The COVID-19 pandemic is spreading rapidly, with new updates constantly. As a business, it is hard to know what to do and how to mitigate risk, protect employees, support customers and keep your business running.
Here is a cheat sheet of ways to keep your business afloat and help that is out there to keep businesses open and employees.
Customers are understanding that the crisis is affecting the way business is being done. Communicate with them to let them know the current standing, whether you are open or not, different hours if they know what to expect they will be more understanding.
Business Interruption Insurance
Business Interruption insurance might be an option if you have substantial business losses as a result of shutting down because of the pandemic. Contact your insurance broker as to what qualifies and if it will cover you for this emergency.
Shift Your Business to Online
As the majority of storefronts are closed, it is time to emphasize a stronger online marketing strategy. If you sell products, make sure that your site is ready to sell and engage with customers virtually. Is your social media performance strong? It may be time to improve your brand awareness across all platforms. Start working on putting your email list to good use and incorporating videos to reach new leads.
The Paycheck Protection Loan Program
Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated almost $350 million billion to help small businesses keep workers employed during the pandemic. The Paycheck Protection Loan Program is part of the CARES Act. These loans may be forgiven if businesses maintain their payrolls during the crisis or restore payroll after.
Who is Eligible for Paycheck Protection Loan?
- A small business or A 501(c)(3) with less than 500 employees.
- An individual who operates as a sole proprietor or/an independent contractor.
- An individual who is self-employed who regularly carries on any trade or business.
- A 501 (c)(19) Veterans Organization that meets SBA size standard.
The 500 employees include all employees, full-time, part-time, and any other status. The loan can be for 2.5 months or average payroll or $10 million, whichever is less. To apply, click here.
Economic Injury Disaster Loan
The CARES Act specifically expands the Small Business Administration’s long-standing Economic Disaster Loan Program (EIDL). The creation of the EIDL program is to assist businesses, renters, and homeowners located in regions affected by declared disasters.
Who is Eligible for the Economic Injury Disaster Loan?
- Businesses with less than 500 employees.
- An individual who operates as a sole proprietor.
- An individual who operates as an independent contractor.
- Cooperatives, ESOPs, and tribal small businesses with fewer than 500 employees.
- In general most private nonprofits.
The maximum is a $2 million working capital loan at a rate of 3.75% for businesses and 2.75% for non-profits with up to a 30-year term. It is important to realize that the payments are deferred for one year. To apply, click here.
Families First Coronavirus Response Act (FFCRA)
The FFCRA contains eight divisions designed to provide assistance to covered employees and households with eligible children affected by COVID-19 pandemic. Things that are included in the Act are expansion of unemployment benefits, USDA assistance programs, and emergency paid sick leave.
What Does FFCRA Mean for Businesses?
The FFCRA affects businesses in two main ways.
- Paid Sick and Family Leave – The law requires all private businesses with fewer than 500 employees to provide emergency paid sick or family leave for employees affected by the coronavirus outbreak.
- Employer Tax Credits – The law provides employers with fewer than 500 employees with refundable payroll tax credits to cover the cost of providing paid sick leave and the paid FMLA leave to their employees. Employers will receive 100% tax credit against their payroll tax liability. The credit specifically includes Health Insurance costs. In this case reimbursement will be quick and easy to attain.