I had mentioned in the respite thread last night that I have been helping my clients with applying for funding through the new legislation. Someone asked if I could share that information.
I’m only reluctant because things are happening so quickly, it’s difficult to keep up and I’m far from an expert on any of this. What I’ve been doing is reading all the documents, news articles and relevant information, and then helping my clients navigate the paperwork for applications. Twice now, we’ve had to reapply as documents requirements have changed. But it gives us something to do. ?
It appears unemployment benefits have been extended to independent contractors, self-employed and others who would not usually qualify for unemployment insurance. Applications are through your state. But here, the state (when the unemployment benefits website is actually working) says that won’t be available until maybe April 3.
Listed below (including links) are the small business resources I’ve been using for those of us trying to keep a small business afloat:
Paycheck Protection Program –
Paycheck Protection Program (PPP) Loans
The program would provide cash-flow assistance through 100 percent federally guaranteed
loans to employers who maintain their payroll during this emergency. If employers maintain
their payroll, the loans would be forgiven, which would help workers remain employed, as well
as help affected small businesses and our economy snap-back quicker after the crisis. PPP has a
host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee
retention and salary levels, no SBA fees, and at least six months of deferral with maximum
deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they
were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would
be retroactive to February 15, 2020, in order to help bring workers who may have already been
laid off back onto payrolls. Loans are available through June 30, 2020.
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private
non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury
Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the
advance. The advance does not need to be repaid under any circumstance, and may be used
to keep employees on payroll, to pay for sick leave, meet increased production costs due to
supply chain disruptions, or pay business obligations, including debts, rent and mortgage
payments.
That’s all I have so far. I highly recommend talking to your accountant about any of the loan/grant programs and make sure it’s right for your business. There is a lot to unravel in the PPP that’s confusing and I think a professional read is necessary, especially for understanding what will actually be forgiven and what will need to be repaid.
I’d like to open this thread up for anyone who has more information and helpful links and encourage them to post them.
Otherwise, open thread
Another Scott
Thanks for this.
Repost – One page summary table of unemployment benefits in the bill from the Ways and Means Committee via Rep. Don Beyer.
Cheers,
Scott.
lamh36
Hey Tamara I have a nice clip for a musical respite thread. Should I email it to you are just tag you on twitter/FB?
I posted the clip, I believe you are already a twitter follower and on my FB page?
Elizabelle
Yea for you, TaMara. Meaningful work.
Mo Salad
Our office’s initial take. You want the PPP, due to the forgiveness option when you apply the funds for the designated purpose. Even if not forgiven, you get a 10 year repayment at under 4 percent interest.
If you do the EIDL to get the quick 10,000 and later apply for PPP, the 10,000 will need to be paid back as part if the PPP loan.
Very fluid situation, but if your CPA office is still doing 1040s this week when they need to be working on getting information together for your business’s SBA applications, they are doing it wrong.
Redshift
Thanks! I didn’t get back to the thread to follow up, but I saw your reply and I was going to suggest that just a list of good links would be useful.
Another Scott
Thread (still in progress) –
Good luck folks.
Cheers,
Scott.
West of the Rockies
I hope Martin checks in soon with his take on whether we are seeing the impact yet of early shutdowns. It’s been about two weeks in California (longer in the Bay Area). A flattening of the curve should just about begin to become apparent.
TaMara (HFG)
@lamh36: Email or tag me on twitter would be great (tweets are easy to repost here)
WaterGirl
i did some googling last night after seeing your comment, TaMara, and it looked like you have to be an S-Corp as an independent contractor in order to qualify for anything. I am not good at navigating a bureaucratic maze, and I am not set up as an S-Corp, so I would love to be told I am wrong about the S-Corp requirement.
WaterGirl
@West of the Rockies: See Martin at #113 and #130 in the previous thread.
TaMara (HFG)
@WaterGirl: You can be a sole proprietorship, it’s a different form, but the SBA grant/loan is available. But not the PPP (I believe, but again, CPA would know best).
TaMara (HFG)
And with that, I’ve got to run -ducks need to go to bed and pups need to be fed – but I’ll check back later.
raven
@West of the Rockies: It’s in the previous thread.
lamh36
@TaMara (HFG): I tagged you on twitter
Mo Salad
Independent contractors can apply for their own PPP loans.
Final regs just came out an hour ago.
DOCKET # SBA-2020-0015
Chyron HR
B-but Bernie told me those loans were Democratic handouts to their billionaire masters.
randy khan
@Mo Salad:
I’ve read the rules, as I’ve been spending a lot of time on PPP over the last week.
A couple of quick items:
The CARES Act says the loans can have interest rates up to 4% and a term of up to 10 years, but the rules have set the interest rate at 1% (good) and the term at 2 years (not so good), although neither of those things matters much if you get the loans forgiven.
Independent contractors are eligible for the PPP loans, but they can’t apply until April 10.
BR
@West of the Rockies:
I know folks in health care in the bay area — the curve is flattening there. Hospitals are actually running below average demand right now because people are afraid to go in to the hospital for other things, and because there hasn’t been a flood of COVID patients. They’re cautious, but optimistic.
Some areas of SoCal are doing ok but others aren’t — seems like the wealthy areas of West LA / beach communities didn’t isolate enough and have higher case loads, and Riverside may as well. But in between things seem ok, and I hear San Diego isn’t crazy either.
different-church-lady
I’ll be exploring any and all relief granted to independent contractors, as I can document thousands of dollars of booking cancelled as a direct result of the pandemic. I’ll share whatever information I find and experiences I have.
West of the Rockies
@WaterGirl:
Thank you! You, too, Raven.
Zinsky
The Act also provides relief to older Americans who have to take Required Minimum Distributions (RMDs) from their IRAs or SEPs after turning 70 1/2. Americans can also take withdrawals of up to $100k from their IRA before age 59 1/2 to get them through the crisis. The amounts need to be repaid over three years but can be made by what were previously undeductible excess contributions. Again, consult your personal accountant for more details.
NOTE: I’m a retired CPA
raven
@Zinsky: They changed the RMD to 72.
?BillinGlendaleCA
@BR: The kid, an OR nurse, volunteered to be furloughed for one day a week(she works 3 12 hour shifts per week), they not doing any elective surgeries.
Fair Economist
@West of the Rockies: Santa Clara looks like maybe it is flattening. Los Angeles County level for four days but still a high percentage growth. OC a little slower than LA, but not flattening.
BR
@?BillinGlendaleCA:
Was that in the bay area or in the Glendale area?
DropDminus
From the bankruptcy perspective there is an important provision in the act that allows people who are in current chapter 13 plans to extend their cases by up to two years if they are negatively affected by the virus. This is tremendously important for many of my clients who are experiencing severe reductions in their income but who will need to complete their plans to save their homes.
Martin
@West of the Rockies: Yeah, we definitely are. It’s limited to the bay area now, and it’s not enough to affect the fatality numbers in any meaningful way – just a little easing – but if you look at fatalities around the bay area, which has had cases longer than NY, things look very good. SF has only had 7 fatalities out of a population of 1M and you’d expect them to have a lot of contact there.
The biggest failure in the state is that we don’t track hospitalizations. We never have. So I’m really relying on fatalities to drive the trend, and we’re another week out from that becoming apparent.
Here in OC we only have 115 Covid hospitalizations, 47 of which are ICU cases in a county of 3.5M. We can handle that in a single hospital, and we have quite a few hospitals here.
LA looks like they’re going to have the most trouble, but even there things don’t look catastrophic. I think their hospitals will be very stressed, but I don’t think we’ll see what NYC is seeing, even at our peak. I’m guessing now that CA will make up less than 5% of the nations fatalities
I should add – NYC would normally be able to transport patients to NJ and Nassau County but those places are getting hit very hard as well. If OC’s trajectory holds up, we can take some of LA’s load. So that’s another thing helping here.
Brachiator
Great post. Thanks
CPAs are scrambling to understand the new rules as well.
I’m not sure whether it was already posted, but there is information and applications for Small Business assistance at the US Treasury website.
dmsilev
@Martin: The very early (by comparison to the rest of the country) shelter in place orders really do seem to have helped. It’s coming up on three weeks for the Bay Area, and two for the entire state.
Ruckus
@Martin:
I would imagine that even with the CA population, the density per sq mile would be better than NYC and that allows the curve to naturally flatten. I’ve been off work for 3 weeks now and expect probably 3 more, my boss expects I’ll be off till the end of April. At least. So it’s possible that some of this is also due to people hunkering down earlier.
?BillinGlendaleCA
@BR: Cedars, near Beverly Hills.
Goku (aka Amerikan Baka)
@Martin:
I assume those low numbers of fatalities won’t hold, since we’re only at the beginning of the exponential curve, but won’t be as bad as New York, right?
dmsilev
@Ruckus: We’ve been planning on beginning of June at the earliest for any real reopening. Could well be later; we’ll have a better idea of the landscape in another two or three weeks.
Kent
This unemployment insurance thing is going to be an utter clusterfuck in red states and probably difficult in blue states.
My daughter lives in Arkansas and has tried 3 times to apply for unemployment through the state’s web site. Each time she gets through the 20 min endless interview and then it crashes. In states like Arkansas the basic functions of government like unemployment insurance have been utterly underfunded and hamstrung over decades. I don’t see how they are possibly equipped to deal with a flood of new applicants under a whole new set of somewhat ambiguous rules. States like WA with a good governor and better sense of public sector are going to struggle. But in the south? It is going to be a total disaster. I predict only a small percentage will actually get these new benefits. The systems to administer them at the state level simply aren’t there in the south.
debbie
Huh. Three ads on this page for three different brands of hand sanitizer.
Martin
@Ruckus: Yeah, what we really don’t have a sense of is how much smaller and voluntary efforts will bend the curve. We know it does – eventually people just get too scared to go out and that solves the problem on its own, but you can probably imagine that folks in OC looking at Santa Clara and seeing a very familiar population would take voluntarily actions better than a red county in the south who doesn’t see a familiar population in Santa Clara.
West of the Rockies
@Martin:
Thank you, Martin. So, the lesson from the Bay Area… Trust science, listen to experts, don’t place business over people.
I’m from your area. I was born in Fullerton.
Martin
@Goku (aka Amerikan Baka): Yeah, so, the numbers are climbing, and will climb quite a bit, but it’s not accelerating as quickly.
Consider you in your Prius drag racing a Porsche. You both accelerate as fast as the car will go for 10 seconds. One of you will be moving MUCH faster than the other, even though both of you are going faster than when you started. California is the Prius of cases and fatalities right now. NY is unfortunately the Porsche.
Add to that the effect of the lockdown, meaning we’re only accelerating for 7 seconds instead of 10 for NY because we locked down early, so we’re going slower yet.
Ruckus
@dmsilev:
We do a fair bit of medical industry tooling so some of our work is undoubted considered critical. Boss said we are loaded with work, it was my decision to hunker down. He’s fine with it, you may have noticed that I’m not exactly over joyed with my practice retirement situation. I work in a small machine shop, often we are spread out quite a bit, often 20 feet or so apart, so it might not be horrible. Still I’m a higher risk individual, given my age and health issues. Not as high as some for sure, but that seems to be less than a given for survival.
Ruckus
@Martin:
Yes to all of that.
Exactly why I’m not working and expect not to be for another 3-8 weeks.
Kent
If we actually had widespread testing available then we could actually manage things like keeping critical industries open through widespread and repeated testing of employees.
Ruckus
@Martin:
I’m also worried about what happens after the curve flattens even more and people expect to go back to work, thinking that everything is normal – and it sure won’t be because the curve is not gone until enough are vaccinated – which is currently rather difficult to do. But there is only so much not working that can be accomplished, what with food, rent/mortgage, insurance, car payments, etc.
Martin
@West of the Rockies: Well, I’m not sure ‘don’t place business over people’ applies there.
The bay area is very cognizant of exponential curves, as that’s how startups work. They get a shit-ton of funding, earn no money, but look to scale through network effects until they turn into Facebook. They know that you’re much better off taking your fixed cost hit now rather than putting it off. That’s almost instinctive to them. Further, they are very wired to work from home so that’s a relatively easy transition to make.
But look at Apple. They have $100 billion in savings. They closed their stores ahead of lockdowns and committed to pay all employees including part time retail through the closures. They have this huge endowment they can live off of, nearly indefinitely. They don’t need bailouts or loans or anything. When it’s time to reopen, they won’t have to do a hiring/training cycle, they’ll pretty much just open while everyone else is struggling. Everyone else looks at them as wasting money, but they are going to make fucking bank through this and they know it. They know cutting costs isn’t how you get stronger. There’s a lot of that attitude in the bay area – spend into adversity and you’ll dominate those that are cutting.
The tech guys are smart as hell.
Martin
@Ruckus: Reopening is going to hard as hell. I don’t think people understand just how hard this will be, how much coordination and discipline will be involved, and how much government planning it’s going to take. No fucking way we get a federal plan, it’ll be 50 state plans, and because of that, interstate travel is going to be a shitshow. National corporations are going to lose their shit having to adhere to 50 sets of regulations. It’s really going to prolong this much longer than it needs to.
Ruckus
@Kent:
That still doesn’t help someone like me, a higher risk individual. Not that even normal risk people haven’t died from this. They have. And if you saw my twitter feed, it has a lot of people who are like me, old with health issues and a rather surprising number of people who span the gamut of ages and are high risk, due to things like compromised immune systems.
Testing is necessary, but that doesn’t lock the barn door, which short of a reliable vaccine, is the only control.
Ruckus
@Martin:
Once again, this.
With our almost totally inoperative federal government (more like federal blockade) this is going to only get better for some and far worse for others long before it gets better. These fools are shooting themselves in the genitalia with large bore weapons and even if the “leaders” of many of the states live, they are going to have a decimated population at best to rule over.
Kent
I have a co-worker who dropped her iPad off at the local Apple store for service 2-days before they shut down. She is now screwed and won’t see it again until after they decide to re-open their stores, maybe in May? Apple doesn’t give a shit. Apparently they are supposed to be fixing and mailing them back to customers but she hasn’t heard anything yet.
I told her to “rent” a new one from Apple by ordering one online and returning it for a full refund when the stores open back up. Apple has extended its return policy for 14 days after the stores re-open.
Kent
Oh, I agree entirely. But for say the 3M plants that are manufacturing N95 masks or the companies in Seattle making ventilators. Test the staff daily or weekly and keep them under strict quarantine when off duty. And maybe keep the younger employees working if you can and cycle in younger workers from other divisions so you can keep the older folk safe.
We don’t have the capacity to test entire cities like Seattle. But we can isolate off certain small bubbles of critical industries and try to keep them safe through universal testing and isolation. While at the same time implementing as many safety protocols a work as possible.
They are already doing that sort of thing for critical services like power and water utilities. They are actually setting up campers and mobile homes on site at many of these locations and keep the staff on lockdown because they have no choice and those sorts of highly technical jobs aren’t easy to replace.
glc
I’m told RMD requirements are waived this year but there some details for the actual procedure followed still to be settled (or communicated).
In particular, one would think it would be tax year 2020 but one would also think it would be tough to do retroactively.