Small Business Administration (SBA) Paycheck Protection Program (PPP) and Economic Injury Recovery Loan  (EIDL)

FEDERAL PROGRAMS

    -Paycheck Protection Program (PPP)

• Loan amounts can be up to 250% of your average monthly payroll.
• No collateral or personal guaranty is required.
• Proceeds can be used for payroll, certain health benefits, interest on mortgage or rent payments, utilities, and other specified expenses.
• Loans have a two-year term, that can be extended, with a maximum interest rate of 4% (currently 1%, As of April 3, 2020)
• A portion or all of loan may be forgiven by the Small Business Administration and, therefore, would not have to be repaid if used for “forgivable expenses.”
• APPLY THROUGH YOUR BANK (list of approved banks here)

    -Economic Injury Disaster Loan (EIDL)

• Most small businesses are eligible to apply.
• Credit history and ability to repay will be considered.
• Must show economic injury due to coronavirus (COVID-19), not other factors.
• These loans do not go through a lender; they come directly from SBA Disaster Assistance (http://disasterloan.sba.gov).
• There is no cost to apply.
• Eligible entities can borrow up to $2 million at interest rates of 3.75% for small businesses and 2.75% nonprofits; the rates are fixed for the full term of the loan.
• Terms are up to 30 years, no prepayment penalty.
• APPLY HERE

    -Employer Retention Credit

    -Employer Payroll Tax Deferral

MARYLAND PROGRAMS

    -Maryland Small Business COVID-19 Emergency Relief Grant Fund

• up to $10,000,
• Must have fewer than 50 Employees
• Must have gross revenue of less than $5M

COUNTY PROGRAMS

-Montgomery County, Maryland: Public Health Emergency Grant (PHEG)

• Priority for those with a 50% demonstrated revenue loss through the end of March. Does not apply to anticipatory future loss
• Not required to apply for State or Federal aid to be eligible

THINGS TO DO NOW

1. Renegotiate any outstanding debt.
2. Apply for the appropriate program above
3. Make a 13 week cash flow projection for 2-3 different scenarios.

TIPS

1. Time is of the essence as a large portion of available funds are availabe on a "first come first served" basis.
2. For PPP, look at applying with 2-3 banks
3. Apply for EIDL to get $10,000 emergency grant.
4. Employers cannot use proceeds from different programs for the same expense (no double dipping)

DOCUMENTS NEEDED

• Completed application
• Payroll expense verification documents to include:
  • 2019 IRS Quarterly Form 940 and 941 or 944 payroll tax reports
  • Payroll summary report for 2019 and payroll summary for period on or around February 15, 2020 with the following information: 
    • Gross wages for each employee, including officer(s) if paid W-2 wages
    • Paid time off for each employee
    • Vacation pay for each employee
    • Family medical leave pay for each employee
    • State and local taxes assessed on an employee’s compensation
  • If a payroll summary report is not available, employee pay stubs as of February 15, 2020 (or corresponding period).
• Documentation showing total of all health insurance premiums paid by the company/owner(s) under a group health plan.
  • Include all employees and the company owners
• Documentation of all retirement plan funding that was paid by the company/owner(s) – do not include funding that came from employees out of their paycheck deferrals)
  • Include all employees and the company's owners
  • Include 401(k) plans, Simple IRAs, SEP IRAs
  • Self-employed individuals, independent contractors, and sole proprietorships: payroll tax filings for 2019 and year-to-date 2020, 1099-Miscellaneous forms and 2019 and year-to-date 2020 income and tax expense from the sole proprietorship
  • Detailed list with corresponding salaries of all employees outside the United States
• Most recent mortgage statement or rent statement (lease)*
• Most recent utility bills (electric, gas, telephone, internet, water)*

*Required for debt forgiveness to be provided prior to any forgiveness.