CARES Act For Businesses, Sole Proprietors and Independent Contractors
Payroll Tax Deferral:
Employers are able to postpone the amount of payroll tax they pay on employees’ salaries attributable for 2020. If elected, half of these taxes will be due 12/31/2021 and the remaining half by 12/31/2022.
Economic Injury Disaster Loans (EDIL):
For any business (under 500 employees), sole proprietor or independent contractor, non-profit and veterans’ organization who has suffered a temporary loss of revenue from a Coronavirus diagnosis or the effects of a quarantine, The amount granted is up to $10,000 and it does not have to be repaid.
Paycheck Protection Program:
This program is an incentive for businesses to keep employees on their payroll and it is forgiven if they are kept on the payroll for the next 8 weeks. This plan is retroactive to February 15th.
- The proceeds must only be used for payroll (75% or more), mortgage interest and utilities. The filing began on April 6th for businesses and April 10th for sole proprietors and independent contractors. A company can maintain or rehire their workers to qualify.
- To determine how much your business can receive, calculate the average monthly payroll expense over a 12 month period. Multiply that number times 2.5.
- The forgiveness of repayment is reduced in proportion to the reduction in headcount or reduction in salaries of the workers. If any of the proceeds have to be repaid, the loan has a 2 year term with 1% interest.
Small Business Administration (SBA) Express Bridge Loans:
For those companies with current business relationships with SBA express lenders to be able to access up to $25,000 quickly while applying for other loans. This loan is to be repaid with proceeds from the EDIL loan. https://www.sba.gov/document/support–express-bridge-loan-pilot-program-guide
SBA Debt Relief Programs:
The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months. They will do the same for new loans issued prior to September 27,2020.
For more information on all of these programs, go to: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options