On Friday, March 27, 2020, the US Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 Trillion Economic Relief Package for the Coronavirus pandemic. The legislation provides multiple forms of assistance to businesses and private individuals. The US Chamber of Commerce has developed a website to outline all of the many provisions within the bill. Also, many webinars and interactive learning sessions are being conducted on the relief package; visit Sugar Land Economic Development's "Additional Resources" page for a consistently-updated listing of these events.
On Friday, March 20, 2020, Governor Abbott announced that the U.S. Small Business Administration (SBA) has now granted Texas’ Economic Injury Disaster Loan (EIDL) assistance declaration, making loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19). An advance of up to $10,000 can be requested to be used for payroll, it can be transferred to the business bank account within 3 business days, and the remainder of the loan funded will be delivered within 3 to 4 weeks. If used for eligible expenses, the advanced portion of the loan will be forgiven.
With a massive $2 trillion allocated for businesses, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital quickly and broadly. There are a number of provisions that impact small businesses. Below are some of the highlights for businesses:
The Paycheck Protection Program (PPP), one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $349 billion in government-backed loans from private banks up to $10,000 of which is automatically converted to a grant when used to maintain payroll, which means that if you meet the requirements you won't need to pay the loan back. SBA has developed an Information Sheet for Borrowers. Applications for the PPP will open on April 3, 2020. Applications will be submitted through SBA-Approved private lending institutions, which can be found on the SBA Assistance Locator. The Houston District Office of the SBA also has a list of approved lenders in the Houston region.
The CARES Act makes select changes to taxes and tax policies in order to ease the burden on businesses impacted by COVID-19. These changes include:
Many of these changes will apply to small businesses all over the country, so it is vital to discuss with a tax professional which can apply to your company.
The CARES Act makes small changes to the Families First Coronavirus Response Act (FFCRA) in regards to paid sick leave, paid FMLA and more. These changes include:
The U.S. Small Business Association (SBA) is also providing targeted, low-interest disaster recovery loans to small businesses that are severely impacted by the situation surrounding COVID-19. Small businesses, small agricultural cooperatives and some private nonprofit organizations may be eligible for an Economic Injury Disaster Loan (EIDL) of up to $2 million, providing them with the necessary working capital to help businesses survive until normal operations resume.
SBA has streamlined the Economic Injury Disaster Loan initial application process to facilitate a larger number of loan applications. Businesses need to complete two forms, a Business Loan Application and a document for supporting information, and upload them. After submission of these documents, an SBA case manager will call and provide you with the rest of the forms. SBA is continuing to host daily webinars through the week of March 30 to April 3. If you need assistance with the application process, the Fort Bend County Small Business Development Center is a great resource.
The U.S. Small Business Association (SBA) can assist small businesses with accessing federal resources and navigating their own preparedness plans as described by the CDC’s Guidance for Businesses and Employers.
The U.S. Small Business Association provides a number of loan resources for small businesses to utilize when operating their business. More information on loans or how to connect with a lender is available on the SBA website.
The U.S. Small Business Association (SBA) has developed Lender Match, a free online referral tool that connects small businesses with participating SBA-approved lenders within 48 hours. Many of these programs can also be accessed at the Houston District Office.
The Office of the Governor has developed a website containing a comprehensive list of resources and important COVID-19 updates.
The Texas State Comptroller's Office is offering assistance in the form of short-term payment agreements and waivers of penalties and interest. More information about the options can be found on the Comptroller Website, or by calling 800-252-8880.
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