With the Families First Coronavirus Response Act (FFCRA) and the CARES Act passed into law, it’s time to start to apply the contents of each bill to small businesses and startups. As a result, we’re going to keep this small business coronavirus resource guide updated as we gather more information. For now, here is what we have.
Our summary of FFCRA and CARES Act
We have prepared summary information that is relevant to small business owners and startup founders, which you can find here. If you prefer longer form content over slides we also prepared this post.
Paycheck Protection Program loan amount calculator
We have prepared an updated template as of 04/03/2020 (see Update #2 below) that you can use to help estimate the loan amount you may qualify for under the Paycheck Protection Program and will be adding a video explaining how to use the template to our small business coronavirus resource guide as soon as we have it available.
Update: Video can be found here.
Update #2: We have prepared both a trailing twelve months template and calendar year template that you can use to calculate the allowable loan amount and our methodology is consistent with the most recent Treasury guidance as of 04/06/2020. Our previous versions have also been consistent with the CARES Act guidance since 04/02/2020. We are now also providing the trailing twelve months template now that we have clarification that it is allowed.
Paycheck Protection Program loan application
You can find the official application for the SBA Paycheck Protection Program loan here. The official SBA website for this can be found here. The Department of the Treasury has a landing page with resources here but the most relevant information is their summary sheet. We’ve also put together a useful step by step application guide.
Update: As of Thursday, April 2nd the Department of the Treasury released more clarifications on the PPP program. There is also a new PPP loan application called SBA Form 2583.
Update #2: There are several resources out now showing which lenders are accepting applications. You can find a list of banks that Gusto has crowd sourced here. We have also had clients have success submitting applications with FinTech companies such as Lendio, Fundera and Kabbage.
Update #3: The Department of the Treasury released further clarifications as of Monday, April 6th 2020 in the form of an FAQ document, which you can find here.
Using the Employee Retention Credit — VERY powerful for startups and small businesses in certain areas who aren’t facing hardship
The CARES Act brought with it Section 2301 which contains powerful tax credits that startups and small businesses alike should be looking at regardless of whether or not they qualify for the EIDL or PPP loans. You can read our detailed breakdown the Employee Retention Credit for startups here.
If your business is facing a cash flow crunch you may find our simple cash flow forecasting template to be helpful. It can be set to a daily, weekly or monthly interval to help you understand where your cash position will be at a future point in time.
Affiliation rules that may exclude venture and private equity backed companies from SBA loans
There are restrictions in the SBA loan rules that may make some venture backed startups ineligible for funding. The National Venture Capital Association put out a good resource which you can find here. There is also another good article from the folks at Lowenstein Sandler that disagree with some of the positions taken by the NVCA and conclude that affiliate rules won’t exclude venture backed companies in most cases.
Update: The Treasury guidance released on 04/06/2020 provides clarification that venture backed companies with investors who have “control” may still be eligible for the PPP program under certain provisions. More information can be found here.
The team over at Hyde Park Venture Partners put together a great webinar applying the CARES Act to startups specifically. You can check that out here. It goes pretty in depth on the different provisions of the bill and talks through some relevant examples.
If your employees are facing additional hardships due to COVID-19 you may be able to make tax free payments to them under Section 139 of the tax code. We’ve explained more on how that could work here.
IRS information about stimulus checks
The IRS will have some sort of portal that will be released soon for people to update information about their stimulus checks. You can find information about that here. The IRS also has a dedicated page for COVID-19 updates and is updating it regularly. Unfortunately, calling them at this time isn’t going to get you anywhere.
US Senate Committee on Small Business and Entrepreneurship guide for the Paycheck Protection Program (with FAQs)
A short (but helpful) fact sheet on the Paycheck Protection Program issued by the US Senate Committee on Small Business and Entrepreneurship can be found here.
We referenced this in our summary guide that we provided above, but here is the full version of the info graphic style summary put out by the US Chamber of Commerce.
The team over at Gusto has put together a great list of resources for small businesses. Check their site regularly for updates as they are a payroll provider for SMBs and have been very timely in disseminating new information as it becomes available. It will also be interesting to follow how they update their software to accommodate some of the COVID-19 related changes (i.e. payroll tax deferrals, credits, paid leave, etc.).
The National Association of Government Guaranteed Lenders has put out this resource which clarifies that existing and new SBA loan holders will have six months of payments completely forgiven (not deferred) under Section 1112.
Live Oak Bank video and info graphic
The team over at Live Oak Bank, which is a large SBA lender has put together a nice video and info graphic comparing the EIDL and PPP loan programs.
Keep checking back for more information. We will be updating our small business coronavirus resource guide as soon as more relevant information becomes available.
