May 6, 2020
EDD Programs Providing Assistance to Workers
EDD has shared a presentation of the assistance programs that are offered to workers during to COVID-19. Here is the link for the presentation: https://edd.ca.gov/about_edd/pdf/Assistance-Programs-for-Workers-During-COVID-19.pdf
April 27, 2020
Paycheck Protection Program (PPP) & Economic Injury Disaster Loan (EIDL) Update and Important Links
Paycheck Protection Program
On April 24th, President Trump signed into law additional funding to support American small businesses and non-profits impacted by COVID-19.
As a result, SBA will resume accepting PPP loan applications on Monday, April 27 at 10:30AM EDT from approved lenders on behalf of any eligible borrower.
The PPP has supported more than 1.6 million small businesses and protected millions of hardworking Americans in all 50 states, the District of Columbia, and each territory. During its initial run, the SBA and Department of the Treasury were able to process more than 14 years’ worth of loans in less than 14 days.
With the additional funds appropriated by Congress, tens of millions of additional workers across the nation will benefit from this critical relief.
SBA encourages all approved lenders to process loan applications previously submitted by eligible borrowers and disburse funds expeditiously.
All eligible borrowers who need these funds should work with an approved lender to apply. Borrowers should carefully review PPP regulations and guidance and the certifications required to obtain a loan. Information is found online at www.sba.gov/paycheckprotection
Our Agency is fully committed to ensuring that America’s workers and small businesses continue to get the resources they need to get through this challenging time.
The SBA OC/IE District Office will continue holding daily SBA Live Zoom calls this week at 2 p.m. PT- keep an eye out for a separate message with registration link.
Economic Injury Disaster Loan
With the additional funding provided by the new COVID-19 relief package, SBA will resume processing EIDL Loan and Advance applications that are already in the queue on a first come, first-served basis.
We will provide further information on the availability of the EIDL portal to receive new applications (including those from agricultural enterprises) as soon as possible.
If you are a self-employed individual please visit the EDD website for updated information. Starting tomorrow you will be able to qualify for added benefits if you are self-employed.
Visit https://edd.ca.gov/ for more information!
April 17, 2020
Self-Employed And Need A PPP Loan? The SBA Just Issued New Guidance For You
The SBA has issued Paycheck Protection Program (“PPP”) guidance for self-employed individuals who file an IRS Schedule C with their Form 1040 to report their self-employment income. The guidance comes in the form of an Interim Final Rule that fleshes out the PPP criteria for a self-employed borrower, including the rules for eligibility, calculating the loan amount, and loan forgiveness.
New Executive Order Signed By Governor Gavin Newsom
Governor Newsom Announces Paid Sick Leave Benefits for Food Sector Workers Impacted by COVID-19, Additional Protections for Consumers
- Governor’s Executive Order will benefit workers in grocery stores and fast food chains, and delivery drivers
- Order will give two weeks of supplemental paid sick leave to certain food sector workers if they are subject to a quarantine or isolation order or medical directive
- Order also calls for increased hand-washing measures at food facilities to increase consumer protection
Beware of Scams and Fraud Schemes
Fraudsters have already begun targeting small business owners during these economically difficult times. Please be on the lookout for grant fraud, loan fraud, and phishing! Read more at by visiting the SBA website at https://bit.ly/3bgVGWI
Click below to enlarge infographic.
April 15, 2020
City of Tustin Business Resources Town Hall
The City has partnered with the Orange County-Inland Empire Small Business Development Center (OCIE SBDC) to offer Tustin businesses immediate assistance with accessing the COVID-19 Federal and State disaster relief and loan programs or to connect you to individualized business consultations. All of these services are offered to you free of charge. Please go to: https://ociesmallbusiness.org/ or call 1(800) 616-SBDC.
On Friday, April 17 at 10:00 am, the OCIE-SBDC will be offering a City of Tustin Business Resource Town Hall Webinar. We will be discussing the Economic Injury Disaster Loan, Payroll Protection Program, Disaster Bridge Loan, 7a Forgiveness Program, and other funding opportunities for your business.
See click the image below to see the attachment. The registration link is: https://fullerton.zoom.us/webinar/register/WN_U5TDmx4mSe2n-aNUo1i9zQ
March 30, 2020
Paycheck Protection Program & Economic Injury Disaster Loans
“As you may already be aware, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress on Friday, March 27th. There are many provisions in this act that may affect you personally as well, but I want to address the Small Business Administration’s (SBA) Economic Injury Disaster Loans (EIDLs) and the Paycheck Protection Program immediately.
The Economic Injury Disaster Loans are the first line of support. These loans aren’t new. They’ve always been available in the event of disaster. However, this is the first time a virus or pandemic event has been defined as a disaster. Because of that declaration, businesses in every state and territory are now eligible to apply for Economic Injury Disaster loans. (If you applied before the declaration was made, you may have been rejected because SBA Disaster Loan Assistance was unavailable for Coronavirus related economic impact at the time.)
The SBA offers many favorable terms in their EIDLs:
- Loans are up to $2M
- The term is 30 years
- Interest Rates are 3.75% for small business and (2.75% for non-profits)
- The first month’s payments are deferred a full year from the date of the promissory note.
The EIDLs expanded provisions include:
- EIDLS can be approved by the SBA based solely on an applicant’s credit score (not repayment ability and no tax return is required). Mr. Contreras specified that a prior bankruptcy doesn’t disqualify you.
- EIDLS smaller than $200,000 can be approved without a personal guarantee. They are also not requiring real estate as collateral and will take a general security interest in business property.
- Borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss.
- It expands access to sole proprietors or independent contractors, as well as tribal businesses, cooperatives, and ESOPs with fewer than 500 employees and all non-profits including 501(c)(6)s.
You can apply for these loans directly through the SBA at www.SBA.gov/disaster. There are no loan fees, guarantee fees or prepayment fees. You have to have been in business by January 31, 2020 to qualify, so you can’t start a business now and receive this kind of grant. The SBA also offers other information and programming at www.sba.gov/coronavirus.
The CARES Act’s Paycheck Protection Program Loan Guarantee offers another source of help. Under this program, the SBA backs small-business loans through local lenders.
Here are the particulars of this loan program:
- Offered to small businesses with fewer than 500 employees, select types of business with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(C)(19) veteran organization (have to be in operation before February 15, 2020)
- Self-employed, sole proprietors, freelance and gig economy workers are also eligible to apply (again, you have to be in operation before February 15, 2020).
- Loans are given up to a maximum of the lesser of $10 million, or 2.5 times the average monthly payroll costs – including wages for employees making under $100,000, as well as expenses for paid sick leave, healthcare and other benefits – during the 1-year period before the date on which the loan was made.
- The maximum interest rate under this program is 4%
- The loan term is up to 10 years
- No personal guarantee or collateral is required for the loan
- Payments are deferred up to six to 12 months
- Part of this loan may be forgiven and not counted as income to you, if it’s spent during the first eight weeks on operating expenses.
As with the EDILs, loan forgiveness provisions are generous. Loans are forgiven when the proceeds are used for any of these costs:
- Payroll costs, excluding prorated amounts for individuals with compensation greater than $100,000
- Rent pursuant to a lease in force before February 15, 2020
- Electricity, gas, water, transportation, telephone, or internet access expenses for services which began before February 15, 2020
- Group health insurance premiums and other healthcare costs.
Be careful here. In order for the amounts to be forgiven, you must maintain the same average number of employees for the first eight-week period beginning on the origination date of the loan as you did from February 15, 2019 – June 30, 2019 or from January 1, 2020 until February 15, 2020. If you don’t meet this requirement, the amount forgiven is reduced. You incur additional reductions if you cut compensation for employees who make under $100,000 by more than 25%, as compared to the most recent quarter. (The US Chamber of Commerce offers a step-by-step calculation here).
And of course there’s an exception to the exception: you won’t be penalized for a reduction in employment or wages during the period from February 15, 2020 to April 26, 2020, if you rehire employees that you previously laid off or restore any decreases in wages or salaries by June 30, 2020.
As I mentioned above, you apply for the Paycheck Protection Loan directly through your local lending institution. As a business owner, you must personally certify that your company qualifies as a small business.
Please feel free to reach out to me with questions about these relief programs.
Stay safe and healthy, and protect your business!”
A message from Emily R. Banks, CPA
13821 Newport Avenue, Suite 170
Tustin, CA 92780
Office: (714) 300-8217
Cell: (562) 787-8368