The Cares Act & Small Business in Waterbury

The CARES Act was passed at the federal level on March 27, 2020, and for the past 24  hours we have been hearing understandable confusion from the business  community as they try to understand what it all means and what they  should be doing. Here are some of the different components of the CARES  Act that we at Main Street Waterbury feel might directly apply to Waterbury’s  small businesses and business owners.  To access the Small Business Guide to the CARES Act from the  Division of Emergency Management and Homeland Security. Click Here

NOTE: This should NOT be considered a definitive guide or expert advice – this is simply the best we have been able to do with the information currently available to try and boil it down to the basics.  Agencies and lenders are also processing this information yet, so please be patient as they try to catch up and assist you. Currently here is a list of the CT SBA active lenders, we anticipate that the Federal government will provide guidance on who is included, so please be sure to confirm. 

Paycheck Protection

• 100% federally guaranteed loans to small businesses who maintain  their  payrolls during the COVID-19 crisis to be used for payroll,  mortgage  interest, and other qualified expenses 
• Loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.
• Eligible if you are:
  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SBA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An individual who operates as a sole proprietor
  • An individual who operates as an independent contractor
  • An individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organization that meets the SBA size standard
• Lenders  offering these loans have not yet been listed from the Federal government, it's our understanding that this would be any bank that currently offers SBA 7(a) Loans. List here includes all active SBA lenders in CT. Please confirm when contacting lender
• Best resource with far more detail – https://www.uschamber.com/sites/default/files/023595_comm_corona_virus_smallbiz_loan_final_revised.pdf

Changes/expansions to the SBA Economic Industry Disaster Loans (EIDLs) 

These are the federal loans we have already been heavily promoting (https://www.sba.gov/funding-programs/disaster-assistance), only now they have been expanded with extra benefits:

• EIDLs are now also available to Tribal businesses, cooperatives, and ESOPs with fewer than 500 employees. They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors.
• Borrowers can now receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.
• Small Business Administration resource partners are available to help guide you through the loan application process. You can find your nearest Small Business Development Center (SBDC)  https://ctsbdc.com/covid19-businessresourcecenter/

***Can a business get an EIDL and a Paycheck Protection Program loan?

Yes, small businesses can get both an EIDL and a Paycheck Protection Program loan as long as they don’t pay for the same expenses. However, be sure to check with your financial advisor or lender before taking both types of loans if you are not sure of the specifics.

Relief for Existing SBA Loans

If you already HAVE an existing SBA loan, you may be eligible to have up to six months of payments covered. Contact your lender to find out more. 

Business tax provisions 

There is a LOT to unpack here, so best recommendation would be to eventually discuss them with a tax professional about which might apply to your company – you should have time to do this as the dust settles. 

Pandemic Unemployment Assistance Program

• Unemployment benefits will now extend to business owners, self-employed individuals, independent contractors, gig workers, and those with a limited work history and history of wages earned who wouldn't otherwise qualify for unemployment compensation but cannot work due to the coronavirus emergency. 
• To obtain pandemic unemployment insurance coverage, contact the state unemployment office: http://www.ctdol.state.ct.us/UI-online/index.htm

Extra Unemployment Benefits

• An additional $600 per week in unemployment from the federal government on top of whatever base amount a worker receives from the state. That boosted payment will last for four months  through July 31, 2020.  
• Unemployment insurance has been expanded to last 39 weeks.
• Here's a quick Q&A resource from NBC News:  https://www.nbcnews.com/politics/congress/coronavirus-unemployment-benefits-here-s-who-qualifies-how-much-they-n1169846

Health Insurance Coverage

• All private insurance plans must cover COVID-19 treatments and vaccine
• All coronavirus tests free

Additional (smaller) changes to the previously passed Family First Coronavirus Response Act

These are finer points that primarily tweak the exact caps and parameters of how much businesses may be required to pay IF your employee meets the requirements to be covered by this law. For the latest release of FACTS and Q&Q click here (as of March 30, 2020):  https://www.dol.gov/agencies/whd/pandemic