News from Representative Luria

Image Image Image Image Image Image Image

Dear Friend,

 

On March 27, I voted for the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which will strengthen both our public health response and economic security in light of the COVID-19 pandemic. To that end, this bill provides substantial resources to help small businesses get through the current economic challenges.

What entities are eligible for small business assistance?

Generally, businesses and nonprofits with fewer than 500 employees are eligible for assistance from the Small Business Administration (SBA). However, for some industries SBA defines small businesses by annual revenue or by a different employee standard. See here for SBA’s full list of eligibility by industry.

Additionally, self-employed individuals, sole proprietors, and independent contractors may also be eligible for assistance.

What is the Paycheck Protection Program?

The CARES Act provided $349 billion for SBA to administer the Paycheck Protection Program (PPP). The PPP will provide loans of up to $10 million to small businesses that have been harmed by the coronavirus pandemic. PPP loans may be used to cover payroll costs, healthcare benefits, mortgage interest payments, rent, utilities, and other interest payments.

The cost of eight weeks of payroll and operating expenses will be forgiven from the loan. So, for example, if your business takes out a $5 million loan and the cost of payroll and operating expenses for eight weeks is $4 million, you would only have to repay the remaining $1 million.

The interest rate on PPP loans is 0.5% and the loan will mature after 2 years.

When and where can I apply for a PPP loan?

You can apply for a PPP loan through a local SBA-approved lender. You can find a list of SBA-approved lenders in Virginia here.

Lenders may begin processing applications as soon as April 3 and will be available through June 30. You can find a sample application form here.

My business needs immediate cash assistance. Are there any options available?

Virginia small businesses are also eligible for Economic Injury Disaster Loans (EIDL). The EIDL program provides loans of up to $2 million to help businesses cover temporary losses of revenue. The interest rate on these loans is 3.75% for small businesses and 2.75% for nonprofits.

In addition, the CARES Act allowed small businesses and nonprofits to receive an immediate grant of up to $10,000 within three days of applying for EIDL assistance. This grant will not need to be repaid.

You can begin your EIDL application here.

When will I have to repay my loans?

Congress has directed SBA to defer payments on all loans for at least six months and up to a year. This deferment applies both to existing SBA loans as well as new ones issued under the PPP or EIDL programs.

Can I use multiple sources of SBA assistance at the same time?

Yes, but you cannot use multiple sources of assistance for the same purpose. For example, if you use a PPP loan to cover April salaries for a certain group of employees, you could not use an EIDL loan to pay for those same employees’ April salaries.

My business is part of a larger entity that collectively employs more than 500 employees. Does it count as “small”?

The CARES Act waived affiliation rules for receiving PPP loans for food and accommodations businesses and franchises. For businesses in other industries, SBA will evaluate eligibility on a case-by-case basis. SBA is working to quickly finalize rules and guidance for implementing CARES Act.

Is there tax relief available for small businesses?

Yes. The CARES Act created a new Employee Retention Tax Credit for businesses that can demonstrate economic losses due to the coronavirus pandemic.

For businesses with 100 or fewer employees, employers may claim a credit against payroll tax liability for wages paid to employees, up to $10,000 per employee. For businesses with more than 100 employees, the credit applies only to wages paid to employees while the business is shut down.

This credit can be applied to wages paid by eligible employers from March 13, 2020 through December 31, 2020.

Additionally, the CARES Act allowed small businesses to defer payment on payroll taxes. Under the new law, businesses can defer payment on half of their 2020 payroll tax until 2021, and can defer payment on the other half until 2022.

What programs are in place to support farmers and aquaculture businesses?

The CARES Act provided $14 billion to the Commodity Credit Corporation to provide support to farmers and help them cover declines in revenues or prices. Congress has also provided an additional $9.5 billion in assistance to farmers impacted by the coronavirus pandemic.

The CARES Act also provided $300 million in assistance to aquaculture and other fisheries businesses that have experienced revenue losses related to coronavirus. This assistance may include direct relief payments.

Are there counseling services to help my small businesses navigate these new programs and the current economic circumstances?

Yes. The CARES Act provided substantial resources to local partners to help small businesses navigate these challenging times. Local partners in Coastal Virginia include the Virginia SBDC and the Women’s Business Center at Old Dominion University.

Where can I find more information about support for small businesses during this period?

The SBA website has a coronavirus small business guidance and loan resources website with more detailed information about available SBA programs, including more information about the PPP.

If you have additional questions or concerns that are not addressed above, please do not hesitate to reach out to my office. During this difficult time, my team and I stand ready to serve Coastal Virginia.

 

Sincerely,


 Image

 

 

Unsubscribe | Privacy