As we continue to face unprecedented economic challenges, there is a lot of information swirling around about relief programs & financial assistance. It can be difficult for business owners to know where to start.
Today we’re highlighting 6 major programs we want to make sure are on your radar.
We are by no means the experts on these new programs & the guidelines are in a very fluid state — we highly encourage you to go directly to the sources sited for complete details.
At the Federal Level:
SBA Economic Injury DISASTER LOAN & EMERGENCY ADVANCE
The State of Maryland has received U.S. Small Business Administration Economic Injury Disaster Declaration. This means small businesses and private non-profit organizations impacted by the COVID-19 pandemic can apply directly to SBA for low-interest federal disaster loans. This assistance is crucial and can help businesses pay bills, payroll, and accounts payable during this difficult time.
IMPORTANT ADDITION: With the passage of the CARES Act, an additional $10 billion has been added to the SBA’s EIDL program. Accordingly, the program now includes a $10,000 Emergency Advance from SBA. This loan advance may be available even if your EIDL application was declined or is still pending, and will be forgiven (making it functionally similar to a grant) assuming you meet the necessary program guidelines. *Note - Businesses that applied to the SBA EIDL before Monday, March 30, 2020 would need to reapply to receive this add-on.
Find more information & the application for the SBA’s Economic Injury Disaster Loans here.
Payroll Protection Program
Under the CARES Act, $350 billion will be used to establish the Paycheck Protection Program (PPP), which provides loan guarantees to small businesses to assist with payroll costs for workers who are forced to stay home. Loans will be available for firms that meet SBA small business size standards, self-employed, sole proprietors, independent contractors (i.e., workers in the “gig” economy), and certain nonprofits including 501(c)(3)s, 501(c)(19)s, and tribal business concerns with fewer than 500 employees. The loan is eligible to be forgiven under certain guidelines.
Payroll Protection Program loans will be executed through an approved SBA lender — starting later this week. A list of current SBA Approved Lenders in Maryland is available here.
Tax Credit for Required Paid Sick and Family Leave
The Families First Coronavirus Response Act (the "FFCRA"), signed by President Trump on March 18, 2020, provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.
The FFCRA gives businesses with fewer than 500 employees funds to provide employees with paid sick and family and medical leave for reasons related to COVID-19, either for the employee’s own health needs or to care for family members. Workers may receive up to 80 hours of paid sick leave for their own health needs or to care for others and up to an additional ten weeks of paid family leave to care for a child whose school or place of care is closed or child care provider is closed or unavailable due to COVID-19 precautions. The FFCRA covers the costs of this paid leave by providing small businesses with refundable tax credits. Certain self-employed individuals in similar circumstances are entitled to similar credits.
Eligible Employers will report their total qualified leave wages and the related credits for each quarter on their federal employment tax returns. Comprehensive program details, as well as instructions to apply for an advance credit for employers without sufficient funds to cover the current payments, can be found here.
At the State Level:
Maryland has authorized $130 million in loan and grant funding for small businesses and manufacturers that have been negatively impacted by the Coronavirus (COVID-19).
3. Maryland Small Business COVID-19 Emergency Relief Grant Fund
This $50 million grant program for businesses and non-profits offers grant amounts up to $10,000, not to exceed 3 months of demonstrated cash operating expenses for the first quarter of 2020. Learn more.
4. Maryland Small Business COVID-19 Emergency Relief Loan Fund
This $75 million loan fund (for for-profit businesses only) offers no interest or principal payments due for the first 12 months, then converts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per annum. Learn more.
5. Maryland COVID-19 Emergency Relief Manufacturing Fund
This $5 million incentive program helps Maryland manufacturers to produce personal protective equipment and other items identified as Critical Needs Items by MEMA and DGS, that are urgently needed by the State of Maryland, Maryland-based hospitals and healthcare facilities, and emergency and first responders. Learn more.
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Again, above is just a rough overview of the programs currently available. The terms & criteria of these programs have been rapidly evolving. Please seek the most current & comprehensive program details from the relevant sponsoring organization directly.