As we approach mid April, there are hopeful signs. The spring season is one of renewal every year, with religious traditions of resurrection, and mother nature turning previously dead looking branches into brilliant displays of colorful flowers. Perhaps in previous years, we’ve been too busy to notice the transformations around us that are nothing short of miracles. And yet, this year, they hold new meaning.
Perhaps taking a cue from mother nature, the solemn outlook for the health of the nation as well as the dormant economy, are showing signs of life ahead.
The estimated numbers of US deaths from the coronavirus have been revised by the CDC and are now predicted to total 60,000. While this is obviously a tragic figure, it’s thankfully much lower than initially predicted. (As a means of comparison, during the 2017 season, there were approximately 80,000 deaths attributed to the flu that year).
Hopefully, this will encourage politicians to allow the economy to open back up again; but in the meantime, there are things each small business owner should know about programs designed to help them during this period of time when income has slowed or stopped for many.
Late in March, Trump announced the program being rolled out to address the immediate needs of individuals and businesses through the economic shutdown: “The Coronavirus Aid, Relief and Economic Securities Act,” or CARES.
While self-employed people or independent contractors normally aren’t eligible for unemployment, this $2 trillion stimulus package will change that. The new law means that unemployment insurance will be expanded to include self-employed workers and independent contractors, for
approximately another 3 months, and includes an additional $600 per week on top of state employment benefits.
The application for these benefits can be found on the unemployment web site for each state.
The CARES act also creates more than $350 billion in loans and grants to small businesses that have been affected by the pandemic.
Perhaps the most widely publicized part of the government package is the promise of a payment of $1200 to most taxpayers, along with an additional $500 for each dependent. Anyone earning more than $75,000 per year will receive less; and those who earn more than $99,000 will not be eligible to receive a check. For married couples who file a joint return, they will receive $2400.
Even those who are retired, didn’t file taxes in the past two years, or have disabilities, they will still be eligible to receive a check.
Most people will not need to take action to receive the money. If you received your tax refund directly into your bank account, then the IRS has your account information, and the checks should start going out next week.
Many small businesses have been hit particularly hard during this crisis, and the CARES act outlines measures that will be taken to help businesses with fewer than 500 employees.
The paycheck protection program is that most significant: it provides potentially forgivable loans to small business owners so they can continue to pay their employees, pay utilities or rent, or pay down debt.
The loan amount will be calculated based on the business’ monthly revenue, with no loan greater than $10 million.
Whether the loan is forgivable depends largely on whether the business lays off any employees.
If a small business keeps all their employees (retaining the same number they had in mid February at the same wages), for at least 8 weeks after receiving the loan, then it is forgivable. However, if workers are laid off, then the loan is only partially forgivable.
Businesses have to apply for these loans through local lenders, and eligibility criteria will be eased. Small businesses will not have to provide a personal guarantee or collateral, for example.
It will be critical for business owners to keep very detailed records so they’ll be able to qualify for forgiveness.
The small business association will oversee the distribution of funds relating to the CARES program.
In Florida, the web site is: Floridasbcd which is an acronym for small business disaster cares.
By taking advantage of these programs, hopefully your small business will stay afloat and go on to thrive after this crisis passes.