This is the current help available as of today, March 27, 2020. Read the entire post to find what help you can utilize, and also to find a full 247 page PDF document from the Senate on the emergency assistance, followed by a link to the Minnesota small business emergency loan website. If you are a business owner make sure to scroll all the way to end of this article for documents and links.
The U.S. Senate passed legislation that provides payroll and rent relief to small businesses.The Senate bill:
- Includes money for employee salaries under $100,000; paid sick or medical leave; insurance premiums; and mortgage, rent and utility payments
- Sets the funds up as a loan that is eligible for 100% forgiveness if used for the above purposes and in conjunction with guidelines related to staff retention
- Provides funding for businesses or 501(c)(3) nonprofits with less than 500 employees, including sole-proprietors, independent contractors, and other self-employed individuals
- Waves affiliation rules for businesses in the hospitality and restaurant industries, and specifies that businesses with more than one physical location can be eligible so long as no one location employees more than 500 individuals.
Congress is also promising quick and efficient fund access for small businesses – something we can work with you on.In fact, we may have a critical role to play in making sure small businesses get these funds quickly. The bill requires eligible borrowers to make a good faith certification that the loan is necessary due to the uncertainty of current economic conditions caused by COVID-19.
One-time payments of up to $1,200 should start going out in the next three weeks to those who have filed individual tax returns. Those who file joint tax returns will get up to $2,400.The Senate passed the package Wednesday and the House is expected to approve it today.
The payments will be sent via direct deposit to those of you who already have provided the IRS with your bank account information. For those who haven’t, the checks will be mailed and it will take a lot while longer.
So how much money should you expect?
It depends on how much you’ve earned in the past two years.If you’ve already filed your 2019 taxes, the IRS will use those returns to determine your rebate. If not, your 2018 returns will be used to calculate your check.
Individuals with an Adjusted Gross Income of $75,000 or less will be eligible for up to $1,200 ($2,400 for joint tax returns) and $500 for each qualifying child.
The payments will start to phase out for those who earn more than $75,000, or $150,000 for a joint return. The amount you receive will be decreased by 5% of the amount your income exceeds $75,000. For example, a single person with an $85,000 salary would get $700 after subtracting 5% of $10,000, or $500. The payments will phase out completely for single filers with incomes exceeding $99,000, $136,500 for head of household filers with one child, and $198,000 for joint filers with no children.
You don’t have to apply to receive the money. If you’ve filed income taxes in the past two years, you will automatically get the money. If you haven’t filed in a while, time to get with it! Call us, we’re already busy, but we can help.
And best of all: The checks aren’t taxable.
Older people or others who don’t need to file and/or have not filed? You may want to file just for this reason.
Loans that can convert to grants:
Updated 3/2/20 7:30PM CST: Just got some updates from SBA loan professionals. There is something out there that offers loan forgiveness on SBA loans based on terms and conditions.
Most likely the interest rate will be 3.75% and 15 to 30 year. But a partial of the principle can be forgiven as long as it is used for the upkeep of the business. For example, if you borrow $100K, but you can show that say $30K goes to pay your rent, employees and other business essential spending, then you owe $70K, and only have to worry about paying that amount back plus interest.
The loan forgiveness is for companies that have 500 or less employees and will provide 8 weeks of cash flow as long as the money will be used for payroll, paying paid sick leave, insurance, mortgage payments, and utilities.
Minnesota Unemployment insurance page with the latest news
Full Senate bill document:
Coronavirus Aid, Relief, and Economic Security Act “CARES Act”. Here is the language of the bill. Of importance to small business owners is the section for relief for small business on pages 5-35 dealing with Small Business Interruption. These are loans that can be converted from a loan to a grant (meaning you may not have to pay it back).
DOWNLOAD the PDF here (caution: large file size)
It is recommended to send in a paper application and over-nighting it… Their site can’t handle all the traffic, so it’s been crashing.
Minnesota Small Business Emergency Loans
The Small Business Owner’s Guide to the CARES Act PDF
Here’s the link for information on unemployment for employees
Find a list of local businesses that Ethan Wise recommends here: Business and services recommended by Ethan