Small Business Funding Agreement Reached by Congress and Treasury

Today Treasury Secretary Steven Mnuchin and Congressional leaders reached a deal that will add approximately $484 billion to the $2 trillion plus CARES Coronavirus response legislation passed at the end of March 2020.  The initial $322 billion for small business loans and Payroll Protection Plan (PPP) loans in the CARES Act ran out of funding within 2 weeks. Today’s agreement includes $60 billion earmarked for small-business disaster loans and grants, $75 billion in emergency funding for hospitals, $25 billion for testing, and more than $320 billion in additional funding for the PPP.

The legislation will include a requirement that $60 billion of the money for the small business loans be set aside for smaller lenders. In the last two weeks we learned that it’s extremely important to be working with the right banks and the right relationships.  The difference between who was approved for PPP loans and who was denied oftentimes came down to the banking institution itself, rather than need.  Small businesses that filed with community banks seemed to have more success. Do not wait until the legislation is passed to get your documentation together for a PPP application, rather establish the bank relationship now so you can move quickly. Please don’t hesitate to reach out if I can assist you by connecting you with a community bank that is open to new clients for PPP loans.

Keep in mind that for now, this is just an agreement and legislation has not been passed. The Senate is expected to pass the expanded funding legislation by unanimous consent today. House leaders are planning a vote on Thursday. President Trump has tweeted that he plans to sign in to action what Congress approves.

While this relief is welcome news to many small businesses, the issue of funding governments and municipalities will not be addressed in this new agreement. Lawmakers have already begun issuing proposals and demands for the next round of funding even though this round has yet to be signed.

As you face the day to day questions of balancing business concerns, the law, and health and safety, the firm is here to assist in any way we can.

Do You Have a Pandemic Plan in Place Yet?

Almost every day I’m asked, “when will things go back to normal?” My answer is simple: no one knows, so let’s plan for that.  As federal, state, and local governments begin transitioning back into everyday activities, businesses should take this time to draft a Pandemic Plan.

Unlike the natural and war time disasters our country has experienced in the past, COVID-19 is not confined in either space or time.  Until a vaccine is readily available and disbursed (many say 18-24 months), we cannot anticipate a return to work as we once knew it. The social-distancing strategy is working, but at such an economic cost that it can’t be sustained indefinitely. So when restrictions relax, we will likely see some states or cities that experience a similar resurgence in cases as when Singapore, China, and other Asian states first eased their restrictions.  Moreover, even though this is the first worldwide pandemic in a century, more regionalized pandemics have become increasingly common.

Those businesses that will survive and thrive during this time will have prepared and implemented a Pandemic Plan.  These plans are similar to business continuity plans, or as we call them in Florida, hurricane plans. Right now, the whole country is experiencing business restrictions, but when national restrictions are relaxed and the differences between states and municipalities become more pronounced, customers and clients may be less understanding of delays in service when they are not experiencing the same restrictions in their area.

Every business will have different needs, but at a minimum, your written Pandemic Plan should establish:

• a leadership committee that will implement and execute when timing is necessary,

• contract revisions for services to include pandemic language,

• payroll procedures to ensure employees are being paid,

• pay policies for employees so they know what to expect,

• succession plans in the event leadership is infected or otherwise debilitated,

• new processes for how to deliver goods/services to customers in the event they are unaffected by the pandemic when your business operation is affected, and

• expectations for your employees of what would be different in the next scenario (if anything) and what would remain by disbursing the written plan and educating employees in advance.

Please reach out to the firm if we can help you draft your Pandemic Plan. As you face the day-to-day questions of balancing business concerns, the law, and health and safety in the Coronavirus era, the firm is here to help.

Tracking the Moving Targets on PPP and EIDL Loans

Many clients have been working through the nuances of whether to apply for the Economic Injury Disaster Loan (EIDL) or the Paycheck Protection Program (PPP).  These financial assistance programs are tied to the passage of the CARES Act and are meant to assist small businesses.

One of the biggest challenges in determining whether to apply is that the guidance on these loans continue to change.  For example, while the EIDL was originally thought to provide a $10,000 grant to applicants, it has now been modified so that small businesses may only receive $1,000 per employee up to 10 employees.

As of today, the SBA released the following comparison of the two most requested programs:

• Paycheck Protection Program

  • Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for certain operating expenses (amount of any EIDL advance is not forgivable)

  • Up to $10 million; 1% interest rate

  • Forgivable

  • 2 year maturity

  • First payment due in 6 months.

• Full EIDL Loan

  • To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL advance is forgiven)

  • Up to $2 million; 3.75% for businesses; 2.75% for non-profits

  • EIDL Loan not forgivable. EIDL Advance is forgiveable.

  • 30 year maturity

  • First payment due in 1 year.

When looking at loan options, don’t forget to look into your state’s SBA and your municipality.  Tampa just announced an emergency relief fund today.

Please reach out to the firm if we can help you with understanding the options available under the CARES Act. As you face the day-to-day questions of balancing business concerns, the law, and health and safety in the Coronavirus era, the firm is here to help.

Terin Appears on NBC to Discuss Impact when Employees Test Positive for COVID-19

Terin appeared on the local NBC affiliate last night to discuss what employers have to share with their employees when there is a positive COVID-19 diagnosis among the staff.

https://www.wfla.com/8-on-your-side/coronavirus-in-palmetto-several-residents-staff-members-test-positive-at-nursing-home/?fbclid=IwAR0xelO0SxDjZeQcyj55uAHDNZSAejAMsRPxb0CZvtYewQK-BJbptUJwuTQ

This Week's Top 10 Questions from Employers During the COVID-19 Era

One week since the Families First Coronavirus Response Act (“FFCRA”) went into effect, and businesses and employees are still struggling to understand the new law.  Here are the top ten questions the firm received over the last week and the abbreviated answers.

1. Does the FFCRA apply to businesses with less than 50 employees?

   • Yes! While there is an opportunity for some small businesses to receive an exemption, this is not automatic and needs to be documented.

2. Do I have to pay an employee for leave under the FFCRA if they were furloughed?

   • No, but you need to make sure you understand what a furlough is, since the media has sometimes described the concept inaccurately.

3. My employee has expressed concerns about coming to work and did not show up today, can I fire him?

   • Maybe, first let’s look at the employee’s reason why and whether you are obligated to provide them with information on FFCRA leave.

4. Will the tax credit for paying employees leave under the FFCRA be automatic?

   • No, you will be required to present documentation. You should start preparing for this now.

5. Can I require my employee to take unused PTO or sick leave before using leave under the FFCRA?

   • No. You should consider modifying your leave policies in light of the additional leave under the FFCRA’s emergency paid sick leave requirements.

6. Do I have to keep records of an employee’s request for FFCRA leave?

   • Yes. Regardless of whether you grant or deny a request for paid sick leave or expanded family and medical leave, there are several requirements for what must be documented by the employer.

7. My worksite is closed. Do I have to provide leave under the FFCRA?

   • No, not while it is closed. The answer, however, gets complicated if only part of a larger operation or site is closed.

8. If my employee already used his 12 weeks of FMLA leave for the year, must I provide an additional 12 weeks under the FFCRA’s Extended FMLA?

   • It depends on whether your company policy calculates FMLA leave on a rolling or calendar basis.  Extended FMLA expires December 31, 2020.

9. We have been deemed an “essential business” by our state or local government, are we now exempt from the FFCRA requirements?

   • No. FFCRA only exempts health care providers and emergency responders.

10. My employee has elected to take leave under the FFCRA because they are quarantined and waiting on a COVID-19 diagnosis. Do I have to notify my other employees and customers?

    • This is a complicated question that needs to be addressed on a case-by-case basis. We should discuss.

As you face the day-to-day questions of balancing business concerns, the law, and health and safety, please contact me if you have any questions.