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Due to the rapidly developing Coronavirus situation, the US government has taken an unprecedented step in the history of economic assistance to help both individuals and small businesses. On March 27, 2020, the US Congress passed the CARES ACT (the “ActAct”) in the amount of 2 trillion USD, designed to financially help with the looming crisis. While we stay home, many companies are closed and suffer losses. According to the Act, 350 billion USD is directed to help small businesses with the goal of preventing massive employee layoffs and business closures. Given that the Act was adopted during an emergency and covers a huge variety of areas, many details of the Act’s application of the t are being clarified. Some of the secondary information, without which practical implementation of the Act is impossible, is quite contradictory, and the government continues to develop specific steps, forms, conditions and other details together with banks and other institutions. However, we have analyzed the information available to date regarding these loans. There are two types of programs that are designed to help small businesses get cash injections. Economic Injury Disaster Loans (EIDLs) Small Business Administration (SBA) provides loans called Economic Injury Disaster Loans (EIDLs). The loans provided by this organization have been around for a long time and are designed to help small businesses cope with various types of natural disasters. However, this is the first time in the history of the administration that these loans are issued in order to overcome the economic consequences of a pandemic. First, let’s look at the terms of this EIDLs loan: • Loan amount up to 2 million US dollars • Loan term – 30 years • Interest rate – 3.75% for small businesses (2.75% – non-profit organizations) • Loan payments are deferred for a year from the date of receipt of the loan. • A loan can be used to pay debts, payroll, and other bills. Please note that the final terms of the loan will be considered individually, depending on the business. Credit recipients can receive up to $ 10,000 in grants (or debt that can be “forgiven”) if this amount is used to pay off sick pay, salary payments, supply payments, or rent payments. An interesting fact is that even those who have completed the process of obtaining the main EIDL loan can theoretically receive this grant. You can also apply for this loan even if your small business has already opened a credit line. The business must be registered no later than January 3, 2020. If you need assistance in preparing documents for this EIDL loan, please contact us (femida.us) and we will help you in this process. More information about the SBA’s work and financial assistance related to COVID-19 can be found here. Paycheck Protection Program Loan Guarantee The second option of government support is called Paycheck Protection program Loan Guarantee (”PPP”). This program is designed to help small businesses save employees and their wages. Loans under this program are designed for small businesses (including non-profit organizations, private entrepreneurs, independent contract workers, “self-employed entrepreneurs” (i.e. ~ individual entrepreneurs), which have no more than 500 employees. Please note that you can only apply for a loan if the company was registered in the United States no later than February 15, 2020. The approximate start time for accepting applications for the PPP program is April 3, 2020,for small businesses and private entrepreneurs. Others can apply starting from April 10, 2020. unlike EIDLs, applications for this assistance will be accepted through accredited banks, credit unions, and depository institutions. You will need to contact your bank directly for more information and for the application form. The terms of this loan at the time of publication are as follows: • The maximum loan amount will be (i) up to $ 10 million or (ii) the average monthly salary Fund of x 2.5, including those employees whose annual salary does not exceed $ 100,000 per year, as well as the cost of hospital, health care and other benefits based on the last year of payments on the date of receipt of the loan. • The maximum interest rate on the loan is 4%. • The loan repayment period is 10 years. • No personal order or collateral is required to obtain a loan. * Loan repayments can be deferred up to 12 months. • This loan or part of it may be forgiven and will not be counted as income (that is, under normal circumstances, the “forgiven” loan is taxable income) if, if at least 75% of the loan is used to pay wages, as well as payments for rent, utilities, Internet access, and certain other payments that are key to the survival of the business. To receive this amount without further payment obligations (i.e.” loan forgiveness”), you must meet the following conditions: 1. It is necessary to have the same number of employees in the 8-week period from the moment of receiving the loan as it was in the period from February 15, 2019 to June 30, 2019 or January 1, 2020 to February 15, 2020. If you do not meet this condition, the amount of “forgiveness” may be reduced. The amount can also be reduced if the salary of employees who earn less than $ 100,000 a year was reduced by more than 25% in the last quarter. For more detailed calculation, see here. 2. You will be able to get a partial “forgiveness” of the amount if you re-hire employees who were cut between February 15, 2020 and April 26, 2020 to June 30, 2020. You can apply only for one loan! In addition, the business must meet certain “small business” criteria, and you can check whether your business meets the required qualifications here. Almost all American businesses have suffered in one way or another (and, unfortunately, the negative trend will continue for the time being) from the current fight against the virus, and the American government recognizes the disastrous nature of this situation and tries to compensate for the damage or at least weaken its impact so that businesses can survive and continue with new strength. Thus, participation in these programs is not only about helping yourself and your business, but also actually helping the country’s economy. Given the targeted and “urgent” direction of these programs, we assume that funds for these programs will be allocated in an “accelerated mode” (fast tracking). In this regard, we strongly recommend that you do not delay the application process and start collecting the necessary documentation (for a preliminary list, write to us), and we will keep you updated on all updates (and, if necessary, provide assistance) regarding these programs and loans in our Facebook group.

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