CARES and FFRA options for businesses
UPDATED 4/2/2020: The response to COVID-19 is an evolving situation. Details are changing continually. The information below is current as of the posted date. Please watch for updates.
Options for Businesses
Options include loans/grants and payroll tax credits. Utilizing one may exclude another – so weighing your decision is important! This is a summary of highlights – “small print” exclusions and requirements are not included to keep brief. Information is constantly being updated – if you find something new or different, a broken link, or have other feedback, please send my way!
Payroll Protection Plan (PPP) ($349 billion in funds, first come, first served):
Apply at any SBA-participating lending institution
2.5x average monthly payroll for 1-year period before loan is made
Funds can be used for payroll, health benefits, mortgage and certain other interest, rent, utilities
2-year maturity, 1% interest (originally up to 10-year maturity, max 4% interest rate)
Deferral period at least 6 months, up to one year
Forgiveness: for 8-week period beginning with origination, sum of payroll costs*, mortgage interest, rent, utilities
- Reduced if 2020 employees < 2019 employees for same 8-week period or > 25% reduction in salaries
- Application process requires documentation; 60 days for lender decision
- * Payroll cost includes compensation (not > 100K salary), healthcare, retirement, less specified payroll taxes.
Employee Retention Credit not available for PPP loan recipients
Payroll Tax Deferral not available for PPP loan recipient with loan forgiveness
Apply at any SBA-participating lending institution
See Program Overview table on page 3 here
SBA Sample Application Form
Department of Treasury PPP Borrower Information Fact Sheet
AZ Approved Lender List
Economic Injury Disaster Loans (EIDL):
EIDL Loan and Advance SBA link
Lower interest loans up to $2 million, principal and interest deferral up to 4 years
For expenses (operating, payroll) that could have been met had disaster not occurred
Can also apply for PPP - but cannot use EIDL and PPP funds for same purposes
Advance available via Economic Injury Emergency Grant – see below
EIDL can be refinanced into PPP loan
SBA Economic Injury Emergency Grant Program:
Advance of up to 10K to small business/nonprofit – in as little as three days
Apply for EIDL (Economic Injury Disaster Loan), then request advance
Payroll Tax Deferral:
Employer portion of FICA taxes can be deferred for 2020, paid 50% by 12/31/21 and 50% by 12/31/22
Payroll Tax Deferral not available for PPP (Payroll Protection Plan) loan recipient with loan forgiveness
Employee Retention Tax Credit:
If fully or partially suspended operations OR 50% drop in revenues
50% credit for wages paid to furloughed or reduced-hour employees
Limit is 10K per employee (but credit is 50%, so essentially 5K max)
Reimbursed via reduction to payroll tax deposit; excess via accelerated refund from IRS
Employee Retention Credit not available for PPP (Payroll Protection Plan) loan recipients
Families First Act (FFCRA) Reimbursement for Covid-Related Leave:
Emergency Paid Sick Leave - effective 4/1/2020
max $511/day related to direct COVID-19 illness/symptoms x days missed up to 10
max $200/day related to care for someone w/ direct COVID-19 illness/symptoms x days missed up to 10
max $200/day related to caring for child due to school/child care provider closure x days missed up to 10 weeks (subject to 2-week waiting period during which employer sick time can be used)
Reimbursed via reduction to payroll tax deposit; excess via accelerated refund from IRS (Form 7200)
FFCRA reimbursement can be used in conjunction with CARES Act provisions, but PPP funds cannot be used toward payments covered under FFCRA.
WA Business Resources
Take care and stay safe!