This afternoon I logged on to a conference call along with many other small business owners across the country to hear from the Small Business Administration and a number of White House Advisory staff.
On this call we heard from a number of government agency leaders on the kinds of help available to small businesses, employers, and employees during this national emergency.
First up was Dr. Sylvia Trent-Adams, who is the Principal Deputy Assistant Secretary of Health at the Department of Health and Human Services. She stressed that every single citizen needs to do their part to help slow the spread of this virus. It is our civic duty to do everything in our power to practice social distancing in the hopes of keeping our hospitals and medical professionals from being overwhelmed as they do their part to treat those who become critically ill. Please remember that 80% of people infected with Covid-19 will only suffer minor to moderate symptoms. Most people will not need to seek medical care. It is our responsibility to make sure that the small percentage of people who will need medical intervention or critical care are able to get it. Take this seriously. Be calm, be kind, and do what your local, state, and federal administrations ask of you in this difficult time.
Dr. Trent-Adams discussed the ongoing development of drive-through testing initiatives nationwide. These sites will be run by the states and private offices in partnership with the federal government. Eligibility currently varies by location, but they are actively working towards sides in every state.
As we all go through this together, please follow the March 16th guidelines and recommendations from the White House in addition to those issued by your state and local offices.
Next we heard from Dan Kowalski, Counselor to the Secretary of the U.S. Department of the Treasury about assistance for employers. If you have employees, there is assistance for you to pay wages, health insurance, and payroll taxes. These programs are still being finalized, but will allow for two weeks of paid sick leave for your employee(s). If the employee themselves is sick, this assistance will reimburse employers for 100% of that employee's wages. If someone in the employee's house is ill and the household must self-isolate, 2/3 of the employee's wages can be reimbursed up to $200 per day for 80 hours (two weeks). If the employee must stay home on family leave due to school or other closures, again, 2/3 of the employee's wages are reimbursable up to $200 per day for a maximum of$10,000 for six weeks up to 12 weeks of paid family leave time. This assistance will be reimbursed as tax credits. If you pre-pay taxes, such as on a quarterly basis, employers can use accrued payments to pay for the sick leave. This procedure would require employers to pay out the employee wages and then file a claim with the federal government. The plan is for employers to receive immediate reimbursement, hopefully through a direct deposit, in order to streamline the process as much as possible. This is a temporary benefit and expires on 12/31/2021. Even if your company of under 500 employees already has paid sick leave, you can still be reimbursed through this program.
Federal Business Interruption loans are also being made available for companies who have been mandated to shut down or are unable to remain open during this crisis. These loans are 100% guaranteed by the federal government and available to qualified business under 500 employees. Loans are capped at a maximum of approximately $10 million per loan. In an effort to keep people employed and not overwhelm the unemployment offices, there is a loan forgiveness component available to companies who keep their employees on payroll through this crisis. If your company retains all workers through this, loan forgiveness is available for the full cost of those workers' payroll expenses.
After a brief moment of technical difficulty, Jovita Carranza, administrator of the Small Business Administration (SBA) joined the call as just one of her many outreach calls today. She stressed that nationwide, staff from the Disaster Assistance offices, as well as district offices of the Women's Business Center, Small Business Development Center, and SCORE were all on board and doing everything they could to help small businesses through this very difficult time. They are working quickly to set up webinars, conference calls, and online classes to help businesses answer their many questions. The SBA is working to expedite disaster relief loans for small businesses affected by this economic disaster. Many states have already been approved for loan programs and the SBA expects all 50 US states to be approved to accept applications. They are actively working to cut out much of the red tape that is normally a part of this process given the absolutely unprecedented situation we find ourselves in across the globe. In the event that a qualified business receives a notice that their loan application has been denied, Ms. Carranza assured us that all district offices are being set up to execute follow-up calls within a day or two to help the applicant get approved or to match them with an alternative lender. All states are being encouraged to coordinate with the SBA to make this process as easy to navigate as possible.
Ms. Carranza also stressed that we should not let this situation crush people's dreams of starting a business. Business counselling is still available throughout this time. For this, as well as disaster relief related information, the SBA is constantly updating their website on a daily basis. They are currently averaging 400,000+ calls a day and approximately 20,000 loan applications have already been submitted. In the event that there is some kind of website crash or service breakdown due to volume, the SBA has already partnered with FEMA who has sourced an additional 5,000 workers to help with calls and assistance.
After Ms. Carranza headed off for another call we heard from an assistant to the Secretary of the Labor Department (DOL) named Nick (apologies for not being able to catch his last name), who talked about what comes next. He urges small business owners to contact their local and state Workforce Development office. They can help you understand the unemployment insurance program. This is a state and federal partnership. On March 11, the DOL issued guidelines to the states for this program. While eligibility varies by state, the DOL is working hard to make sure states understand the flexibility they have in interpreting the written eligibility guidelines during this emergency. Employees are eligible if their employer is prevented from operating during this time, if the employee is quarantined with the expectation of returning to work after, or is caring for a family member who is quarantined. Federal law does NOT require the employee to quit in order to apply for benefits. Given the scale of this situation, lines are often full and wait times can be long. Nick encourages people to continue to apply. Don't be discouraged.
We also heard from Alejandro Contreras, Director of Preparedness, Communications and Coordination at the SBA's Office of Disaster Assistance. He discussed the up to $2 million, low interest, long term Disaster Relief loans available to small businesses that can be used for working capital to cover their normal operating expenses in the event of lost revenue, anticipated lost revenue, lost workforce, or supply chain disruption due to Covid-19. Businesses qualify based on their eligibility (being a small business or privately held 501c3), credit (these loans are backed by the federal government and are much more flexible than a traditional lender), and repayment ability (calculated based on the business's pre-disaster conditions). One major concern that has been voiced by a number of business owners I have talked to about this loan program is in regard to repayment of the loan. How are businesses expected to afford monthly payments while they are shut down due to the coronavirus emergency? Director Contreras assured those of us on the call that these loans come with a one year deferment, meaning that your first loan payment isn't due until 12 months after your loan is issued.
After each of our speakers had presented their information and resources, the call was opened up for a brief question and answer session. Some of the information covered dealt with clarifying who was eligible for disaster relief loans. Loans are available for eligible small businesses under 500 employees, including franchises, and privately held 501c3s, although as this is an economic disaster and not a natural disaster of some kind, churches and religious groups are not eligible. If you already have an SBA loan, you can still apply for a disaster relief loan, however you are not able to use the disaster loan to refinance a preexisting loan.
Approximately 22 states have already been approved to accept Disaster Relief loan applications and SBA officials expect all 50 states to be approved by the end of the week.
Other questions revolved around how to have conversations with landlords during this time of economic stress. One caller wanted to use what money he had to be able to continue paying his employees, but that would mean he was unable to pay his rent. Speakers from the SBA were quick to reinforce that funds from Disaster Relief loans can be used for all kinds of regular expenses including paying rent. Loan funds are not instant, so it is the responsibility of individual business owners to negotiate with their landlords in order to temporarily defer payment if necessary.
There are multiple loan options available to businesses during this time. In addition to the SBA Disaster Relief loan, businesses can also apply for Business Interruption loans, which are the up to $10 million loans that Dan Kowalski from the Treasury Department had mentioned.
There were approximately 2000 people on today's call and we have all been encouraged to help get this information out to our business communities. Please help spread the word and provide these links to other businesses that you know who have been impacted.
Before we wrapped up today's call, which we were assured was the first of many of these that will take place, we also heard from Chris Wilkerson, the Executive Director of Opportunity Now, who wants to work with businesses engaged in workforce development, economic empowerment, and local and national non-profits to support small businesses with workforce growth and employee retention. He encouraged us to keep fighting for our businesses. We will get through this.
Small businesses are beacons of hope in this country. When we do well, the country does well.
Below you will find a summary of the resources provided on this call. Please check in regularly if your business has suffered during this pandemic.
Center for Disease Control (CDC)
www.sba.gov/disaster - Apply for a Disaster Assistance Loan
Women's Business Center
Small Business Development Center
Department of Labor
www.careeronestop.org - Search by state for instructions on filing for unemployment benefits.