What are the Economic Injury Disaster Loans?
Governor Reeves’ request for a disaster declaration was granted on March 20. As a result, small business owners can apply for an Economic Injury Loan advance of up to $10,000. These working capital loans can be as large as $2 million. The loans may be used for any regular operational business expenses related to the loss of revenue from the Coronavirus pandemic, such as payroll, sick leave, inventory, production costs, rents or mortgages, etc.
Interest rates are 3.75% for small businesses and 2.75% for non-profits. Typically, this program requires a personal guarantee; but in these circumstances, that requirement has been modified or eliminated. Funds can be available within 3 days of a successful application and the advance does not have to be repaid. The loan application can be found here: Click Here
What is SBA 7(a) debt relief?
The Small Business Administration will help small businesses by providing debt relief through its 7(a) loan program. Under this program, SBA will pay the principal and interest on new 7(a) loans issued before September 27, 2020. SBA will also pay the principal and interest of current 7(a) loans for up to 6 months.
What is the SBA Express Bridge Loan Pilot Program?
This pilot program is for small businesses that currently have a business relationship with an SBA express lender. It streamlines the paperwork to provide quick access to loans of up to $25,000. The proceeds can be repaid in full or in part by the proceeds from an Economic Injury Disaster Loan. The program expires September 30, 2020.
How can my employees access the new paid leave benefits?
Through the Families First Coronavirus Response Act (FFCRA), employees can access paid sick leave or expanded family and medical leave for reasons related to Coronavirus. These provisions apply to those who work for certain public employers and private employers with fewer than 500 employees. There are exemptions for employers with fewer than 50 employees if the leave would jeopardize the viability of the business. The program starts on April 1 and applies through December 31, 2020.
All employees who work for these covered employers are eligible for 2 weeks (up to 80 hours) of paid sick leave if related to the Coronavirus. That is, if an employee is unable to work (or telework) and needs leave because of
- An isolation or quarantine order,
- A health care provider’s direction to quarantine,
- Coronavirus symptoms while awaiting a medical diagnosis
- A need to care for someone in quarantine,
- A need to care for a child whose school or child care is closed,
- Or another reason specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
In addition, employees who have been employed for at least 30 days are eligible for an additional 10 weeks of paid family leave to care for a child, again, related to the Coronavirus. You can read more about the leave provisions of the FFCRA on the Department of Labor website: Click Here
I am proud of the many businesses – large and small – that are working hard to find innovative ways to help their employees and their customers through this crisis. We will get through this together and emerge stronger than ever.