COVID-19 Financial Assistance Resources for US and Canadian Businesses to Use Now
All businesses are painfully aware of the impact the COVID-19 pandemic has had on them, regardless of size or industry. However, while the struggle continues, many businesses are not reaching out for assistance—because they fear they won’t qualify, believe things aren’t “bad enough” yet, haven’t prioritized the effort, or simply don’t want to ask for help.
If your business is being impacted but is holding off on getting assistance, you are missing out on an important opportunity. Continuing to wait increases the risks you are facing, making it more difficult to mitigate damage and impacting your ability to bounce back after the crisis has passed. Availability of funds may be limited, so applying early increases your chances of receiving funds.
The faster you act, the faster you can stabilize and begin working on your recovery. Following is a list of reputable resources to help your business stay afloat until you can reopen or return to normal operations.
Before Reaching Out to Resources…
The first priority for all of us is safety. The Centers for Disease Control offers guidance to employers to help you protect employees and customers while maintaining operations.
We also strongly recommend you seek advice from your accountant, tax advisor, creditors, and banking institutions to discuss your specific issues and needs. The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Association (NCUA) have encouraged their member banks and credit unions to help meet the needs of customers affected by the coronavirus, including waiving fees on late or missed credit card or loan payments, allowing customers to defer or skip some payments, extending payment due dates, and more.
COVID-19 Funding Sources for Impacted Businesses: U.S.
The U.S. Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020, containing over $350 billion in relief for American workers and small businesses. In addition, state and local governments along with other organizations are offering help in the form of grants, low interest loans, payment extensions, fee waivers, tax deferments, and more.
Following is a list of resources to consider:
Small Business Administration (SBA) COVID-19 Relief Programs and Loans
Under the CARES Act, the SBA offers several relief options, including:
Paycheck Protection Program – Provides loan forgiveness for retaining employees. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities. Check with your bank to find out if they are accepting applications for this program.
EIDL Loan Advance – Provides up to $10,000 of economic relief to businesses experiencing temporary difficulties. This loan advance will not have to be repaid.
SBA Express Bridge Loans – Enables small businesses that currently have a business relationship with an SBA Express Lender to access up to $25,000. This loan will be repaid in full or in part by proceeds from the EIDL loan.
SBA Debt Relief – A financial reprieve for small businesses that have applied or are applying for SBA loans:
- The SBA will automatically pay the principal, interest, and fees of current 7(a), 504, and microloans for a period of six months.
- The SBA will also automatically pay the principal, interest, and fees of new 7(a), 504, and microloans issued prior to September 27, 2020.
For more information on SBA loans and how to connect with a lender, visit the SBA Loans website.
U.S. Chamber of Commerce COVID-19 Resources and Guidance
The U.S. Chamber of Commerce offers resources and guidance to small businesses on their Coronavirus resource page. You can also download their Coronavirus Small Business Guide. Be sure to check your state and local Chambers for additional financial assistance and loan options available in your area.
Tax Deferments and Credits to Provide Relief During the COVID-19 Crisis
The IRS has extended the deadline to file federal tax returns to July 15, 2020. The deadlines for payment of taxes due (up to $10 million), and estimated taxes for April have also been moved to July 15.
The IRS is also offering a refundable tax credit for employers in businesses forced to close or partially close or who suffered more than 50% loss of gross revenue. The credit is designed to encourage businesses to keep employees on their payroll and represents a tax credit of 50% of up to $10,000 in wages paid by an eligible employer whose business has been financially impacted by COVID-19.
State and Local Business Assistance for Businesses Impacted by COVID-19
State and local municipalities are offering assistance to businesses in their jurisdictions. Check with your governor’s website for the latest information about relief available in your area. Use the National Governors Association list of governors’ websites to start your search. Also, check with your local government for any other assistance options.
COVID-19 Funding Sources for Impacted Businesses: Canada
Canada’s COVID-19 Economic Response Plan offers support for affected individuals, businesses, and industries, including:
Canada Emergency Wage Subsidy (CEWS)
The CEWS subsidy covers 75% of an employee’s wages—up to $847 per week—for a 12-week period, from March 15 to June 6, 2020. The program is for employers of all sizes and across all sectors who have suffered a drop in gross revenues of at least 15% in March, and 30% in April and May. The government also instituted a 10% reduction in the payroll deduction for three months.
Deferred Tax Payments for Canadians
Income tax amounts are deferred until after August 31, 2020. No interest or penalties will accumulate on these amounts during this period. Likewise, sales tax payments are deferred until June 30, 2020.
Canada Business Credit Availability Program (BCAP)
The BCAP provides access to capital with $40 billion of additional support through the Business Development Bank of Canada (BDC) and Export Development Canada (EDC). In addition, the Canada Emergency Business Account offers interest-free loans of up to $40,000 to small businesses and not-for-profits, to help cover their operating costs during a period where their revenues have been temporarily reduced.
More Help for Canadian Businesses
The Canadian government is supporting affected industries by offering various subsidies, loans, and waiving fees. Industries include agriculture, fisheries, airports, and air carriers. In addition, the Canadian Federation of Independent Business (CFIB) COVID-19 Small Business Help Centre provides a list of additional resources for Canadian small businesses, including resources by province.
Contact us for information on how ArcherPoint can assist you with business continuity services during this time.