How Much of the Bailout Package Will Main Street Get?

I'm passing this along from Sara Dawson. Thank you, Sara, for compiling this information. FYI: It looks like the stimulus checks might start arriving as early as mid-April. If the IRS has your bank information, then it can be a direct deposit. 

Sara Dawson
CFO
Omnirax Furniture Company
 
Corporations, Non-Profits and Sole-Proprietorship
 
Payroll Protection Program – All business with less than 500 employees and who were in business prior to 2/15/20 can apply for a guaranteed loan that is calculated based on your average monthly payroll expenses (up to payroll $100K for employees who earn more than that per year), multiplied by 2.5.  The loan can be used for Payroll Costs (including health insurance, retirement, vacation and sick pay benefits), Mortgage Interest, Lease or Rent payments and Utilities within 8 weeks of funding.  100% of the loan can be forgiven so long as all employees are paid.  They can be re-hired if they’ve been temporarily laid off.  Payments for any unforgiven portions of the loan are deferred for 6 months, at an interest rate of .5% which begins accruing at the time of the loan.  The loan term is 2 years.   No personal guarantee or collateral is required.  Loans will be serviced by banks and other lender, though it is recommended to apply with your current bank.  More information and  the simple loan application can be found here, though your bank will likely require you to complete their application form:
https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses?mod=article_inline
 
 
Express Bridge Loan Pilot Program Guide – This is a loan that is serviced by existing SBA lenders for loans up to $25,000 under the 7(a) lending program.  Borrowers must certify that credit cannot be obtained elsewhere and the funds must be used exclusively to support the survival and/or reopening of a small business.  Loan terms can be up to 7 years, and the interest rate can be as much as 6.5% over prime rate.  The loan must be personally guaranteed and the personal credit score of the business and the guarantor must be satisfactory under the lender’s standards.  The lender must have an existing banking relationship with the EBL applicant at the time of the disaster.  There are many banks around the country that are SBA lenders, be sure to check with your bank to see if they are an SBA lender if you wish to pursue this program.  You can find more information here or contact your local SBA bank.
https://www.sba.gov/document/support--express-bridge-loan-pilot-program-guide
 
Traditional SBA Economic Injury Disaster Loans (EIDL) – The federal government allocated more funds to the SBA to service disaster relief loans that can be used to pay other obligations, such as accounts payable, leases on equipment and other loans.  They have relaxed their lending criteria and have created a simple application to get you started at the SBA website.  They are offering $10K advance payments which can be deposited directly to your account within a short period of time to help tide you over until the application is processed.  Processing the application could take weeks to months due to the volume of applicants.  The amount of the loan will be determined by the case manager.  After completing the simple application, I imagine they will request further information to make this determination.  These loans will be at an interest rate of up to 4%, have a 10 year term and payments will be deferred for some period of time (unknown to me at this moment – 6 to 12 months?).  They will require some kind of personal guarantee and/or collateral.  You can apply directly with the SBA here:
https://www.sba.gov/funding-programs/disaster-assistance
 
Taxes – Per the Wall Street Journal: Employers would be able to defer paying their share of 2020 payroll taxes. They could then make half of those payments in 2021 and the other half in 2022. In addition, the bill creates a new tax credit for retaining employees. Those employers would be able to get a 50% tax credit against up to $10,000 in payroll and health benefits costs per employee. Employers must have experienced a revenue drop or be complying with government shutdown orders, and other conditions may apply depending on a business’s size. Businesses get the ability to apply losses from 2018, 2019 or 2020 to past years’ profits and claim refunds. Restaurants and retailers would benefit from the fixing of a mistake in the 2017 tax law that curbed their depreciation deductions on renovations. 
 
A great resource for Small Businesses in Marin – Small Business Development Center in San Rafael.  You can apply for their services which comes at no charge and they can help you navigate the SBA stuff.  The application is very simple and they respond quickly.  https://www.marinsbdc.org/
 
 
Individual Employees and Freelance/Gig Workers
 
Unemployment Benefits – You can apply for unemployment through the State of California.  You are not required to look for employment if you are out of work due to the pandemic.  Unemployment has been expanded to self-employed/gig workers.  The federal government has extended the period of time you can collect unemployment by 13 weeks for a total of 39 weeks in California.  It will also be adding an additional $600 per week to whatever your California benefit is.  California’s weekly benefit maximum is $450.  The amount of the benefit is calculated based on prior earnings.  So, if your weekly benefit is normally $40/week, you will receive $640.  If your weekly benefit is $450/week, you will receive $1,040.  You can find more information and find links to file a claim here:
https://www.edd.ca.gov/about_edd/coronavirus-2019.htm

Stimulus Check – All people with a valid social security number who earn less than $75K/year or $150K/year per couple will be sent $1,200 per adult and $500 per qualifying child under age 17.  People with higher incomes will receive smaller rebates: $5 less per every $100 they make over the limits. It phases out completely at $99,000 singles ($198,000 for couples).  If you made too much in 2019 to qualify for the rebate but your 2020 income qualifies you for the rebate, you’ll claim it as a credit on your 2020 tax return. Recipients can expect payments via direct deposit by about April 16, 2020, according to Treasury Secretary Steve Mnuchin. If the IRS does not have your bank information, payments will come via mail and take longer to arrive.

Credit Reporting – Per the Wall Street Journal:  Consumers who fall behind on their debt payments won’t necessarily take a hit on their credit reports. The bill requires lenders that allow struggling consumers to defer or skip loan payments to report the borrowers as current on their payments, even if they are not. Most consumers who were behind on their debts before the coronavirus crisis will continue to be reported as delinquent. 

Mortgages and Rent  – Per the Wall Street Journal:  The bill requires companies that service federally backed mortgages to grant a forbearance of up to 360 days to borrowers who say they have been harmed by the coronavirus outbreak. Servicers are prohibited from initiating foreclosure and processing foreclosure-related evictions for 60 days beginning March 18. Owners of multifamily properties can request a forbearance of up to 90 days, during which tenants cannot be evicted for nonpayment of rent or other fees.  

The key is that you contact your lender or landlord ASAP to discuss what your options are with them.   There is no regulation for rent/mortgage payment forgiveness, but rather just forbearance which means that you’ll need to make up these payments at some point.  But in order to stay in good standing, you must make arrangements with your lender or landlord AND, if you can make your payment, make the payment as you may have to demonstrate your financial hardship to qualify for forbearance.  Here is a YouTube link to a recent Attorney Action Club meeting hosted by Leo Manzione where lawyers discuss the new laws and regulations that are in place.  Information for tenants and mortgage holders begins at 35:30. https://www.youtube.com/watch?v=59sjQwlAnOw&feature=youtu.be

Student Loans – Per the Wall Street Journal:  The law would allow most Americans with federal student loans to suspend their monthly payments through Sept. 30, 2020, without any interest accruing. It would also enable employers to make tax-exempt contributions toward their workers’ student-loan payments. 
Taxes – Per the Wall Street Journal: People who don’t itemize their deductions would be able to claim up to $300 for charitable contributions.


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