COVID-19 Resources & Information
Great news! The SBA has released new guidance on implementation of the new PPP Flexibility Act of 2020. The new interim final rule, new application (including one for EZ) and instructions can be found at the following website. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
Please be sure to contact us with your questions!
Current programs: The SBA is currently accepting new applications for the Paycheck Protection Program (PPP), the Economic Injury Disaster Loan Advance (EIDL) and SBA Express Bridge Loans. They also have some additional SBA Debt Relief programs. Click here to learn more.
The CARES Act provides small businesses (fewer than 500 employees) and 501(c) 3 nonprofits loan programs and payroll tax holidays. You need to speak to your attorney because electing some parts of the CARE Act could render you ineligible for SBA loans. Additionally, you cannot use Families First credits, EIDL and PPP loan funds for the same expense. In other words; no double dipping.
There have been recent changes to the rules for forgiveness and additional guidance on owner compensation. You must continue to monitor the SBA’s website for new information frequently if you have a PPP loan.
Economic Injury Disaster loans (EIDL) Advance: There is an option for an emergency advance up to $10,000 that you don’t have to repay. While you don’t have to repay the EIDL advance, it will reduce your PPP forgiveness.
SBA Express Bridge Loans: If you have an urgent need for cash while waiting on a disbursement for an EIDL you may qualify for a bridge loan. It will be repaid in full or in part by proceeds from the EIDL when you get it.
SBA Debt Relief: The Act also allows for grants of six months of existing SBA loan payments.
Paycheck Protection Program (PPP). You must apply through a SBA 7(a) lender. Please contact your bank to apply.
- Forgiveness of the loan
- There were changes to forgiveness rules after the Paycheck Protection Program Flexibility Act of 2020 became law on June 5, 2020. The final text of the Act will be published on Congress.Gov. Check back to read the final text.
- The SBA released the loan forgiveness application and instructions that must be filed with your bank!
- Great news! There is an EZ form with instructions for those who are a sole proprietor with no employees or for those businesses who didn’t reduce employees (exceptions apply) or their employee’s pay by more than 25%.
- You must apply for forgiveness within 10 months after the last day of the covered period.
- Unforgiven portions will be at a rate of 1% and the maturity was changed to 5 years. If you received your loan before June 5th the 2 year maturity remains in effect, unless the borrower and lender mutually agree to extend to the 5 years.
- You must use all the funds during the covered period which was increased from 8 weeks to 24 weeks by the PPP Flexibility Act. It begins on the day you received PPP funding. If your loan was received before June 5th you can elect to use the 8 week covered period.
- You must use the loan for acceptable uses which include: Payroll costs, health care benefits, business mortgage interest payments, rent and utilities. Mortgage, rent and utility agreements must be in force prior to February 15, 2020. You can also refinancing an SBA EIDL loan made between January 31, 2020 and April 3, 2020.
- If you elect to use the 8 week covered period; for each employee, compensation paid eligible for forgiveness cannot exceed $15,385 ($100,000 X 8/52).
- If you elect to use the 24 week covered period; for each employee, compensation paid eligible for forgiveness cannot exceed $46,154 ($100,000 X 24/52).
- There are recent changes to owner compensation and how much qualifies as payroll costs!
- Health insurance costs for self-employed individual, general partners or S-Corporation owners cannot be included in payroll costs.
- Employer contributions for self-employed individual or general partners cannot be included in payroll costs.
- Owner compensation across all business types is limited to $15,385 if you elect the 8 week covered period.
- Owner compensation across all business types is limited to $20,833 if you elect the 24 week covered period.
This sheet is not meant to be all inclusive. You should seek legal advice for a complete analysis of your eligibility and opportunities for federal assistance and benefits under the new legislation.
Employment Law Attorneys
Bone McAllester Norton, PLLC
511 Union Street, Suite 1600
Nashville, TN 37219
Gaylord Gardner, Attorney
Lodestone Legal Group
256 Seaboard Lane, Suite G-103
Franklin, TN 37067
Chuck Mataya, Partner
1600 Division Street, Suite 700
Nashville, TN 37203
Michael Goode, Attorney
Lewis, Thomason, King, Krieg &Waldrop, P.C.
424 Church Street, Suite 2500
Nashville, TN 37219
615-259-1366 office 404-680-6295 cell
615-259-1389 fax email@example.com
Families First Coronavirus Response Act
If you have employees who are sick with COVID-19, caring for someone who is sick or is unable to work due to their child’s school being closed due to COVID-19, you could be eligible for a payroll tax credit for two weeks of emergency paid sick leave and ten weeks of paid family medical leave. Depending on your situation, you may be entitled to a tax credit of between 2/3rd and 100% of qualifying employee wages. Please contact your attorney or feel free to call one of the above attorneys to find out if your employees qualify.
Coronavirus Aid, Relief and the Economic Security Act (the CARES Act)
For individuals, there will be one time stimulus checks, expanded unemployment benefits and temporary changes to the rules for retirement account disbursements and HSA uses.