|The federal CARES Act was signed into law Friday. The Act invests over $2 trillion in funding for Covid-19 relief, including $4.9 billion in aid to Connecticut small businesses. This is a long update, as the Act contains many programs; please read the whole thing through, as there will undoubtedly be something in the list that can help you and your business. If you have any questions or need assistance applying for any of these programs, please reply to this email or call the Chamber at 860-688-5165. We're here to help!|
Click here for an exhaustive guide to the small business provisions of the CARES Act.
Direct Payments Begin Within 3 Weeks: The Act provides for direct cash payments to individuals of $1,200 per adult and $500 per child under 17. The rebates will be paid out as advance refunds (in the form of checks or direct deposit) based on your 2019 tax returns (or 2018, if a 2019 return has not yet been filed). The IRS hopes to begin issuing the rebates within three weeks.
Individuals with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 for joint filers) who are not dependents of another taxpayer are eligible for the full rebate. Payments for incomes between $75,001 and $99,999 are phased out at a 5% rate, and an individual earning $99,000 per year and above would not receive a payment.
Self-Employed Now Eligible for Unemployment: Pandemic Unemployment Assistance (PUA) provides up to 39 weeks of emergency unemployment assistance to self-employed workers, including independent contractors and freelancers. The benefit for the self-employed is $600 plus half the average Connecticut unemployment benefit amount. If you are still working, but less than before the outbreak, you are eligible to apply for partial unemployment on a pro rata basis. You can apply for unemployment here.
Paycheck Protection Program: Small businesses are now eligible for SBA-backed loans of up to $10 million for payroll and certain other expenses. If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable. Businesses with 500 or fewer employees, including sole proprietors, contractors, and freelancers, may apply.
The eligible forgivable amount equals the amount of money spent during the eight weeks from the origination of the loan on: payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments combined.
The application information has not yet been released. We understand this will be done through a network of lenders, but the details are still being negotiated.
Click here for a full guide to the Paycheck Protection Program.
SBA Debt Relief: If you have a preexisting SBA loan under the 7(a) program, a 504 loan, or a microloan, the SBA will cover all loan payments for existing SBA borrowers, including principal, interest, and fees, for six months.
Economic Injury Disaster Loans and Emergency Economic Injury Grants: The application process for Economic Injury Disaster Loans has been streamlined. These low-interest (up to 3.75%) loans are available directly from the SBA to any small business that has been injured by the Covid-19 outbreak. Click here to apply.
Even better, anyone applying for an EIDL may request an advance of up to $10,000, which will be paid within three days of applying. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll,to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments.
Tax Provisions Benefitting Small Businesses Not Eligible For the Paycheck Protection Program: For small businesses that are not eligible or choose not to apply for PPP funds, two additional tax-related benefits are available.
Bewildered? There's Help: The Chamber is here to help guide you through all these programs. The Connecticut Small Business Development Center is also standing ready to provide assistance, both with these new programs and with advice and guidance on adapting to this great challenge. Finally, the Connecticut Department of Economic and Community Development (DECD) has created a COVID-19 Business Emergency Response Unit dedicated to assisting businesses navigate resources and develop new resources. A dedicated phone line is available at 860-500-2333.