Federal, State and Private Resources Available To Small Business Owners to Help Them Survive the Coronavirus



By James J Talerico, 

Numerous employer tax credits, disaster loans and income tax deferments in addition to a plethora of private resources are now available to assist small business owners through this crisis.

Several packages have been approved by Congress and signed into law by President Trump to help small businesses.  The “Cares Act” provides significant relief to both individuals and small businesses.  For example, the act will be covering small business payrolls and up to 25% of a business’ overhead expenses for a period of eight-(8) weeks.  The Cares Act will also be furnishing $1,200 payments as direct deposits to individuals, extending unemployment benefits, waiving early withdrawal fees & raising loan limits on 401Ks, modifying net operating loss rules, increasing interest expense limitations, and providing for free coronavirus testing.  Given the scope and breath of the “Cares Act,” professionals, in particular, might want to google “S.3548 Cares Act” for more details.

“The Families First Coronavirus Response Act” is, furthermore, offsetting mandatory paid sick and paid leave costs for employers with 50 or more employees with an employer tax credit equal to 100% of the benefits paid out. 

The Coronavirus Preparedness and Response Supplemental Appropriations Act is providing $8.3 billion in emergency funding for federal agencies, including $7 billion in disaster assistance loans to assist small businesses impacted by COVID-19 through the Small Business Administration (SBA.)  Small business owners should consider these disaster loans an additional safety net for their company.

The SBA is offering designated US states and territories with low-interest federal disaster loans of up to $2 million to help with fixed debts, payroll, accounts payable and additional bills. The interest rate is 3.75% for small businesses (and 2.75% for non-profits.) Businesses with credit available elsewhere will not eligible for these loans.  SBA disaster loan terms vary but can be as long as 30 years.

The SBA is also deferring SBA loans from previous disasters through December 31, 2020.  Hence, borrowers of past home and business disaster loans do not have to contact the SBA to request deferment.

Taxpayer will, moreover, have an additional 90 days to pay their 2019 taxes.  An income tax deferment extends the April 15 deadline for businesses without penalties for 90 days.  This gives business owners the chance to use these income tax liability funds to cover other expenses.  

Tax deferments apply to Federal income tax payments on self-employment income due on April 15, 2020 for the 2019 tax year, and on Federal estimated income tax payments on self-employment income due on April 15, 2020.  Keep in mind, however, that you still must file your business income tax returns by April 15.

The Export-Import Bank of the United States (EXIM) has, furthermore, announced relief measures for U.S. exporters and financial institutions that include waivers, deadline extensions, streamlined processing, and flexibility for its customers for an initial period of 30 days, with the possibility of more.

In addition some state governments are offering aid packages, especially states with mandatory sick day requirements. Check with your state for more details. 

Banks and credit card companies like Wells Fargo, Citi Bank, and Capital One have announced that they will be working with their customers. Citi Bank has also waived early CD withdrawal penalties.

In addition to committing to work with customers, JP Morgan, Chase and Wells Fargo have donated millions to help with different public relief efforts. 

Facebook said it is offering $100 million in grants to small business and many other businesses — such as Amazon, Intuit, Yelp, et. al. — are assisting the small business sector.  Government agencies like SBA, SCORE and non-profits, like the national federation of credit counseling are also offering services to assist small business owners through this crisis.  And high-profile business people like Mark Cuban are also offering relief in the form of business advice.

On Friday, The Dallas Morning News published an informal poll of business owners about the impact of the Coronavirus on small businesses.  This study revealed that:

  • 96% of Small Businesses will be effected by this crisis;
  • 75% anticipate lower sales;
  • 51% said they can last 0 to 3 months; and
  • 53% of employees can’t telecommute.

Other studies show similar results, and also point to supply chain issues with 33% of business owners because of the coronavirus. 

So, the Coronavirus is going to have a significant impact on small business, but the government, publically traded and privately held businesses and others are stepping in and offering several solutions to help small businesses through this crisis. 

For the latest details, stay informed by watching the news, searching the Internet, and talking to your banker, CPA, and other business advisors.

About the Author

A nationally recognized small to mid-sized business (SMB) expert, Jim Talerico has consistently ranked among the “top small business consultants followed on Twitter.” With more than thirty – (30) years of diversified business experience, Jim has a solid track record helping thousands of business owners across the US and in Canada tackle tough business problems and improve their organizational performance.

A regular guest on the Price of Business on Bloomberg Talk Radio, Jim’s client success stories have been highlighted in the Wall St Journal, Dallas Business Journal, Chicago Daily Herald, and on MSNBC’s Your Business, and he is regularly quoted in publications like the New York Times, Dallas Morning News, Philadelphia Inquirer, and INC Magazine, in addition to numerous, other industry publications, radio broadcasts, business books, and Internet media.

Jim Talerico is a certified management consultant CMC©, an honor bestowed on only 1% of all consultants worldwide.

Increase your knowledge of the latest small to mid-sized business (SMB) trends by tuning into Jim’s regular appearances on the Price of Business !

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