Business Resources During COVID-19
Resources to Help Keep Your Business Afloat
COVID-19 has taken a toll on nearly all industries, but it has had an even more devastating affect on small to medium businesses which are more vulnerable to economic destruction in times of crisis. These businesses collectively play an important role in supporting our global economy. It is imperative that during these difficult and uncertain times business owners have access to government grants, aid and assistance. . Outlined below is a summary of the current state and federal programs available to assist businesses of all sizes.
Coronavirus Preparedness and Response Supplemental Appropriations Act:
In an effort to minimize the financial implications to US companies are facing President Trump signed the Coronavirus Preparedness and Response Supplemental Appropriations Act, which provides $50 billion in low-interest loans to afford access to desperately needed capital to companies affected by COVID-19. However, despite the fact the majority of states have enacted some form of legal cannabis program, the SBA explicitly excluded cannabis businesses from access to these emergency funds The SBA’s prohibition does not extend to industrial hemp companies as The Farm Bill legalized industrial hemp on a federal basis in 2018. Learn more here.
Families First Coronavirus Response Act:
Included in the Families First Coronavirus Response Act is the Emergency Family and Medical Leave Expansion Act, which provides ongoing family paid leave time for up to 12 weeks. Under this program employers are able to continue to pay an employee who is unable to attend work as a result of: (a) a positive COVID-19 diagnosis, , (b) lack of child care for a school age child, (c) a shelter-in-place or stay-at-home order. Employers will then be reimbursed for the continued payment up to 12 weeks.
The Emergency Paid Sick Leave Act also falls under this category and applies to businesses with fewer than 500 employees. Pursuant to this program qualifying companies will be reimbursed as follows:
- $511 per day and $5,110 if an employee is ill or subject to quarantine; and
- $200 per day and $2,000 if an employee is caring for others.
Finally, the Pay Tax Credits under this act requires the IRS refund employers 100% of the costs paid for employee sick leave, either through payroll tax credits and/or direct payment refunds.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act:
The CARES Act grants small businesses the ability to receive small business interruption loans to cover payroll expenses, health care benefits, employee salaries, rent, utilities, and interest on mortgage debt.
There are two programs under this act, including:
1. The Paycheck Protection Program which allows for loans issued by traditional commercial lenders of up to $10 million, with 4% interest and up to 10 years; and
2. The SBA Economic Disaster Loans, made out directly by the SBA. These loans can extend up to $2 million and include interest rates of 2.75% for non-profits and interest rates of 3.75% for small businesses. You are eligible if you are:
- A small business with fewer than 500 employees or otherwise meets the SBA’s size standard.
- A 501(c)(3) with fewer than 500 employees.
- An individual who operates a business as a sole proprietor
- An individual who operates a business as an independent contractor.
- An individual who is self-employed who regularly carries on any trade or business.
- A Tribal business concern that meets the SBA size standard.
- A 501(c)(19) Veterans Organization that meets the SBA size standard.
3. Unfortunately, cannabis companies are not eligible for SBA loans, and it is unlikely that they would be covered by the Payment Protection Program either.
Please note: the programs mentioned above likely do not extend to cannabis businesses, despite the fact that many states have deemed cannabis facilities an essential business and allowed to remain open and operational during these times.