Federal, state and local officials have pledged to make many resources easily available to help small businesses during this challenging time. Extensis Relief Navigator is designed to review and summarize the resources available in each program including how to apply and who to contact.
Please check back here frequently as updates have been rapid as the situation progresses.
If we are missing any programs, please let us know by emailing email@example.com.
BREAKING NEWS:  SBA Interim Final Rule     SBA FAQs As of 4/6/20     Beware of Legal Risks of PPP Loans     Senate Majority Leader Says He Will Aim To Approve More Funding for PPP loans this week
The CARES Act the third emergency bill that Congress has prepared in response to the Coronavirus (COVID-19) pandemic was signed into law on Friday, March 27, 2020. We've been analyzing the bill and want to draw your immediate attention to an important expansion of the SBA 7(a) loan program to support new "Paycheck Protection Program" loans.
The Federal Paycheck Protection Program, a nearly $350 billion program to provide eight weeks of cash-flow assistance to small businesses through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would largely be forgiven, which would help workers to remain employed and affected small businesses and our economy to quickly snap-back after the crisis.
Allow the Paycheck Protection Program to cover payroll costs, paid sick leave, supply chain disruptions, employee salaries, health insurance premiums, mortgage payments, and other debt obligations to provide immediate access to capital for small businesses who have been impacted by COVID-19.
If you have already applied for or received EIDL (Economic Injury Disaster Loans), you will be able to refinance the EIDL into the PPP for loan forgiveness purposes. However, you may not take out an EIDL and a PPP loan at the same time and for the same purposes.
"The SBA is working very closely with the Treasury, we expect to have a program up on Friday that will be up and running that will cover half of the private workforce. I encourage all small businesses to take out these loans because if you go and hire back your workers for 8 weeks you will have a forgiveable loan and the government will pay for that. Again, it is very important for us that workers are protected."
- Secretary of the Treasury, United States - March 29, 2020
Develop an action plan today. Here is an example of an action plan:
WHERE TO APPLY FOR A PPP LOAN
You can apply at any FDIC bank, credit union, or FinTech lender.
Important Note: Many lenders are prioritizing their current customers so first contact your current lender.
Lenders with online applications:
Loans would be available immediately through more than 800 existing SBA-certified lenders, including banks, credit unions, and other financial institutions, and SBA would be required to streamline the process to bring additional lenders into the program.
WHAT IS THE PAYCHECK PROTECTION LOAN PROGRAM?
|Covered Loan Period||Retroactive to February 15, 2020, through June 30, 2020|
|Eligible Businesses||Small businesses, non-profits, Tribal business concerns, and veteran's organizations that:
|Maximum Loan Amount||The lesser of:
|Guarantees||Increases the government guarantee of 7(a) loans to 100% through December 31, 2020|
|Eligible Lenders||SBA and the Department of the Treasury are granted authority to determine additional lenders to administer the Payment Protection Program loans|
|Maturity Schedule||Maximum 10-year maturity after application loan forgiveness|
|Interest Rate||Not to exceed 4% during the covered period|
|Payment Deferral||Not less than 6 months and not more than 1 year (including payment of principal, interest, and fees)|
|Terms of Loan Forgiveness (Sec. 1106)||
|Nonbinding Guidance||Lenders should prioritize small businesses, entities in underserved and rural markets, veterans and members of the military community, small business concerns owned by socially and economically disadvantaged individuals, women, and businesses in operation for less than 2 years.|
|Lender Reimbursements||Lenders will be reimbursed at the following rates based on the balance of the financing outstanding at the time of loan disbursement:
|Appropriated Amounts for Program||$349 billion|
HOW DOES A COMPANY APPLY?
|Who will make my company's Paycheck Protection Loan?||Under the Paycheck Protection Loan program, the SBA delegates to SBA lenders (current and new) (Program Lenders) the authority to approve Paycheck Protection Loans.
The SBA provides a 100% guarantee of Paycheck Protection Loans, but an SBA lender, possibly the company's current lender or banking relationship, will underwrite and originate the loan. Here are some lenders to contact today:
|What other requirements will the company need to meet?||Eligible companies are required to make the following good faith certifications:
|DO YOU NEED HELP?||Free SBA Loan Couseling Assistance|
Additional Details Below:
The CARES Act amends the Small Business Act (SBA) to create a new Business Loan Program category (hereinafter, the "program"). For the period from February 15, 2020 to June 30, 2020 (covered period), the law allows the Small Business Administration (Administration) to provide 100% federally-backed loans up to a maximum amount to eligible businesses to help pay operational costs like payroll, rent, health benefits, insurance premiums, utilities, etc. Subject to certain conditions, loan amounts are forgivable (see more detailed discussion on loan forgiveness below).
GENERAL LOAN TERMS AND PROGRAM OPERATIONS
The SBA allows the Administrator to provide loans directly or in cooperation with the private sector through agreements to participate on an immediate or deferred (guaranteed) basis. Lenders authorized to make loans under the SBA's current Business Loan Program are automatically approved to make and approve loans under this new program, and they may opt to participate in the program under the terms and conditions established by the Department of Treasury (Treasury). Additionally, the Treasury Secretary may extend such authority to additional private sector lenders under criteria established by Treasury (including, for instance, allowing additional lenders to originate loans).
The Administrator may guarantee covered loans under this program on the same terms, conditions, and processes as a loan made under the SBA's current Business Loan Program. No collateral or personal guarantee is permitted to be required for a loan. The interest rate on loans under the program is not to exceed four percent. There will be no subsidy recoupment fee associated with the loans and no prepayment penalty for any payments made. Additionally, the Administrator has no recourse against any individual, shareholder, member, or partner of an eligible loan recipient for non-payment, unless the individual uses the loan proceeds for unauthorized purposes (see discussion below of permitted uses).
A loan made under the SBA's Disaster Loan Program on or after January 31, 2020, may be refinanced as part of a covered loan under this new program as soon as these new loans are made available. The CARES Act specifically allows SBA Disaster Loan recipients with economic injury disaster loans made since January 31, 2020 for purposes other than the permitted loan uses under this program to receive assistance under this program.
Unlike prior drafts of the CARES Act, the final version contains a "Sense of the Senate" that the Administrator should issue guidance to lenders and agents to ensure that processing and disbursement of covered loans prioritizes:
ELIGIBLE LOAN RECIPIENTS
In addition to "small business concerns" as currently defined under the SBA, eligible businesses for the new program include any business concern, nonprofit organization, veterans' organization, or Tribal business if it employs not more than the greater of-
Loan Maximum, Borrower Eligibility Requirements, and Permissible Uses
The maximum loan amount (capped at $10 million) is the lesser of:
(B) Upon request, for businesses that were not in existence during the period from February 15, 2019 to June 30, 2019 -
(C) $10 Million
There are very few borrower requirements to obtain a loan under the new program. Those requirements include a good-faith certification that:
Businesses may, in addition to uses already allowed under the SBA's Business Loan Program, use the loans for:
In evaluating eligibility of borrowers, a lender must consider whether the borrower was operating on February 15, 2020 and had employees or independent contractors for whom the borrower paid.
LOAN FORGIVENESS AND PAYMENT DEFERRAL RELIEF
Regarding loan payment deferral rights, the CARES Act provides that businesses that were operating on February 15, 2020 and that have a pending or approved loan application under this program are presumed to qualify for complete payment deferment relief (for principal, interest, and fees) for six months to one year. Lenders are required to provide such relief during the covered period (if secondary market investors decline to approve a lender's deferral request, the Administration must purchase the loan). The Administrator has 30 days from enactment of the CARES Act to provide guidance to lenders on this process.
The program loans qualify for the CARES Act's broader loan forgiveness provisions in Section 1106. Specifically, indebtedness is forgiven (and excluded from gross income) in an amount (not to exceed the principal amount of the loan) equal to the following costs incurred and payments made during the covered period:
Forgiveness amounts will be reduced for any employee cuts or reductions in wages.
The reduction formula for fewer employees is:
Or, for seasonal employers -
Note that this formula will be used to reduce forgiveness amounts, but cannot be used to increase them.
For reductions in wages, the forgiveness reduction is a straight reduction by the amount of any reduction in total salary or wages of any employee during the covered period that is in excess of 25% of the employee's salary/wages during the employee's most recent full quarter of employment before the covered period. "Employee" is limited, for purposes of this subparagraph only, to any employee who did not receive during any single pay period during 2019 a salary or wages at an annualized rate of pay over $100,000.
There is relief from these forgiveness reduction penalties for employers who rehire employees or make up for wage reductions by June 30, 2020. Specifically, in the following circumstances, the forgiveness reduction rules above will not apply to an employer between February 15, 2020 and 30 days following enactment of the CARES Act -
The CARES Act clarifies that employers with tipped employees (as described in the Fair Labor Standards Act) may receive forgiveness for additional wages paid to those employees. Also, emergency advances received under the expanded SBA Disaster Loan Program discussed below will be excluded from forgiveness amounts.
Within 90 days of determining the ultimate forgiveness amount, the Administrator must remit payment plus interest accrued through the date of payment to the lender. Authorized lenders and secondary market participants (at the discretion of the Administrator) may report expected forgiveness amounts, up to 100% of principal, on program loans or on pools of such loans. The Administrator must purchase the expected forgiveness amounts in such reports within 15 days.
There are some required processes to apply for loan forgiveness. Borrowers seeking forgiveness of amounts must submit to their lender -
Forgiveness amounts that would otherwise be includible in gross income, for federal income tax purposes, are excluded.
The Administrator has 30 days following enactment of the CARES Act to issue regulations on these forgiveness provisions.
SBA Affiliation Rules and CARES Exceptions
Under existing law, in order to be eligible for a loan under the SBA's 7(a) program, the recipient must be a small business concern. The SBA typically uses standards that are stated in terms of number of employees or average annual receipts to determine the largest size that a business concern (including its domestic and foreign affiliates) may be to still be classified as a small business concern.
Under the CARES Act, any business concern would be eligible to receive an SBA loan authorized by the CARES Act (a "covered loan") if the business concern employs not more than the greater of (I) 500 employees or (II) if applicable, the size standard in number of employees established by the SBA for the industry in which the business concern operates.
The CARES Act also includes some exceptions to this standard. These exceptions are:
Business Concerns with More than One Physical Location
Any business concern with not more than 500 employees per physical location and that is assigned a North American Industry Classification System ("NAICS") code beginning with 72 (i.e., a business concern in the Accommodation and Food Services sector) at the time of disbursal is eligible to receive a covered loan.
Waiver of Affiliation Rules
As noted above, the SBA ordinarily counts the employees or annual receipts of a business concern's affiliates when determining whether the business concern qualifies as a small business. Section 121.103 of Title 13 of the Code of Federal Regulations sets forth the general principles the SBA uses to determine affiliation. For example, business concerns and other persons (entities or individuals) are affiliates of each other when one controls or has the power to control the other, or a third party (or parties) controls, or has the power to control, both. Control of a business concern may be established by, for example, ownership or control, or the power to control 50% or more of such party's voting stock, or a block of such party's voting stock that is large compared to all other outstanding blocks of voting stock. Control of a business concern may also be established through, among other things, a party's ability, under the concern's charter, by-laws, or shareholder's agreement, to prevent a quorum or otherwise block action by the board of directors or shareholders of the business concern. The CARES Act provides that this regulation is waived with respect to eligibility for a covered loan for:
To be covered by the first exception outlined above, the business concern must be assigned a NAICS code beginning with 72. Below is a list of industries with a NAICS code beginning with 72.
Effect of the Waiver of Affiliation Rules
The CARES Act would allow certain business concerns that previously did not qualify for an SBA loan because its affiliations caused the business concern to exceed the applicable thresholds to qualify for a covered loan. For example, assume that a business concern in a covered industry with 300 employees received financing from a private equity fund and granted the fund control rights. That business concern is currently deemed an affiliate of the fund, and of any other portfolio company controlled by the fund. Further assume that such affiliation caused the business concern to no longer be considered a small business because when measured against the SBA's standards, the business concern is deemed to have all the employees of the private equity fund and the fund's other portfolio companies. As a result of the waiver of affiliation rules in the CARES Act, the business concern would no longer be an affiliate of the private equity fund and the other portfolio companies, and the business concern may qualify for a covered loan.
The proposed waiver of affiliation rules may also help some businesses that are structured so that they consist of more than one business concern. For example, assume a corporation owns three hotels through three separate limited liability companies, and that each such subsidiary has fewer than 500 employees. Further assume that the corporation does not qualify as a small business because it is too large when you consider the total number of its affiliates' employees, i.e., the employees of the three subsidiaries it controls. However, if the affiliation rules are waived, each such subsidiary may apply for a covered loan.
However, the proposed waiver of affiliation rules will not necessarily benefit businesses that own separate establishments through the same business concern. For example, assume the three hotels in the example above are owned directly by the corporation, and the corporation has 1,000 employees, including over 500 employees who work at its largest hotel. The corporation would be a single business concern with over 500 employees and would not be eligible to apply for a covered loan as a result of the waiver of affiliation rules.
SBA is issuing Economic Injury Disaster Loans up to $2 million, 30 year term at 3.95% interest (2.75% for non-profits) to help pay fixed debt, payroll, accounts payable and other operation expenses.
The SBA provides disaster loans to U.S. small businesses and individuals under the disaster loan program set forth in Section 7(b) of the Small Business Act. Pursuant to the Coronavirus Preparedness and Response Supplemental Appropriations Act, 2020, COVID-19 has been deemed a disaster for purposes of the SBA disaster loan program.
COVID-19 disaster loans in amounts up to $2 million each may be issued to eligible borrowers in each state that has made an economic injury declaration to the SBA. Per updated guidance issued by the SBA on March 17, 2020, the SBA is waiving the existing requirements for county-by-county disaster declarations and is permitting declarations by each state on a statewide basis upon establishment of at least five impacted businesses in such state. The list of states that have done so can be found on the SBA website, which is currently being updated multiple times a day.
Please Note: The SBA Site has been experiencing heavy traffic, if it is slow to load or does not load, wait a few minutes and try again.
To qualify as a "small business concern" eligible for a COVID-19 disaster loan, a business must be (a) independently owned and operated, (b) not dominant in its field of operation, and (c) not larger than the relevant business size set forth in the SBA Table of Small Business Size Standards Matched to North American Industry Classification System Codes (13 C.F.R. § 121.201). The SBA's site also provides a tool for navigating the business size classification system.
Notwithstanding the helpful links provided by the SBA, for businesses with a more complicated capital structure, the final determination of eligibility can be more complex, and the income of controlling owners of a limited liability company or other business may be combined with the income of the impacted business by the SBA for purposes of making a final determination. (See MCLANE ADVANCED TECHNOLOGIES, LLC, APPELLANT, SBA No. SIZ-4746 (2005), determining that "[t]he majority ownership rule at 13 C.F.R. § 121.103(c)(1) also applies to interests in limited liability companies, and the majority owner of a limited liability company controls and is affiliated with, that company.")
If a business is eligible and its state has made a proper COVID-19 declaration, a COVID-19 disaster loan is now available with terms of up to 30 years. The proceeds of such a loan may be used to pay "fixed debts, payroll, accounts payable and other bills that can't be paid because of the disaster's impact. The interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%." (See March 17 SBA Advisory.)
SBA will coordinate the application process with each state as it becomes eligible, and applications can be made online. Please be aware that, as of March 18, the SBA website has suffered intermittent connectivity issues, possibly due to unusually high traffic on its website.
Subject to further updates, applications for an eligible business will generally be expected to include an IRS Form 4506-T, current information such as a personal financial statement, a schedule of liabilities and a copy of the most recently filed federal income tax return. (See (a) SBA disaster loan assistance FAQs and (b) 13 C.F.R. § 123.1.)
Please be aware that, subject to further updates by the SBA, under the current SBA disaster loan program, each COVID-19 disaster loan exceeding $25,000 is required to be secured by some form of collateral, as determined by the SBA during the review of each application. If the business has an existing credit facility, particularly a secured credit facility, it must determine whether the applicable credit documents would require consent of senior or other lenders before the business can obtain a COVID-19 disaster loan. Be aware that the lender also may need to consent to a grant of a first lien in favor of the SBA (or third-party lender of a COVID-19 disaster loan) on agreed-upon collateral in order to close a COVID-19 disaster loan.
The Main Street Business Lending Program, a new initiative announced by the Federal Reserve, will complement efforts by the SBA and further support lending to eligible small and medium-size businesses.
New York City
New York DOL is also reminding businesses of its Shared Work Program that can provide an alternative to laying off employees during business downturns by allowing workers to work a reduced work schedule and collect partial unemployment insurance benefits for up to 26 weeks. Instead of cutting staff, you will be able to reduce the number of hours of all employees or just a certain group: Shared Work Program PDF Brochure
Salt Lake City
Businesses with fewer than 5 employees up to $27,000 grant that covers 40% of payroll costs over two months.
The Main Street Emergency Grant Program, proposed by U.S. Senators Chris Murphy (D-Conn.), Jeff Merkley (D-Ore.) and Chris Van Hollen (D-Md.), would allow small businesses to apply and receive grants quickly through the Treasury Department.
Most banks are supporting their impacted business customers with loan modification including requiring interest only payments, loan forbearance and other programs. You should contact your bank relationship manager. Here are a few examples.
Five federal banking agencies and a trade group for state banking regulators issued guidance Sunday (3/22/20) encouraging banks to make loan modifications for borrowers affected by the coronavirus.
The joint statement by the Federal Reserve, Federal Deposit Insurance Corp., Office of the Comptroller of the Currency, Consumer Financial Protection Bureau, National Credit Union Administration and Conference of State Bank Supervisors said banks will not be required to categorize those modifications as troubled debt restructurings.
The agencies said short-term loan modifications can include payment deferrals, fee waivers, extensions of repayment terms and other insignificant payment delays. Click here for more details.
Please also see this informative article on five strategies to keep in mind for managing your lending/banking relationship through these challenging times.
Click here to download. This document is being updated by the AICPA regularly so check this link often.
Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed. Some states and cities are expected to follow with similar changes. Click here for the IRS announcement.
Some utility providers are offering to stop cutting people off for nonpayment.
A number of large internet companies have agreed not to terminate residential or small business customers who can't pay their bills: AT&T, Comcast, Cox, RCN, Sprint, T-Mobile and Verizon. A full list of companies is available on the Federal Communications Commission site.
It is not yet clear whether companies want customers to call to invoke this relief and provide proof or whether they will offer it automatically to everyone. People who need help should call and ask.
A number of water service providers have either suspended shut-offs for nonpayment or don't shut service off for late payments generally, according to a ProPublica roundup. They include Atlanta; Birmingham, Ala.; Long Beach, Calif.; Los Angeles; Newark; New York City and St. Louis.
In Washington state, the main Seattle area utilities are suspending cutoffs as well. In addition, the provider of electric and water service in Seattle is allowing people to self-certify their recent income reductions in order to qualify for at least half off their bills.
In California, Pacific Gas and Electric has, until further notice, stopped shutting off its services to consumers and businesses who have not paid. In New York, Con Edison also has temporarily suspended any electric and gas service shut-offs.
Other utility organizations that are participating in COVID-19 relief programs include:
Major Phone Carriers
AT&T, Verizon, Sprint, and T-Mobile are making accommodations for their business partners as well.
Credit Card Issuers
Assistance programs being developed among COVID-19 uncertainty. Click here for details on participating institutions.
Many business insurers are providing their customers with up to a 90 days payment grace period. This assistance varies by state and insurer so you should check with your agent or insurer for their specific policy.
Work From Home Software
Several companies are offering their collaboration software free of charge, including Microsoft, Zoom, Google, and many more.
It is safe to say that landlords and tenants will be viewing certain routine boilerplate language in leases differently in the future. Right now though, the COVID-19 pandemic's impact on businesses and business operations is raising uncertainty under commercial leases about issues best addressed with proactive assessment from tenants and landlords regarding their lease obligations: Click here for more details.
Many banks are committed to providing maximum support to their business customers during the public health crisis including increased credit lines and expedited loans. Please contact your bank relationship manager.
The employment law firm of Jackson Lewis has aggregated various laws, rules, and regulations in the below 50-state surveys. To ensure you have access to the most up-to-date information, each of the surveys is being updated regularly.
As the coronavirus crisis spreads and its impacts widen, it is important for businesses to contact their insurance agent or broker to fully understand the property and business interruption insurance coverage they have - or potentially have. While most insurers believe their standard insurance policies will not cover Coronavirus related business interruption claims they also expect their policy language and coverage position to be court tested. So, keep proper records of loss, promptly notify your insurers and be prepared to pursue coverage.
Founded in 1997, Extensis Group is one of the largest and fastest growing Professional Employer Organizations (PEOs) in the Northeast. Today, Extensis Group manages over $2 billion in employment-related costs annually.
Small and medium-sized businesses recognize that the Extensis Group promise to simplify HR delivers an even greater value-time to focus on growing their company. Our comprehensive portfolio includes personalized services for:
And at Extensis, we understand our services are crucial to our client's business operations, which is why we have implemented our Extensis Business Continuity plan managed by our deeply experienced leadership team, with support from our expert healthcare network, to keep our operations running smoothly and provide you with the same dedicated, reliable service you've come to expect from Extensis.
The health and wellness of our team, partners, clients and their employees is of greatest importance to us. We have been monitoring COVID-19 developments closely and as the situation continues to evolve, we remain focused on maintaining business operations while keeping everyone safe and healthy.
FREQUENTLY ASKED QUESTIONS
What is Extensis doing in response to COVID-19?
Extensis is closely monitoring the evolving COVID-19 situation through the U.S. Centers for Disease Control and Prevention, the World Health Organization (WHO) as well as from our deep network of healthcare experts and professionals.
We have implemented our Extensis Business Continuity Plan to ensure no disruption in service to our clients while protecting our team, partners and community. Our plan includes:
What are the parameters of the Extensis Business Continuity Plan?
Understanding and planning for risk is at Extensis' core. We have stayed one step ahead of government mandates by swiftly enacting protocols for social distancing, increased cleaning and disinfecting procedures across our offices, and eliminating all in-person gatherings and meetings to promote the safety of our community.
We remain ahead of the health and safety changes due to:
What is Extensis doing to support clients during this time?
As part of our business continuity plan, we have activated a robust client communication program in which we are focused on:
Have questions? We are open for business and we're here for you. Please contact your Extensis representative today, visit us at www.extensisgroup.com or call us at 888.473.6398.
The information contained in this website are provided for informational purposes only. It should not be construed as business, legal, accounting, tax, financial, investment or other advice on any matter and should not be relied upon for such.
The information in this document may not reflect the most current developments as the subject matter is extremely fluid and may change daily. The content and interpretation of the issues addressed herein is subject to revision. Extensis Group, LLC and its subsidiaries and affiliates disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this document to the fullest extent permitted by law. Do not act or refrain from acting upon the information contained in this document without seeking professional or other advice.