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DIRECTPAY is a registered ISO of Wells Fargo Bank, N.A., Concord, CA
THE 2020 STIMULUS PACKAGE
What It Means For Small Business Owners
With the passing of the the $2 trillion Coronavirus Aid, Relief and Economic Security (CARES) Act, there will be some help coming to small business owners from the federal government.
More than $300 billion of the package will be allocated to help small businesses stay afloat and keep employees on during closures and social distancing efforts. This Friday, April 3rd, small businesses affected by the COVID-19 pandemic can start applying for loans and other types of assistance.
See below for a breakdown of how these measures could affect you and take a look at the Small Business Owner's Guide to the CARE ACT.
Paycheck Protection Program
Who's eligible? Businesses with 500 or fewer employees who continue to pay workers during the coronavirus crisis
Designed to ensure small businesses do not have to lay off employees, the loans distributed by the Small Business Administration can be partially forgiven and carry an interest rate up to 4%. Individual loans could cover six weeks of pay up to $1,540 per week per employee.
While in many cases business owners would be responsible for repaying the loans, some provisions in the bill mean that it's possible for these loans to become grants with no repayment expectation.
Will it affect you? If you need capital to cover the cost of retaining your employees, then learn more here.
Small Business Debt Relief Program
Who's eligible? Business owners that have non-disaster SBA Loans (including 7(a), 504, and microloans)
SBA will cover all payments for six months - including principal, interest and fees. This relief will also be available to new borrowers who take out these loans within six months of the CARES Act being signed into law.
Will it affect you? Find out if your loans qualify here.
Tax Credit
Who's eligible? Business that have kept their employees and incurred a 50% or more loss year-over-year. Businesses that have been fully or partially suspended as a result of government orders.
Businesses that can prove they incurred at least a 50% loss compared to past years are going to be offered a tax credit if they keep their workers employed during the pandemic.
Small businesses that take this tax credit will get refunded for 50% of the wages they pay up to $5,000 for every employee.
The catch to this option, however, is that businesses that take this credit will not be eligible for various other SBA loans.
Will it affect you? If you have had a significant year-over-year loss or you are currently shut down but are still maintaining your employees, you can expect to receive this tax credit.
Counseling & Training
Who's eligible? All small business owners
If you need advice and support to guide you through this uncertain time in your business you can contact your local Small Business Development Center (SBDC), Women's Business Center (WBC), or SCORE mentorship chapter.
Through the CARES Act, they will receive additional funds to provide free counseling and low-cost training and offer a joint platform with all up to date COVID-19 information and resources.
Will it affect you? We recommend you explore local assistance here.
COVID-19 Emergency Economic Injury Grant
Who's eligible? Sole proprietors, independent contractors, businesses with 500 or fewer employees
The Small Business Adminstration is offering loans that would cover basic expenses such as payroll for employees, rent, and utilities.
Businesses would not be expected to pay these back in full, as the Treasury Department will be funding this program and paying banks back. If a business has recently let some employees go, it would be ordered to pay more money back. Also, under the program, loans for annual salaries higher than $100,000 will not be forgiven.
Will it affect you? If you need an infusion of cash to cover you now, then learn more here.
One-Time Direct Payment
Who's eligible? Americans making up to $75,000 per year
There will be a one-time direct payment made to Americans of $1,200 per adult making up to $75,000 a year, and $2,400 to married couples making up to $150,000, with $500 payments per child.
Will it affect you? If you make less than $75,000 annually, you will receive the full stimulus check.
Unemployment Benefits
Who's eligible? Employees who have been let go or furloughed, freelancers and gig workers
Lawmakers agreed to a significant expansion of unemployment benefits that would extend jobless insurance by 13 weeks and include a four-month enhancement of benefits.
The program was broadened to include freelancers, furloughed employees and gig workers, such as Uber drivers.
Will it affect you? It may affect your employees if you have had to downsize your staff during this time.
We know that many members of our community are also freelancers and contractors who may need to apply for unemployment benefits. Learn more here.
As always, please contact us if you have any questions or require support at (800) 326-9897 or via email to support@directpayinc.com.
You can also book a time to chat with Relationship Manager Jason Henke with the calendar below.
© DIRECTPAY Inc. All Rights Reserved
DIRECTPAY is a registered ISO of Wells Fargo Bank, N.A., Concord, CA
© DIRECTPAY Inc. All Rights Reserved
DIRECTPAY is a registered Independent Sales Organization of Wells Fargo Bank, N.A., Concord, CA.
DIRECTPAY is partnered with START Merchant Services, a registered MSP of Elavon Inc., a subsidiary of U.S. Bancorp.