast relief for those businesses waiting for the above mentioned EIDL loan approval.  Applicants can receive up to $10,000 within 3 days to cover immediate salary, mortgage, rent and other expenses.
• Modification of net operating losses (NOLs) rules, interest expense deductions, and alternative minimum tax credits.
• Employer eligibility for refundable tax credits for employer’s share of 6.2% Social Security tax.
• Fairly straight forward and short governmental guidance on the CARE Act loans, employee retention credits and SBA loans were issued, and these links are the first official guidance directives, including a loan application form – 3rd bullet:

https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf
https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf
https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
https://home.treasury.gov/news/press-releases/sm962

As mentioned above, please consult with your financial or legal experts since each business is different and the provisions are numerous. 

Other Link:
KPA Sponsored COVID-19 Resource Center