Throughout 2020 there were multiple coronavirus relief packages approved by Congress to offer financial assistance to businesses. Here's a quick breakdown of some of those changes:

  • The SBA offered designated states and territories federal disaster loans with low interest rates to small businesses who have seen substantial economic harm as a result of the coronavirus pandemic.
  • These loans were allowed to be used by small businesses to pay fixed debts, payroll, accounts payable and additional bills that can’t be paid because of the impact of COVID-19. The interest rate offered was 3.75% for small businesses without other available means of credit while the interest rate for nonprofits was 2.75%.
  • The SBA loans came with long-term repayments, up to a maximum of 30 years, in an effort to keep payments affordable. Loan terms were determined on a case-by-case basis, according to an individual borrower’s ability to repay.
  • The SBA amended its disaster loan criteria to help borrowers still paying back SBA loans from previous disasters. By making this change, deferments through December 31, 2020, were to be automatic. Hence, borrowers of home and business disaster loans do not have to contact SBA to request deferment due to the pandemic.
    • Mandatory emergency paid sick leave for covered employees who, as a result of COVID-19, are quarantined, symptomatic or caring for a symptomatic individual, or caring for a child whose school has been closed. The law requires all private businesses with fewer than 500 employees to provide emergency paid sick or family leave for employees affected by the coronavirus pandemic.
    • An expansion of unemployment benefits.
    • Modifications to the USDA nutrition and food assistance programs.
    • New requirements for coronavirus diagnostic testing.
    • A temporary increase in the Medicaid federal medical assistance percentage (FMAP).
    • The law provides employers with fewer than 500 employees with refundable payroll tax credits to cover the cost of providing paid sick leave and paid FMLA leave to their employees. Specifically, the law states that:
    • Employers will receive a 100% tax credit against their payroll tax liability up to the capped amount of benefits they must pay.
    • Health insurance costs are also included in the credit.
    • Self-employed individuals receive an equivalent credit.
    • If an employer is owed more than the capped amount and a refund is owed, the IRS will send the refund as quickly as possible.
    • Reimbursement will be quick and easy to obtain.
      • Paycheck Protection Program (PPP): This lending program allows businesses to borrow money to cover monthly payroll costs for businesses for up to 2.5 months. If used for payroll, mortgage interest or other qualified expenses, these PPP loans can be forgiven as long as the employer continues to employ or rehire workers and follow other criteria.
      • Business tax provisions: Employers can defer payment of the employer share payroll taxes.
      • Unemployment assistance: If your business was closed because of coronavirus and employees could not work from home, or your employees are unable to work due to illness or the need to take care of someone who is ill with the virus, they can collect unemployment.
      • Payments for individuals: Those who make less than $75,000 a year received direct payments of $1,200 per individual ($2,400 joint return) plus $500 per child.

      Though these are but some of the changes, we think they are important ones to have a basic grasp of. If you have any questions or would like more information, please reach out to me via email at [email protected] and I will get back to you as soon as possible! Thanks for stopping in to read and I can't wait to connect with you!