It has been a crazy couple of weeks. The Coronavirus (COVID-19) is wreaking havoc on many small businesses. Is your business in need of help? Or do you know a business that needs help? Here is the most up to date information that I found (as of
March 19,2020 March 20, 2020) regarding financing, unemployment, taxes, and other small business resources for handling the Coronavirus (COVID-19 ).
Let’s start with the most pressing area for many businesses: Loss of revenue. A lot of businesses need financing to cover every day operating experiences. Here is a current list of programs or organizations that provide loans or grants to help businesses with economic fallout from the Coronavirus (COVID-19). Each program has different eligibility criteria, funding limits, and payment terms. So, contact the program’s administrator to determine your eligibility and the application process.
Small Business Recovery Loan Fund
On March 16, 2020 Governor Baker created a $10 million dollar loan fund that offered loans of up to $75,000 for small businesses feeling the effect of the Coronavirus (COVID-19). The funds were administered through Massachusetts Growth Capital Corporation on very favorable terms. Unfortunately, as of 12:30 p.m. on March 19, 2020, it is no longer accepting applications. See https://www.empoweringsmallbusiness.org/
Small Business Administration (“SBA”) Economic Injury Disaster Loan Program
The SBA is offering low-interest federal disaster loans (“Federal Disaster Loans“) to businesses in Massachusetts that are suffering substantial economic injury from the Coronavirus (COVID-19). See https://www.sba.gov/disaster-assistance/coronavirus-covid-19. Federal Disaster Loans have the following features:
- Up to $2 million dollars;
- Can be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid;
- Interest rate of 3.75% for small businesses. The interest rate for private non-profit organizations is 2.75%
- Long-term repayments in order to keep payments affordable, up to a maximum of 30 years.
The deadline to apply for a Federal Disaster Loan is December 18, 2020. For additional information about these loans and applying go to: https://disasterloan.sba.gov/ela/. You can also contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail firstname.lastname@example.org.
Other Sources of Funding
Other organizations and municipalities are also offering financial help and other small business resources Here is a list of the ones I found in alphabetical order:
- City of Fitchburg Emergency Small Business Grants. The City of Fitchburg has developed a $2,500 grant program for small businesses in Fitchburg. Preference will be given to businesses with 5 or fewer employees, and restaurant/retail/entertainment businesses. Businesses must demonstrate business loss as a direct result of the COVID-19 outbreak. For more information see http://fitchburgma.gov/874/E-Permitting-and-Emergency-Resources.
- City of Springfield Restaurant Grant Program. The City of Springfield launched a grant program to assist local restaurants. The program makes funds available to help restaurant businesses reorganize their service delivery operations to meet the public health restrictions and retain their existing employees. Qualifying restaurants can apply for up to $15,000 to help with these expenses. For more information and details on how to apply, please contact Springfield’s Chief Development Officer Timothy Sheehan at (413) 787-6024 or email@example.com.
- Creative Capital has aggregated a list of resources and assistance for artists during the Coronavirus (COVID-19) outbreak. See https://creative-capital.org/2020/03/13/list-of-arts-resources-during-the-covid-19-outbreak/
- Facebook Small Business Grants Program. Facebook is offering $100 million in cash grants and ad credits for 30,000 eligible small businesses. See https://www.facebook.com/business/boost/grants. Details on eligibility and locations are still unclear.
- Kiva Community Developments Finance Institution has changed its lending standards to provide more access to capital for small businesses. See https://www.kiva.org/blog/support-local-businesses-during-the-coronavirus-pandemic. U.S. applicants can have access to a 0% interest loan of up to $15,000.00 with a grace period of up to six months.
- Massachusetts Nonprofit Network has compiled a list of resources, policy updates, and philanthropy/government-led relief efforts to aid nonprofits in responding to COVID-19.
- North Central Chamber of Commerce Emergency Loan Fund. The North Central Chamber of Commerce/Development Corporation is launching an Emergency Loan program to provide loans of up to $20,000 to help small businesses. Loans will be quickly awarded to qualifying local businesses that need access to capital and want to avoid high-interest credit cards or expensive and unregulated online lenders. See https://www.northcentralmass.com/emergency-micro-loan-program-launches/.
- The Boston Music Maker Relief Fund provides financial relief to music makers in the Boston area affected by lost revenue from gig cancellations resulting from public health concerns related to Coronavirus (COVID-19).
- The Boston Singers’ Relief Fund offers emergency relief for singers with gigs cancelled due to COVID-19.
The Federal and State government are providing tax relief to individuals and businesses to help deal with the fallout from the Coronavirus (COVID-19)
Income Tax Relief
On March 18, 2020 the Treasury Department and the Internal Revenue Service (“IRS”) announced special payment relief for individuals and businesses in response to the COVID-19 outbreak. The tax return filing deadline is still April 15, 2020 but tax payments are not due until July 15, 2020. See https://www.irs.gov/newsroom/payment-deadline-extended-to-july-15-2020. If you file your tax return or request an extension of time to file by April 15, 2020, you will automatically avoid interest and penalties on the taxes paid by July 15.
On March 20, 2020, Treasury Secretary Steven Mnuchin also announced that the filing deadline would be delayed until July 15, 2020 and a temporary closure of all in-person Taxpayer Assistance Centers.
This tax payment relief applies to:
- Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates. The IRS will automatically provide this relief to taxpayers and taxpayers do not need to file any additional forms or call the IRS to qualify for this relief.
- Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.
- First Quarter Estimated Tax Payment for 2020. The tax payment relief also applies to estimated tax payments for tax year 2020 that are due on April 15, 2020.
Penalties and interest will begin to accrue on any remaining unpaid balances as of July 16, 2020.
Refundable Payroll Tax Credits
On March 20, 2020, the U.S. Treasury Department, IRS and the U.S. Department announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits to offset the costs of the paid sick required under the Families First Coronavirus Response Act (“Coronavirus Sick Leave Act“) signed by President Trump on March 18, 2020. See https://home.treasury.gov/news/press-releases/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus-related-leave. The details are complicated so consult with your employment attorney and tax adviser regarding paid sick leave under the Coronavirus Sick Leave Act and the tax credits.
On Wednesday, March 18, Governor Baker announced administrative tax relief measures for small local businesses impacted by the COVID-19 outbreak. This tax relief includes postponing the collection of regular sales tax, meals tax, and room occupancy taxes that would be due in March, April and May. These taxes are now due on June 20, 2020. Additionally, all penalties and interest that would otherwise apply will be waived. The Department of Revenue is currently drafting emergency regulations to implement these administrative relief measures, and they are expected to be finalized before Friday, March 20, 2020.
With respect to income taxes, a March 18, 2020 update on the Massachusetts DOR website states that “In the event the Internal Revenue Service (IRS) issues tax relief to taxpayers with federal filing obligations, DOR is prepared to follow the IRS in offering similar relief for taxpayers with Massachusetts tax filing obligations. ” See https://www.mass.gov/info-details/important-covid-19-coronavirus-response-update-from-dor. Accordingly, the DOR should follow the IRS’s tax relief for when to file and pay Massachusetts income tax.
Many businesses have been forced to terminate employees, offer reduced hours or place workers on furlough due to the economic impact of the Coronavirus (COVID-19). The Massachusetts Executive Office of Labor and Workforce Development (“EOLWD“) and the Department of Unemployment Assistance (“DUA“) (in coordination with the U.S. Department of Labor (“DOL“)have taken several steps to assist workers and employers. See .
Some of these steps include:
Waiver of One Week Waiting Period for Unemployment Benefits.
Effective March 10, 2020, an person does not have to wait one week before filing for unemployment benefits. This waiver expires 90 days after termination of the COVID-19 state of emergency declared by Governor Banker on March 10, 2020.
Current Unemployment Claims
The following requirements related to filing and adjudicating current unemployment claims are waived or excused:
- All requirements to attend seminars at the MassHire career centers;
- Any deadlines missed by employers and claimants due to the effects of COVID-19 may be excused under DUA’s good cause provision;
- Employers whose businesses are severely impacted by COVID-19 can request extensions for filing and paying unemployment contributions;
- “Worksearch” requirements will be appropriately interpreted to permit claimants affected by COVID-19 to collect benefits;
- All appeal hearings will be held by telephone only.
Temporary Workplace Shutdowns
EOLWD and DUA also filed emergency regulations that allow people impacted by COVID-19 to collect unemployment benefits if their workplace is shut down and expects to reopen. This applies to all employees (full and part time) who are impacted by such shutdowns. The following conditions apply to temporary shutdowns:
- Workers must remain in contact with their employers during the shutdown ;
- Workers must be available for any work their employer may have for them that they are able to do
- An employer may request to extend the period of the covered shutdown to 8 weeks, and workers will remain eligible for the longer period under the same conditions described above.
- If necessary, DUA may extend these time periods for workers and employers.
Self Employed Individual and Contract Employees
Self-employed individuals and 1099 contract employees are not typically eligible for unemployment benefits. But if the President of the United States makes a disaster unemployment declaration for Massachusetts or nationwide, the self-employed and 1099 contractors would become eligible for unemployment assistance. This assistance would be available immediately upon declaration and press release announcement.
ADDITIONAL SMALL BUSINESS RESOURCES
You may have other questions about how to handle the COVID-19 pandemic with respect to your business. Here are some additional helpful small business resources:
U.S. Center for Disease Control and Prevention (CDC)
The CDC website is one of the best small business resources for accurate and updated information about COVID-19. See https://www.cdc.gov/. Below are 2 important pages:
Commonwealth of Massachusetts.
The Commonwealth of Massachusetts website contains detailed information and guidance about COVID-19 and how Massachusetts is attempting to control the virus outbreak and minimize its damage. See https://www.mass.gov/resource/information-on-the-outbreak-of-coronavirus-disease-2019-covid-19). Below are pages with relevant information:
- COVID-19 Unemployment Information
U.S. Small Business Administration
The SBA website contains helpful information about available federal small business resources to help combat the Coronavirus (COVID-19). See https://www.sba.gov . One of the important pages is identified below.
- Small Business Guidance and Loan Resources
U.S. Chamber of Commerce
This website contains detailed small business resources and information to help protect American workers, families and businesses from the Coronavirus (COVID-19). See https://www.uschamber.com/ . Some of the more relevant pages are identified below.
SCORE offers business mentors to advise you on a variety of issues, including about how to prepare and deal with the Coronavirus (COVID-19). See https://www.score.org/. Unfortunately, SCORE mentors are no longer available for face-to face mentoring because of the outbreak. However, they are are still available for remote mentoring.
Massachusetts Small Business Development Center Network
Similar to SCORE and provides free advice to small businesses. The advisers can help small businesses on a variety of issues, including dealing with the ramifications of the the Coronavirus (COVID-19). Notably, SBDC advisers can also help you with Federal Disaster Loan applications. See https://www.msbdc.org
I will update this lit as often as I can. Please let me know if you come across any other helpful small business resources. Good luck and stay safe and healthy. This will pass! Please feel free to contact me if you need help.