Most dealers have been feeling anxiety over what this COVID-19 pandemic means for their business and employees. On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security (CARES) Act into law. The $2 trillion CARES Act includes financial relief for individual Americans, as well as small businesses across the country. In addition, the Coronavirus Preparedness and Response Supplemental Appropriations Act, passed into law on March 6, provides an additional $8.3 billion in emergency federal funding.
With these new financial relief acts in place, where do you start? Here’s a quick rundown of the financial resources available and how to get started seeking the support you deserve.
Paycheck Protection Program
The Paycheck Protection Program provides loans up to $10 million for payroll and other expenses to small business who keep their employees on the payroll. Small businesses include all businesses with fewer than 500 employees, subject to limited exceptions. 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. Under this program, loan payments are deferred for six months to one year, and interest on the loans will be no more than 4%. To get specific information and learn how to apply, visit SBA’s website.
COVID-19 Economic Injury Disaster Loans
The SBA’s COVID-19 Economic Injury Disaster Loan program provides small businesses with Economic Injury Disaster Loan advances of up $10,000 and working capital loans of up to $2 million to help overcome temporary revenue loss from the COVID-19 pandemic. These loans carry an interest rate of 3.75% for small businesses and repayment terms vary by applicant, up to 30 years. Loan advance funds will be made available within three days of a successful application. Visit the SBA website to apply for a disaster loan.
SBA Express Bridge Loans
The Express Bridge Loan Pilot Program allows businesses who have an existing relationship with an SBA Express lender to access up to $25,000. These loans can be used to cover urgent costs while applying for a direct SBA Economic Injury Disaster Loan. You can find an Express Bridge Loan Lender by connecting with your local SBA District Office.
Federal income tax filing and payment extension
The deadline for filing federal income taxes is now July 15, 2020. This relief applies to all individual returns, trusts, and corporations. Individual taxpayers who need additional time to file beyond the July 15 deadline can request a filing extension by filing Form 4868 through their tax professional, tax software, or using the Free File link on IRS.gov. Businesses who need additional time must file Form 7004.
Local and state-wide small business loan programs
Many states and counties also have new small business support laws and loan programs in place. HR software company Zenefits has a comprehensive list of small business financial assistance programs by state on their website. You can also visit the SBA.gov site to learn more about local small business support near you or visit your local Governor’s website to learn about financial assistance in your home state.
If you have specific questions about any of the small business relief packages, contact your business’ advisors.