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The Small Business Owner’s Guide to the CARES Act
The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain nonprofits and other employers.
This guide provides information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA. To keep up to date on when these programs become available, please stay in contact with your local Small Business Administration (SBA) District Office, which you can locate here.
Struggling to get started? The following questions might help point you in the right direction. Do you need:
• Capital to cover the cost of retaining employees? Then the Paycheck Protection Program might be right for you.
• A quick infusion of a smaller amount of cash to cover you right now? You might want to look into an Emergency Economic Injury Grant.
• To ease your fears about keeping up with payments on your current or potential SBA loan? The Small Business Debt Relief Program could help.
• Just some quality, free counseling to help you navigate this uncertain economic time? The resource partners might be your best bet.
View the full guide here: Small Business Owner's Guide to the CARES Act
Payment Protection Program (PPP) Information:
As of May 8, 2020, over 21,500 Montana small businesses have been approved for PPP loans for over $1.7 billion. ( There is still over $100 billion available).
The Details – What is the PPP?
Below are links to the SBA and Treasury websites with detailed PPP guidance/forms/etc.
The Paycheck Protection Program (“PPP”) authorizes up to $349 billion in forgivable loans to small businesses to pay their employees during the COVID-19 crisis. All loan terms will be the same for everyone.
The loan amounts will be forgiven as long as:
The loan proceeds are used to cover payroll costs, and most mortgage interest, rent, and utility costs over the 8 week period after the loan is made; and
Employee and compensation levels are maintained.
Payroll costs are capped at $100,000 on an annualized basis for each employee. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
Loan payments will be deferred for 6 months.
When can I apply?
Starting April 3, 2020, small businesses and sole proprietorships can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
Starting April 10, 2020, independent contractors and self-employed individuals can apply for and receive loans to cover their payroll and other certain expenses through existing SBA lenders.
Other regulated lenders will be available to make these loans as soon as they are approved and enrolled in the program.
Where can I apply?
You can apply through any existing SBA lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating.
Visit www.sba.gov for a list of SBA lenders.
Who can apply?
All businesses – including nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, self-employed individuals, and independent contractors – with 500 or fewer employees can apply. Businesses in certain industries can have more than 500 employees if they meet applicable SBA employee-based size standards for those industries (click HERE for additional detail). For this program, the SBA’s affiliation standards are waived for small businesses (1) in the hotel and food services industries (click HERE for NAICS code 72 to confirm); or (2) that are franchises in the SBA’s Franchise Directory (click HERE to check); or (3) that receive financial assistance from small business investment companies licensed by the SBA. Additional guidance may be released as appropriate.
What do I need to apply?
You will need to complete the Paycheck Protection Program loan application and submit the application with the required documentation to an approved lender that is available to process your application by June 30, 2020.
What other documents will I need to include in my application?
You will need to provide your lender with payroll documentation.
Do I need to first look for other funds before applying to this program?
No. We are waiving the usual SBA requirement that you try to obtain some or all of the loan funds from other sources (i.e., we are waiving the Credit Elsewhere requirement).
How long will this program last?
Although the program is open until June 30, 2020, we encourage you to apply as quickly as you can because there is a funding cap and lenders need time to process your loan.
How many loans can I take out under this program?
What can I use these loans for?
You should use the proceeds from these loans on your:
Payroll costs, including benefits;
Interest on mortgage obligations, incurred before February 15, 2020;
Rent, under lease agreements in force before February 15, 2020; and
Utilities, for which service began before February 15, 2020.
What counts as payroll costs?
Payroll costs include:
Salary, wages, commissions, or tips (capped at $100,000 on an annualized basis for each employee);
Employee benefits including costs for vacation, parental, family, medical, or sick leave; allowance for separation or dismissal; payments required for the provisions of group health care benefits including insurance premiums; and payment of any retirement benefit;
State and local taxes assessed on compensation; and
For a sole proprietor or independent contractor: wages, commissions, income, or net earnings from self-employment, capped at $100,000 on an annualized basis for each employee.
Does the PPP cover paid sick leave?
Yes, the PPP covers payroll costs, which include employee benefits such as costs for parental, family, medical, or sick leave. However, it is worth noting that the CARES Act expressly excludes qualified sick and family leave wages for which a credit is allowed under sections 7001 and 7003 of the Families First Coronavirus Response Act (FFCRA) (Public Law 116–127). Learn more about the FFCRA’s Paid Sick Leave Refundable Credit online.
How large can my loan be?
Loans can be for up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount. That amount is subject to a $10 million cap. If you are a seasonal or new business, you will use different applicable time periods for your calculation. Payroll costs will be capped at $100,000 annualized for each employee.
How much of my loan will be forgiven?
You will owe money when your loan is due if you use the loan amount for anything other than payroll costs, mortgage interest, rent, and utilities payments over the 8 weeks after getting the loan. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs. You will also owe money if you do not maintain your staff and payroll.
Number of Staff: Your loan forgiveness will be reduced if you decrease your full-time employee headcount.
Level of Payroll: Your loan forgiveness will also be reduced if you decrease salaries and wages by more than 25% for any employee that made less than $100,000 annualized in 2019.
Re-Hiring: You have until June 30, 2020 to restore your full-time employment and salary levels for any changes made between February 15, 2020 and April 26, 2020.
How can I request loan forgiveness?
You can submit a request to the lender that is servicing the loan. The request will include documents that verify the number of full-time equivalent employees and pay rates, as well as the payments on eligible mortgage, lease, and utility obligations. You must certify that the documents are true and that you used the forgiveness amount to keep employees and make eligible mortgage interest, rent, and utility payments. The lender must make a decision on the forgiveness within 60 days.
What is my interest rate?
1.00% fixed rate.
When do I need to start paying interest on my loan?
All payments are deferred for 6 months; however, interest will continue to accrue over this period.
When is my loan due?
In 2 years.
Can I pay my loan earlier than 2 years?
Yes. There are no prepayment penalties or fees.
No. No collateral is required.
Do I need to personally guarantee this loan?
No. There is no personal guarantee requirement. ***However, if the proceeds are used for fraudulent purposes, the U.S. government will pursue criminal charges against you.***
What do I need to certify?
As part of your application, you need to certify in good faith that:
Current economic uncertainty makes the loan necessary to support your ongoing operations. · The funds will be used to retain workers and maintain payroll or to make mortgage, lease, and utility payments.
You have not and will not receive another loan under this program.
You will provide to the lender documentation that verifies the number of full-time equivalent employees on payroll and the dollar amounts of payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities for the eight weeks after getting this loan.
Loan forgiveness will be provided for the sum of documented payroll costs, covered mortgage interest payments, covered rent payments, and covered utilities. Due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
All the information you provided in your application and in all supporting documents and forms is true and accurate. Knowingly making a false statement to get a loan under this program is punishable by law.
You acknowledge that the lender will calculate the eligible loan amount using the tax documents you submitted. You affirm that the tax documents are identical to those you submitted to the IRS. And you also understand, acknowledge, and agree that the lender can share the tax information with the SBA’s authorized representatives, including authorized representatives of the SBA Office of Inspector General, for the purpose of compliance with SBA Loan Program Requirements and all SBA reviews.
Questions – If you wish to apply for the PPP and/or have questions on the PPP program, we encourage you to contact your lender. Additionally, you are welcome to contact the Montana District Office staff at 406-441-1081.
PPP Loan Forgiveness Application
The Small Business Administration (SBA), in consultation with the Department of the Treasury, released the Paycheck Protection Program (PPP) Loan Forgiveness Application and detailed instructions for the application.
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles
Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan
Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness
Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30
Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that were declined
The PPP was created by the CARES Act to provide forgivable loans to eligible small businesses to keep American workers on the payroll during the COVID-19 pandemic. The documents released today will help small businesses seek forgiveness at the conclusion of the eight week covered period, which begins with the disbursement of their loans.
Click here to view the application and instructions.
Emergency Housing Program -
The Montana Emergency Rental Assistance program is now available for Montanans who have lost household income as a direct or indirect result of the COVID-19 pandemic and are at risk of housing instability.
Renters can receive a monthly maximum of $2,200 for past due and future rent payments, up to $300 for past due and future utilities including gas and electric, and $50 per month for internet. Households can receive assistance for rent and utility bills dating back to April 1, 2020.
Click here for a step-by-step guide to creating an Okta account required for completing the application.
FedEx #SupportSmallGrants - Each grant recipient will receive $5,000, plus a $500 credit from FedEx Office that can be used for printing banners, posters, floor graphics, custom branded boxes, and more. Applications begin May 25th.*
Salesforce - Salesforce will be offering Salesforce Care Small Business Grants of $10,000 to provide capital to help keep businesses afloat. These grants will support small businesses as they work to replenish materials, pay salaries, or adapt their business model to overcome these challenging times.
Verizon - An investment of $2.5 million from Verizon is making it possible for LISC to begin offering critical relief and resiliency-building support to small businesses facing immediate financial threat because of the Covid-19 pandemic. The funding will go to make grants of up to $10,000, especially to entrepreneurs of color, women-owned businesses and other enterprises in historically under-served places who don’t have access to flexible, affordable capital.
US Chamber of Commerce Foundation - Funded by corporate and philanthropic partners, the Save Small Business Fund is a collective effort to provide $5,000 grants to as many small employers as we can. We hope these supplemental funds will help you get through the next days and weeks.
Growth Through Ag - All projects will need to demonstrate how they expand Montana agriculture, but given the current public health situation with COVID-19, special attention will be paid to projects that strengthen and expand local food offerings, distribution, and infrastructure.
Northwestern Energy - Through shareholders dollars, the Company is providing resources in the form of $250 bill credits to a limited number of our locally-owned, stand-alone small business customers.
Grant recipients must be a NorthWestern customer that was impacted by the state and local closure directives related to COVID-19. They also must have contacted NorthWestern to discuss management of their utility bill.
Thryv Foundation - To help businesses through the economic impacts of the COVID-19 pandemic, the Thryv Foundation will provide grants through its 2020 Small Business COVID-19 Program. Small- and medium-sized businesses can apply today.
Music COVID Relief - The information for the Relief and Grants section of MusicCovidRelief.com was compiled by the U.S. Music Community to help music professionals learn about organizations providing relief and potential grants from the National Endowment for the Arts.
James Beard Foundation - The James Beard Foundation Food and Beverage Industry Relief Fund application is now open. The application period will run through 3 P.M. ET on April 3, 2020. Please review the criteria and frequently asked questions before submitting an application.
Facebook - Facebook is offering $100M in cash grants and ad credits for up to 30,000 eligible small businesses in over 30 countries where we operate. We’ll share more details as they become available.
JPMorgan – pledged $50 million global philanthropic commitment to support communities and people hit hardest by this public health crisis, including $2 million to existing nonprofit partners and $8 million to assist small businesses.
MainVest – a crowdfunding platform, announced its new Main Street Initiative: a $2,000, zero-interest, 120 day loan for restaurants or other brick and mortars affected by the shutdown.
Opportunity Fund – which specializes in money lending to small businesses owned by women, immigrants and people of color, is collaborating with investors and nonprofits to put together a coronavirus relief fund that will provide grants and low-interest rate loans.
Golden Rule Charity – To qualify for a grant, you must be employed in a restaurant/hospitality establishment for 6 months. You must apply no later than 6 months after onset of need. Grants will only be awarded to applicants who currently (or at the time of injury or illness) work at least part-time.
Red Backpack Fund - The Red Backpack Fund, an initiative of The Spanx by Sara Blakely Foundation managed by GlobalGiving, will make at least 1,000 grants of $5,000 each to female entrepreneurs in the U.S. to help alleviate the immediate needs and support the long-term recovery of those impacted by this crisis. Eligible applicants include majority women-owned businesses and nonprofits with annual revenues less than $5M, at least one additional paid employee, and fewer than 50 individuals on staff.
Freelancers Union - Freelancers Relief Fund will offer financial assistance of up to $1,000 per freelance household to cover lost income and essential expenses not covered by government relief programs, including: Food/food supplies, Utility payments, and Cash assistance to cover income loss. 100% of all donations will be distributed directly to freelancers in need.
Go Fund Me – The Go Fund Me Relief Initiative is intended to support our local businesses facing financial loss. Make a difference today by donating or starting a fundraiser.
Additionally, a list of other resources to help individuals and small businesses:
Northwestern Energy - NorthWestern Energy voluntarily suspended service disconnections for non-payment, effective immediately, to help customers who may be financially impacted as the result of this outbreak. This suspension will apply primarily to residential customers and will remain in effect until further notice. You are encouraged to contact us if you are having trouble paying your bill.
Montana Housing - At Montana Housing, within the Department of Commerce, we are closely monitoring the impacts of COVID-19. We will communicate with statewide housing partners any relevant information about COVID-19 and how it affects affordable homes in Montana.
USDA - U.S. Secretary of Agriculture Sonny Perdue today announced new contacts to encourage communication with USDA to help feed kids and ensure the United States food supply chain remains strong in response to the COVID-19 outbreak.
MT Dept. of Commerce - Please visit this one-stop-shop for business, community, and housing recovery resources to utilize during this crisis.
Bartender Emergency Fund - Be a Bartender or the spouse or child of a Bartender. The Bartender Emergency Assistance Program defines a “Bartender” as an individual employed in serving beverages or otherwise engaged in the production, promotion or distribution of alcoholic beverages.
Google - $340 million in Google Ads credits available to all SMBs with active accounts over the past year. Credit notifications will appear in their Google Ads accounts and can be used at any point until the end of 2020 across our advertising platforms. We hope it will help to alleviate some of the cost of staying in touch with their customers.
Verizon - Due to economic circumstances related to the coronavirus and to keep customers connected during this economic and global crisis; Verizon waives late fees for residential and small business customers impacted by COVID-19, offers free international calling to CDC level 3 countries.
American Express Financial Hardship — Amex is evaluating accounts on a case-by-case basis under its Financial Hardship Relief program to provide support for cardholders impacted by COVID-19. If approved, your interest rate may be lowered to rates as low as 0%, and you may receive a waiver on late and other account fees. Just note that if you accept the relief, your accounts may be frozen, and you won’t be able to use them until paid off. Your Membership Rewards balance will also be frozen, and the issuer may notify the credit bureaus that your account limits were lowered.
American Express Working Capital — Amex business cardholders can enroll with no credit check and get ongoing access to funds used for vendor payments between $500 and $150,000 with repayment terms of 30, 60 or 90 days. These charge a fixed fee between 0.6% and 5.25%.
Chase — You can call the number on the back of your card and ask to speak with an account representative about the possibility of relief from fees and interest. Multiple readers have reported success in having interest and late fees waived due to hardship related to COVID-19.
Internal Revenue Service (IRS) — The Treasury Department and IRS just announced a three-month delay for any tax payments owed up to $1 million. You’ll still need to file your returns by April 15, 2020 but will have until July 15 to pay. This will apply to individual tax returns but should also cover many pass-through entities and small businesses.
Resources & Guides
The Montana Business Adaptation Program - This program will provide reimbursement for COVID-19 expenses related to keeping staff and businesses safe – from the purchase of personal protective equipment to resources needed for staff to work remotely.
The Tourism Education Program- This program will make available $15 million in CARES Act funding to carry out a statewide informational campaign to educate visitors prior to and after arriving in Montana.
OSHA - A publication on Guidance on Preparing Workplaces for COVID-19
The Small Business Owner’s Guide to the CARES Act - The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now.
Open for Business Hub - The Open for Business Hub lists technology companies that are helping small businesses by enabling remote work throughout this period.
Find the list of offers here.
Family Resources - Need help sorting through all the information out there on COVID-19? Check the new Zero to Five Page on the website to help you navigate all
Avoid COVID-19 scams!
Scammers are using the Small Business Administration’s (SBA) name to con small businesses and individuals during the COVID-19 crisis through phone calls, emails, text messages and letters.
If you are contacted by someone claiming to be from the SBA, suspect fraud.
Emails from SBA or other legitimate government agencies will always end in .gov.
There is no cost to apply for a COVID-19 Economic Injury Disaster Loan and SBA will never ask you to provide a credit card.
Do not release any private information (social security number, date of birth, etc.) or banking information in response to an unsolicited caller, letter, email, or text.
If you are in the process of applying for an SBA loan and receive email correspondence asking for PII, ensure that the referenced application number is consistent with your application number.
An SBA logo on an email or webpage does not guarantee the information is accurate or from the SBA.
Check for spelling and grammatical errors in an email and be wary of clicking on any links or attachments.
For help with applying for an Economic Injury Disaster Loan, call 800-659-2955 or email email@example.com. You can also use a text telephone (TTY) by calling 1-800-877-8339.
For inquiries regarding support for small businesses, send an email to firstname.lastname@example.org
Visit [lnks.gd] the Small Business Cybersecurity site to learn more about small Business Cybersecurity tips, common threats, training, and best practices. https://www.sba.gov/business-guide/manage-your-business/small-business-cybersecurity [lnks.gd]
Visit [lnks.gd] the U.S. Department of Homeland Security’s Cyber Infrastructure site for small business resources. https://w.gov/publication/stopthinkconnect-small-business-resources [lnks.gd]
Trust your instincts! If something seems too good to be true, then it probably is too good to be true.