SBA EMERGENCY LOANS

• Small businesses (under 500 employees) and non-profits can apply for a loan up to $2 million for economic injury for capital needs.
  • Payroll, rent, debt, etc.
• Interest rate for small business is 3.75% and for non-profits is 2.75%.
• Authorized 1-year deferment on the first payment.
• Term can go out for 30 years.

 Application Process

• Submit application online at www.disasterloan.sba.gov 

• The application is a simple 2 page application.
  • There are a lot of people using the website so the portal is down currently due to maintenance on the website.
• You will need the following information: 
  • SBA Business Loan Application completed and signed by business applicant;
  • IRS Form 4506-T completed and signed by the business, each principal owning 20% or more of the applicant business, each general partner or managing member and, for any owner who has more than 50% ownership in an affiliate business;
  • Personal Financial Statement (SBA Form 413) completed, signed and dated by the applicant; and
  • Schedule of Liabilities listing all fixed debts (SBA Form 2202 may be used).
• Then SBA reviews your credit before conducting an inspection to verify your losses.
• A loan officer works with you to provide all the necessary information needed to reach a loan determination.
• SBA’s goal is to arrive at a decision on every application within 2-3 weeks.
• Once you have been approved the first disbursement will be made to you within 5 days.
• If you have any questions during the application process you can call the SBA customer service line at 1-800-659-2955.

 Common SBA Questions/Concerns

• I can’t get the website to work.
  • There are a lot of people trying to submit their applications right now.
  • SBA suggests submitting your application during off-peak hours 7pm-7am
• How long will it take to receive the loan?
  • It will take SBA about 2 weeks to process the loan and once approved, should receive money within 5 days.
• Does SBA have enough people to handle all these applications?
  • SBA is currently staffing up the call center and loan center.
• I have great credit and got a loan from my bank. Am I still eligible for an SBA loan?
  • You would only be eligible for a loan for any unmet needs.
    • Example: If you got a loan from your bank to cover payroll you would not be able to use the SBA loan for payroll.

IS MY BUSINESS ESSENTIAL?

• Check out the CISA Guidance of Essential and Critical Infrastructure Workforce
• Watch for future updates from Governor Stitt
• If your industry is not on the essential list, you can petition to the Governor here

CONGRESSIONAL ACTION:

H.R. 6074 Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020 (Phase 1 Bill)

• Signed into law on March 6, 2020.
• Provides $8.3 billion to increase the availability of tests, support public and private efforts toward developing a vaccine, purchasing essential equipment and supplies, and assisting state and local health departments.
• $20 million for small business loans.

H.R. 6201 Families First Coronavirus Response Act (FFCRA) (Phase 2 Bill)

• Signed into law on March 18, 2020.
• Requires businesses with fewer than 500 employees to provide 14 days (80 hours) of paid sick leave.
• Additionally, COVID-19 affected employees are entitled to up to 3 months paid leave at two-thirds of the employee’s pay.
• Businesses with more than 500 employees do not have to provide 14 days of paid sick leave.
• Businesses with fewer than 500 employees (Small Businesses) will receive a 100% tax credit for both types of leave up to capped levels, credited against quarterly payroll taxes.

More on the Family and Medical Leave Requirements under FFCRA

• Goes into effect April 1, 2020 
• Qualifying reasons for Leave – an employee qualifies for expanded family and medical leave if the employee is unable to work (or unable to telework) due to a need for leave because the employee:

1.     Is subject to a Federal, State, or local quarantine or isolation order related to COVID-19;

2.     Has been advised by a health care provider to self-quarantine related to COVID-19;

3.   Is experiencing COVID-19 symptoms and is seeking a medical diagnosis;

4.     Is caring for an individual subject to an order described in (1) or self-quarantine as described in (2);

5.     Is caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or

6.     Is experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.

• Small businesses with fewer than 50 employees may qualify for exemption from the requirement to provide leave due to school closing or childcare unavailability if the leave requirements would jeopardize the viability of the business as a going concern.
  • To elect this small business exemption, you should document why your business with fewer than 50 employees meets the criteria set forth by the Department, which will be addressed in more detail in forthcoming regulations.
• Tax credits
  • Covered employers qualify for dollar-for-dollar reimbursement through tax credits for all qualifying wages paid under the FFCRA.
  • Qualifying wages are those paid to an employee who takes leave under the Act for a qualifying reason, up to the appropriate per diem and aggregate payment caps.
  • Applicable tax credits also extend to amounts paid or incurred to maintain health insurance coverage.
  • To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes.
  • If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.
  • Examples from the Department of Treasury
    • If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments.  The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.
    • If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments, and file a request for an accelerated credit for the remaining $2,000.
    • Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances.  These credits will be claimed on their income tax return and will reduce estimated tax payments.
  • There will be more guidance from IRS and Treasury next week

USEFUL WEBSITES

www.sba.gov/coronavirus 

https://www.okcommerce.gov/covid19/

http://www.oksbdc.org.

https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

https://criticalworker.ok.gov/

https://www.irs.gov/coronavirus

https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave

https://coronavirus.health.ok.gov/