Idea Helps – Small Business Relief

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Last updated on 4/3/2020 with:

As our nation comes to terms with the consequences of COVID-19, we at Idea Financial hold true to our values and to our belief that there is a symbiosis that connects us all. Therefore, we will not only work together with our clients, partners and employees, but also try to provide relevant information to help everyone navigate through these trying times. Below you will find information about business and employee relief efforts, which we hope alleviates the adverse effects of COVID-19 and its implications for all.

Over the coming days we will be updating the information below, as well as featuring, in our social media channels and blog, how fellow business owners are adapting to this situation.

For customer assistance contact us at (855) 900-7838 or email help@ideafinancial.com.

National Relief for Businesses

In order to slow the spread of coronavirus, many states opted to cancel school, gatherings and events of all sizes. Small businesses and individuals have followed suit, creating an absenteeism that increases financial strains.  President Trump has instructed the Small Business Administration to extend relief loans to help small businesses overcome temporary economic disruptions. A national emergency was declared in order to infuse another $50 billion into the economy and help affected businesses.  More relief efforts are on the table and/or pending legislative and executive approval. Some of these efforts include the following, check back for more updates daily:

SBA

SBA economic loans for businesses statewide will provide working capital loans of up to $2 million under the Economic Injury Disaster Loans (EIDL) program. If your business is suffering a drop in sales, lack enough funds to cover business expenses like payroll, fixed debts or accounts payable, this an option that can help your business keep afloat.

CARES Act

The Senate passed a $2 trillion aid package to address the COVID-19 situation. Notable provisions include a $1,200 check for most Americans, higher unemployment insurance payouts, and the “Paycheck Protection Program”, which allocates up to $10 million per small business to cover payroll, rent and utilities.

Tax payment deferrals

Income tax payment deferment is another financial relief benefit for both businesses and individuals. Sole proprietors, single-member LLCs and Corporations have their business tax return deadline on April 15. The Treasury Department and IRS extended such deadline for businesses negatively impacted by the Coronavirus, penalty free, for 90 days. For more info, visit the IRS Coronavirus Tax Relief page.

Payroll tax credits

Payroll tax credits are on the legislative table. As a bill proposing federally mandated paid sick leave and benefits passed in the House and is now in the Senate; it would require employers to provide paid sick leave to eligible employees for 14 days. To counter this financial strain on small businesses, the House approved a business tax credit for the same amount incurred during this time.

Employees

As Coronavirus affects more businesses, it affects the employees who make up those businesses. The federal government has also prepared legislation to relieve employees during this difficult time. Find information in the following links:

Center for Disease Control

As we all learn what are our options to cope during these difficult times, it is important to have in mind that our individual actions affect everything around us too. We would like to promote information from the professionals at the forefront of this pandemic and share the following link to the Center for Disease Control and Prevention: CDC

Ask not for a lighter burden, but for broader shoulders.

FAQ’s

As the procedures, requirements and new information is not widely available, we are answering some pertinent questions with regards to the whole EIDL process, information for other funding options and suggestions on how to cope with the consequences of COVID-19.

Who is eligible for Economic Injury Disaster Loans?

Only small businesses that are in counties approved by the SBA and that are considered impacted by the Coronavirus are offered the potential relief. First thing small business owners should do is go to the local county website or contact your county officials with regards to the status of the Economic Loss Declaration. Once the SBA has approved and declared it an affected county, then economic injury assistance will become available. Once available, try to apply a soon as possible as SBA staff will most likely be dealing with a surge in applications.

To be eligible, a business must meet the definition of “small,” which depends on the industry the business is in.

For example:

  1. Wholesale trade: Maximum number of employees must range between 100 and 250.
  2. Real Estate offices agents and brokers: Maximum $8.0 million dollars in annual receipts.
  3. Full-service restaurant: Maximum $8.0 million dollars in annual receipts.

For the complete table, visit the SBA website, call the SBA at 1-800-659-2955 or see this PDF here: Table of Small Business Size Standards

Where can I apply for an EIDL??

Apply online here. It will require the creation of an online account with which you can track the status of your application.

What amount of capital will be available for assisting a small business?

The maximum loan amount offered in the current program is $2 million. You may apply for an EIDL for the amount of the economic injury and operating needs of the business, but the amount must not exceed what your business could have earned, had the disaster not occurred.

Are non-profit organizations eligible for EIDL?

Yes, non-profit organizations may apply for EIDL.

What may funds be used for?

Fixed debts, payroll, accounts payable and other bills that can’t be paid as a result of the disaster’s impact.

What are the interest rates and repayment terms?

The interest rates start at 3.75% for small businesses and 2.75 for non-profits.

What are the credit requirements to apply for an EIDL?

The business must have a credit history that is acceptable to the SBA. The business must prove to have the ability to repay all loans. In many cases, collateral is required, but SBA will not decline a loan for lack of collateral, but it may require a pledge. SBA may review financial statements of partners, officers, directors and stockholders. There may be a guarantee required as well.

Are there other organizations that are offering relief to small business due to the Coronavirus pandemic?

Yes, there are different organizations and companies at the national, state and even county and city level.

One option is to contact your local chamber of commerce as they have business that may be affected by the pandemic. You may need to become a member to have access to their services. Find your local chamber: Chamber of Commerce Directory and also the Coronavirus Small Business Guide from the Chamber.

Here are some links to local and corporate relief programs:

These are just some initiatives taken by local governments. Each individual state will most likely create their own plan to specifically address the situation based on their needs. A list of all the state governors websites links can be can be found here.

Other relief sources

General

Service industry

Inormative Links:

The Idea Financial team will keep updating and adding information as it becomes available. Please contact the SBA if you have further questions with regards to the Economic Injury Disaster Loans program through their page here.

Ask not for an easier path, but for stronger feet.