Information for Small Businesses
Small businesses are cornerstones of our communities.Congress has taken urgent action to support businesses during this public health crisis. Below is a guide to connect you with information on how to access emergency loans, tax and debt relief as well other assistance available through the federal, state and county government.
Paycheck Protection Program
Starting on April 3rd, small businesses with 500 or fewer employees can apply for zero-fee loans of up to $10 million to cover 8 weeks of payroll and other operating expenses like mortgage, rent and utility costs under the Paycheck Protection Program. Eligible businesses include sole proprietorship and independent contractors; it also includes nonprofits, veterans organizations and tribal businesses.
This program is retroactive to February 15th, to help bring workers who may have already been laid off back onto payrolls.
Businesses will not have to pay back the loan so long as they use at least 75% of the money on payroll costs over the first two months of the loan. The total amount of forgiveness will be reduced if your workforce is drawn down through attrition or if wages are reduced.
Any part of the borrowed money not forgiven will have to be repaid over two years at a 1% interest rate. There's an automatic six-month deferral on payments for all borrowers.
Businesses can apply for these loans through existing Small Business Administration (SBA) lenders. Loans will be available through June 30, 2020.
More information about the Paycheck Protection Loan Program and other resources for small businesses can be found: here.
Economic Injury Disaster Loans
Congress has expanded eligibility for SBA economic injury disaster loans (EIDL) and provides an emergency grant of up to $10,000 to small businesses and private non-profits - which functions as an advance on the loan. This grant is available within 3 days of applying, and does not have to be paid back if the loan is denied.
EIDLs are loans up to $2 million with interest rates of 3.75% for businesses and 2.75% for nonprofits, and principal and interest payments deferred up to 4 years. These loans can be used to cover paid sick leave, increased costs, rent or mortgage payments, and maintain payroll.
A small business may apply for an EIDL grant and a Paycheck Protection loan.
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Debt Relief for New and Existing Borrowers
Small businesses with SBA 7(a), 504, and microloans, or who take a loan out in the next 6 months, will automatically receive debt relief. SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. SBA borrowers may also seek an extension of the duration of their loan and delay certain reporting requirements.
Paycheck Protection loans and SBA disaster loans are not eligible—payments are already deferred under those loans.
Check in with your lender to discuss how this will apply to your business.
Help for Contractors
Government contractors have access to a number of relief options and protections. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave.
Eligible contractors are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19.
Contact your agency’s contracting officer, as well as the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU) for more information.
Employee Retention Tax Credit
Congress created a refundable payroll tax credit for businesses, large and small, that retain their employees during the COVID-19 crisis. The tax credit is equal to 50% of wages and compensation. There is an overall limit on wages per employee of $10,000. The credit is provided through December 31, 2020.
The Department of the Treasury is authorized to advance payment of the employee retention tax credit. This tax credit is not available if the employer takes an SBA paycheck protection loan.
Payroll Tax Delay
Employers (both businesses and nonprofits) may delay paying the employer-portion of payroll taxes through the end of 2020. The deferred amount is due in two installments - 50% is due before December 31, 2021, and the other 50% is due before December 31, 2022.
Deferral is not available if the employer takes an SBA paycheck protection loan.
Advance Payments of Tax Credits for Paid Leave
Congress has allowed the Treasury to send advance payments of tax credits available to employers that are required to provide up to 12 weeks of coronavirus-related paid leave to their employees.
Delay for Single Employer Pension Plans
Single employer pension plans are allowed to delay quarterly contributions for 2020 until the end of the year. Employers may also use 2019 funded status for the purposes of determining funding-based limits on plan benefits for the plan years that include 2020.
Additional Federal Resources
For more information about SBA loan programs, please visit the Small Business Administration website.
If you need additional assistance, please reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter, or SBA District Office. Find local assistance here
For more information about tax issues, please check the IRS’s website.
The Maryland Department of Commerce is offering three new business assistance programs in response to the COVID-19 pandemic. More information on each can be found below.
Maryland Small Business COVID-19 Emergency Relief Loan Fund - A$75 million loan fund offers no interest or principal payments due for the first 12 months, then converts to a 36-month term loan of principal and interest payments, with an interest rate at 2% per year.
Maryland Small Business COVID-19 Emergency Relief Grant Fund - A $50 million grant program offers grant amounts up to $10,000, not to exceed 3 months of demonstrated cash operating expenses for the first quarter of 2020.
Maryland COVID-19 Emergency Relief Manufacturing Fund - A $5 million incentive program helps Maryland manufacturers to produce personal protective equipment (PPE) that is urgently needed by hospitals and health-care workers across the country.
Visit Maryland’s Emergency Relief Fund FAQ for any questions you might have about these programs. If you have other questions or concerns about these funds, please email firstname.lastname@example.org.
Prince George’s County has launched the COVID-19 Business Relief Fund to assist local small businesses facing economic hardship. The public-private partnership provided loans and grant funding of up to $15 million for area businesses. Small businesses will have access to loans up to $100,000 and grant funding of up to $10,000.
Eligible businesses can apply for the funds through the Prince George’s County Economic Development Corporation beginning April 13, 2020