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Small Businesses

 
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Congress has passed a number of assistance programs aimed at supporting small business owners through these challenging times. More information can be found by visiting the Small Business Administration’s Coronavirus Relief site.
 

Paycheck Protection Program

The Paycheck Protection Program ended on 

May 31, 2021. Existing borrowers may be eligible for PPP loan forgiveness.

SBA also offers additional COVID-19 relief.

 

COVID-19 Economic Injury Disaster Loans

Loan details

In response to COVID-19, small business owners, including agricultural businesses, and nonprofit organizations in all U.S. states, Washington D.C., and territories can apply for the COVID-19 Economic Injury Disaster Loan (EIDL).

PURPOSE

To meet financial obligations and operating expenses that could have been met had the disaster not occurred

LOAN AMOUNT

For loans approved starting the week of April 6, 2021: 24-months of economic injury with a maximum loan amount of $500,000.

For loans approved prior to the week of April 6, 2021, seeloan increases.

TERMS

  • 3.75% for businesses (fixed)
  • 2.75% for nonprofits (fixed)
  • 30 years
  • No pre-payment penalty or fees

USE OF PROCEEDS

Working capital andnormal operating expenses

Example:continuation of health care benefits, rent, utilities, fixed debt payments.

COLLATERAL REQUIREMENTS

  • Required for loans over $25,000
  • SBA uses a general security agreement (UCC) designating business assets as collateral, such asmachinery and equipment, furniture and fixtures, etc.

FORGIVABLE

  • NO – EIDL Loan
  • YES – EIDL Advance*

*Advance funds have been fully allocated and are not currently available

MATURITY

30 years

PAYMENTS

Borrower may make payments if they choose to do so.

Set up online payments throughPay.govORmail payments to:

U.S. Small Business Administration
721 19th Street
Denver, CO 80202

Be sure to include EIDL loan number on mailed-in checks.

Loan eligibility

Small business owners and qualified agricultural businesses in all U.S. states and territories are currently eligible to apply for a low-interest loan due to COVID-19.

Agricultural businesses with 500 or fewer employees are now eligible as a result of new authority granted by Congress in response to the pandemic.

Agricultural businesses include those businesses engaged in the production of food and fiber, ranching, raising of livestock, aquaculture, and all other farming and agricultural related industries (as defined by section 18(b) of the Small Business Act (15 U.S.C. 647(b)).

Supplemental Materials

Loan increases

Loans approved prior to April 7, 2021 for less than $500,000 are likely eligible for an increase based on new loan maximum amounts announced March 24, 2021. Businesses that received a loan subject to the previous loan limit can submit a request for an increase at this time. SBA is now reaching out directly to loan borrowers via email to provide more details about how businesses can request an increase. Borrowers should expect to receive emails from @sba.gov or @updates.sba.gov addresses. *

(* Borrowers who experience problems sending email using the link in the message they received must be sure to remove any additional characters that may appear in front of the email address.)

If an applicant accepted a loan for less than the full amount originally offered, the applicant will have up to two years after the date of the loan promissory note to request additional funds. Applicants may continue to request additional funds even after the application deadline of December 31, 2021.

COVID-19 EIDL Loan Application

Targeted EIDL Advance

The COVID-19 Targeted EIDL Advance was signed into law on December 27, 2020, as part of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. The Targeted EIDL Advance provides businesses in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency.

Advance funds of up to $10,000 will be available to applicants in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but received no funds due to lack of available program funding.

Applicants do not need to take any action.
SBA is reaching out to those who qualify.

SBA first reached out to EIDL applicants who already received a partial EIDL Advance (between $1,000 - $9,000). Applicants are being contacted directly by SBA via email with instructions to determine eligibility and submit documentation. 

All communication from SBA will be sent from an official government email account ending with @sba.gov. Please do not send sensitive information via email to any address that does not end with @sba.gov.

Applicants may qualify if they:

  • Are in a low-income community. To help applicants determine if they are in a low-income community as defined in section 45D(e) of the Internal Revenue Code, a mapping tool is available at https://sbaeidl.policymap.com/app. The business address must be in a low-income community to qualify so SBA encourages potential applicants to check the map to see if they meet the low-income community eligibility requirement before they apply; and
  • Can demonstrate more than 30% reduction in revenue during an eight-week period beginning on March 2, 2020, or later. If an applicant meets the low-income community criteria, they will be asked to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) to confirm the 30% reduction. 

Next, SBA is reaching out to those who applied for EIDL assistance on or before December 27, 2020, but did not receive an EIDL Advance due to lack of program funding. These applicants will receive an email from SBA with instructions to determine eligibility and submit documentation. Applicants may qualify for a Targeted EIDL Advance if they meet the low-income location and reduction-in-revenue criteria, and:

  • Have 300 or fewer employees. Business entities normally eligible for the EIDL program are eligible, including sole proprietors, independent contractors, and private, nonprofit organizations. Agricultural enterprises are not eligible. 

All applicants may be asked to provide an IRS Form 4506-T to allow SBA to request tax return information on the applicant's behalf.

Please do not submit duplicate COVID-19 EIDL applications. Only prior applicants will be considered for the Targeted EIDL Advance.

SBA will reach out if you qualify.

Supplemental materials

Supplemental Targeted Advance

The Supplemental Targeted Advance provides the smallest and hardest hit eligible businesses with a supplemental payment of $5,000 that does not have to be repaid. Even if you have previously received the original EIDL Advance in the full amount of $10,000, you may be eligible for the Supplemental Targeted Advance if you meet eligibility criteria. The combined amount of the Supplemental Targeted Advance ($5,000) with any previously received EIDL Advance or Targeted EIDL Advance ($10,000) will not exceed $15,000.

Completing the Targeted EIDL Advance application is a requirement to be considered for the Supplemental Targeted Advance, and SBA is reaching out directly to those who may qualify.

Before applying, make sure your small business meets all the following eligibility criteria:

  • Is located in a low-income community. Use this mapping tool to see if your business is in a low-income community as defined in section 45D(e) of the Internal Revenue Code. The business address must be in a low-income community to qualify, so SBA encourages you to check the map before you apply; and
  • Can prove more than a 50% economic loss during an eight-week period beginning on March 2, 2020, or later, compared to the same period of the previous year. Applicants need to provide gross monthly revenue (all forms of combined monthly earnings received, such as profits or salaries) from January 2019 to the current month-to-date; and
  • Has 10 or fewer employees. This includes sole proprietors, independent contractors, private nonprofit organizations, and others that usually qualify for the EIDL program. However, agricultural businesses, such as farmers and ranchers, are not eligible for the Supplemental Targeted Advance. Farmers and ranchers may still apply for loan assistance through the COVID-19 EIDL program.

All application decisions or requests for additional information will be sent from an official government email account ending with @sba.gov. Do not send sensitive information via email to any address that does not end with @sba.gov.

All application decisions will be communicated via email. If approved, you will receive an email notification and a direct ACH deposit to the bank account provided in your original application for the Targeted EIDL Advance.

Advance funds returned by banks

When a bank returns Targeted EIDL Advance or Supplemental Targeted Advance funds to SBA, the funds cannot be immediately re-disbursed. SBA is working to mitigate this issue. Additionally, we are providing the following information to help answer questions about returned funds:

  • My business was approved for a Targeted EIDL Advance (or Supplemental Targeted Advance) and I was informed that funds had been sent to my bank.  However, the money never showed up in my account and my bank says it returned the funds to SBA. Since you have determined my business is qualified, how can I get those funds?
    We are working on an update to our system that will enable us to re-disburse those funds as soon as possible.  If you have not already done so, please send an email with a photo ID front and back and a check with the word “VOID” written across it.  Please start the subject line of your email with your application number and send to: COVIDAdvanceBankReturns@sba.gov
  • Will I lose my place in line and have my funds given to another business?
    No. If the original disbursement was returned by the bank, be assured the funds were obligated for you and will remain available, even if the issue is not resolved immediately.
  • How long will I have to wait?
    We don’t have a specific time frame, but we are working diligently to resolve the issue quickly.
  • How will I know the matter has been resolved?
    Businesses awaiting re-disbursement will be notified when the funds are re-disbursed.
  • Why would the bank return the funds instead of putting them into my account?
    Some common reasons funds are returned is that the account is closed, the applicant provided an incorrect routing or account number, the name or EIN number on SBA’s deposit does not match the name or EIN number on the bank account, or the account is a personal account rather than a business account. You will need to contact your bank to learn the reason specific to your case.
  • What does SBA do when funds are returned to us?
    Our staff examines every case where funds are returned and contacts the applicant to request any additional information or documentation needed to overcome the reason for the return. Additional documentation includes but is not limited to a copy of the applicant’s photo identification and voided check for the correct account. Once we have the information needed to clear the issue, we take the necessary actions.

EIDL Advance (NO LONGER AVAILABLE)

EIDL Advance funds were originally calculated based on the number of employees on an applicant's COVID-19 EIDL application: $1,000/employee, up to a maximum of $10,000.

  • EIDL Advance does not have to be repaid.
  • Recipients did not have to be approved for an EIDL to receive the EIDL Advance.
  • The amount of the loan Advance was deducted from total loan eligibility.
  • Businesses who received an EIDL Advance in addition to the Paycheck Protection Program (PPP) loan will no longer have the amount of the EIDL Advance subtracted from the forgiveness amount of their PPP loan.

 

If you already applied for PPP loan forgiveness and had the amount of your EIDL Advance subtracted from the forgiveness amount, guidance has been published.

EIDL applications are still being processed, even though applications for the Advance are no longer available.

Please do not submit additional applications on the COVID-19 EIDL portal.

Existing borrowers

Existing borrowers can create an account in the SBA Capital Access Financial System (CAFS) to monitor their loan status. Get account enrollment instructions.

 

Disaster Home & Business Loans

Existing SBA disaster loans approved prior to 2020 in regular servicing status as of March 1, 2020, received an automatic deferment of principal and interest payments through December 31, 2020. This initial deferment period was subsequently extended through March 31, 2021. An additional 12-month deferment of principal and interest payments will be automatically granted to these borrowers. Borrowers will resume their regular payment schedule with the payment immediately preceding March 31, 2022, unless the borrower voluntarily continues to make payments while on deferment. It is important to note that the interest will continue to accrue on the outstanding balance of the loan throughout the duration of the deferment.

What does an “automatic deferral” mean to borrowers?

  • Interest will continue to accrue on the loan.
  • The automatic deferment will be reflected on the March 2021 monthly payment notice (SBA Form 1201);
  • Borrowers will not receive monthly payment notices (SBA Form 1201) during the deferment period;
  • Borrowers will be contacted via the SBA’s automated dialing system using the telephone number associated with the SBA loan approximately one month before the automatic deferment ends. This correspondence will serve as a reminder to borrowers of their upcoming Next Installment Due date in place of the monthly payment notice (SBA Form 1201);
  • Borrowers are strongly encouraged to create an account in SBA’s Capital Access Financial System (CAFS) to monitor their loan status. Get account enrollment instructions;
  • The deferment will not stop any established Preauthorized Debit (PAD) or recurring payment on the loan.  Borrowers with an SBA established PAD will have to contact their SBA servicing center to stop recurring payments during the deferment period. Borrowers that have established a PAD through Pay.Gov or any other bill pay service are responsible for terminating recurring payments during the deferment period;
  • Borrowers preferring to continue making regular payments during the deferment period may continue remitting payments during the deferment period. SBA will apply those payments normally as if there was no deferment;
  • After the automatic deferment period ends, borrowers will be required to resume making regular principal and interest payments.
  • For SBA disaster home and business loans covered under the previous Procedural Notices authorizing automatic deferments, borrowers will be required to resume making regular principal and interest payments after the automatic deferment period ends March 31, 2022;
  • For eligible SBA disaster home and business loans approved in 2020, borrowers will be required to resume making regular principal and interest payments 12-months from their Next Installment Due Date pursuant to the terms of the Loan Authorization; and
  • Upon request, SBA will evaluate borrower circumstances on a case-by-case basis to determine the nature and extent of further relief that may be appropriate for each situation.

If you have questions about your current loan and whether or not your loan is automatically deferred, please contact your loan servicing office directly using the following information:

  • Birmingham Disaster Loan Servicing Center:
    • Phone: 800-736-6048
    • Email: BirminghamDLSC@sba.gov
  • El Paso Disaster Loan Servicing Center:
    • Phone: 800-487-6019
    • Email: ElPasoDLSC@sba.gov

SBA Procedural Notice on additional deferments for existing and new SBA disaster loan borrowers

 

Paid Family & Sick Leave Tax Credit

The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through September 30, 2021.

Here are some basic facts about the employers eligible for the tax credits and how these employers may claim the credit for leave paid to employees who take leave to receive or recover from COVID-19 vaccinations.

Eligible Employers

An eligible employer is any business, including a tax-exempt organization, with fewer than 500 employees. An eligible employer also includes a governmental employer, other than the federal government and any agency or instrumentality of the federal government that is not an organization described in section 501(c)(1) of the Internal Revenue Code. Self-employed individuals are eligible for similar tax credits.

Paid sick and family leave for which tax credits can be claimed

Eligible employers are entitled to tax credits for wages paid for leave taken by employees who are not able to work or telework due to reasons related to COVID-19, including leave taken to receive COVID–19 vaccinations or to recover from any injury, disability, illness or condition related to the vaccinations. These tax credits are available for wages paid for leave from April 1, 2021, through September 30, 2021.

The amount of the tax credits and how they are calculated

The paid leave credits under the ARP are tax credits against the employer's share of the Medicare tax. The tax credits are refundable, which means that the employer is entitled to payment of the full amount of the credits if it exceeds the employer's share of the Medicare tax.

The tax credit for paid sick leave wages is equal to the sick leave wages paid for COVID-19 related reasons for up to two weeks (80 hours), limited to $511 per day and $5,110 in the aggregate, at 100 percent of the employee's regular rate of pay. The tax credit for paid family leave wages is equal to the family leave wages paid for up to twelve weeks, limited to $200 per day and $12,000 in the aggregate, at 2/3rds of the employee's regular rate of pay. The amount of these tax credits is increased by allocable health plan expenses and contributions for certain collectively bargained benefits, as well as the employer's share of social security and Medicare taxes paid on the wages (up to the respective daily and total caps).

Claiming the credit

Eligible employers may claim tax credits for sick and family leave paid to employees, including leave taken to receive or recover from COVID-19 vaccinations, for leave from April 1, 2021, through September 30, 2021.

Eligible employers report their total paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer's share of social security and Medicare taxes on the paid leave wages) for each quarter on their federal employment tax return, usually Form 941, Employer's Quarterly Federal Tax Return PDF. Form 941 is used by most employers to report income tax and social security and Medicare taxes withheld from employee wages, as well as the employer's own share of social security and Medicare taxes.

In anticipation of claiming the credits on the Form 941 PDF, eligible employers can keep the federal employment taxes that they otherwise would have deposited, including federal income tax withheld from employees, the employees' share of social security and Medicare taxes and the eligible employer's share of social security and Medicare taxes with respect to all employees up to the amount of credit for which they are eligible. The Form 941 instructions PDF explain how to reflect the reduced liabilities for the quarter related to the deposit schedule.

If an eligible employer does not have enough federal employment taxes set aside for deposit to cover amounts provided as paid sick and family leave wages (plus the eligible health plan expenses and collectively bargained contributions and the eligible employer's share of social security and Medicare taxes on the paid leave wages), the eligible employer may request an advance of the credits by filing Form 7200, Advance Payment of Employer Credits Due to COVID-19. The eligible employer will account for the amounts received as an advance when it files its Form 941, Employer's Quarterly Federal Tax Return, for the relevant quarter.

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