• Federal Updates

    Federal Aid and News regarding COVID-19


    On April 9, 2020, the Federal Reserve announced details of its Main Street Business Lending Program. The Fed said it will offer four-year loans to companies with 500 to 10,000 workers and less than $25 billion in revenue. The Main Street loans would be a minimum of $1 million and a maximum of either $25 million or an amount that when added to the Eligible Borrower’s existing outstanding and committed but undrawn debt, does not exceed four times the Eligible Borrower’s 2019 earnings before interest, taxes, depreciation, and amortization, whichever is less. Terms would see an interest rate equal to the Fed’s Secure Overnight Financing Rate, currently 0.01%, plus 250-400 basis points with a four-year maturity. Click Here
    The CARES Act provides immediate relief to small businesses with existing SBA loans that were borrowed prior to the COVID-19 pandemic. Under this program, the SBA will cover all loan payments on these loans—including principal, interest and fees—for six months. This program will provide immediate relief to small businesses with existing SBA loans made prior to March 27, 2020. If you are seeking a subsidy for an existing loan, you should contact your existing lender. (Reference Page 6 in the following link) Click Here

    The IRS Employee Retention Credit is designed to encourage businesses to keep employees on their payroll. The refundable tax credit is 50% of up to $10,000 in wages paid by an eligible employer, whose business has been financially impacted by COVID-19. The credit is available to all employers, regardless of size. An exception is a small business that takes a small business loan.

    For an FED that is an essential business, the gross receipts must be below 50% of the comparable quarter in 2019. Once the employer's gross receipts go above 80% of a comparable quarter in 2019, the business will no longer qualify after the end of that quarter.

    The U.S. Department of Labor (DOL) developed guidance for states regarding Unemployment Insurance and the relevant provisions of the CARES Act. The DOL web page is intended to provide guidance on the administration of, and eligibility criteria for, state unemployment insurance programs. Click Here

    President Trump issued a nationwide emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, thereby opening up the opportunity for employers to provide tax-free assistance to employees under Section 139 of the Internal Revenue Code.

    Section 139 provides that qualified disaster relief payments, from any source reimbursing or paying an individual for certain expenses in connection with a qualified disaster, are not subject to income or employment taxes (Social Security, Medicare, and federal unemployment taxes). Possible expenses could include medical expenses that are not covered by insurance (co-pays, deductibles, over-the-counter medicines), child care, tutoring services, and expenses incurred to allow the employee to work from home (personal computer, printer, supplies, internet service), caregiver services, and others.

    The Paycheck Protection Program (PPP) is designed to provide loans for small businesses to keep you in business and your workers on the payroll. You can apply for a loan through any existing SBA 7(a) lender or through any federally insured depository institution, any federally insured credit union, and any Farm Credit System institution (that is participating). You should consult with your local lender to see if they are participating. PPP will be available through June 30, 2020. SBA will forgive loans, if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

    Federal News:

    • The White House has issued guidelines for opening up America again. Read about the phased opening of businesses based on this guidance that should be applied in each state. Click Here 5/11/20
    • White House officials are finalizing expanded guidelines to allow the phased reopening of child care programs, schools and day camps, communities of faith, employers with vulnerable workers, restaurants and bars, and mass transit administrators. Click Here 5/11/20
    • SBA Lending Product Comparison Chart Click Here 4/22/20
    • US Small Business Administration (SBA) Comprehensive Small Business Guidance and Loan Resources during COVID-19 Crisis Click Here 4/6/20
    • CARES Act Summary of Loans and Benefits within COVID-19 Stimulus Package for Small and Medium Size Businesses Click Here 4/6/20
    • EY CARES Act Provisions Click Here 4/2/20
    • EY How does relief money get to targeted recipients? Click Here 4/2/20
    • US Chamber of Commerce Small Business Guide Click Here 4/2/20
    • US EPA Letter to Governors advocating water/wastewater workers and manufacturers are Essential Workers Click Here 4/1/20
    • President Trump signs the Coronavirus Aid Relief and Economic Security Act of 2020 Click Here 3/30/20
    • Department of Homeland Security guidance memorandum, dated March 28, 2020 Click Here 3/30/20
    • FEMA Tracks Legislation summaries and links to COVID-19 legislation Click Here 3/30/20
    • FEMA Letter to State Fire Marshals advocating the inclusion of Fire and Life Safety companies as essential businesses Click Here 3/20/20
    • Department of Defense lays out what services will qualify as critical infrastructure Click Here 3/20/20
    • Department of Homeland Security identifies essential critical infrastructure workers Click Here 3/19/20
    • US Fire Administration - Information for First Responders on Maintaining Operational Capabilities During a Pandemic Click Here 3/19/20