Loans from the US Small Business Administration (SBA)
Various programs designed to provide businesses with immediate relief to help mitigate the impact of COVID-19 pandemic. Loans are to help small businesses, small agricultural cooperatives and most private nonprofit organizations with working capital and debt service immediately and over the next 6 months. Programs include:
- Paycheck Protection Program (PPP) – Direct incentive for small businesses to keep their employees on payroll by providing loans for payroll and certain other expenses. If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable; however due to likely high subscription, it is anticipated that not more than 25% of the forgiven amount may be for non-payroll costs.
- Accessing loan program: Businesses must apply through an SBA-approved lender such as Bank of Tescott, Bennington State Bank, Citizens State Bank & Trust and Wilson State Bank.
- Eligible businesses: All businesses, including non-profits, Veterans organizations, Tribal concerns, sole proprietors, self-employed individuals, and independent contractors, with 500 or fewer employees, or no greater than the number of employees set by the SBA as the size standard for certain industries.
- Loan amount: 250% of average monthly payroll from the past year capped at $100K per employee, up to a maximum of $10M.
- Loan forgiveness amount: Up to 100% as long as loan proceeds amount spent by the borrower during the 8-week period after the origination date of the loan is used for: payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020. Employee and compensation levels must be maintained and payroll cost capped at $100,000 on an annualized basis for each employee. Any advance amount received under the Emergency Economic Injury Grant Program (see below) will be subtracted from the amount forgiven.
- Loan terms: All loans under this program that are not forgiven will have the following terms:
- Interest rate of 1%
- Maturity of 2 years
- First payment deferred for six months
- 100% guarantee by SBA
- No collateral
- No personal guarantees
- No borrower or lender fees payable to SBA
- Application periods:
- Small businesses and sole proprietors – Friday, April 3rd to Tuesday, June 30th
- Independent contractors and self-employed individuals – Friday, April 10th to Tuesday, June 30th
- Loan forgiveness: Business owners MUST APPLY to have their loans forgiven.
- Economic Injury Disaster Loans (EIDL) & Loan Advance (Grant) – Program provides small businesses with working capital loans to help overcome the temporary loss of revenue they are experiencing.
- Loans are at a 3.75% fixed interest rate (2.75% for nonprofits) up to 30-year term
- Loans less than $25,000 can be unsecured. Loans over $25,000 will require collateral such as business real estate.
- Loan advance (grant) is up to $10,000 to small businesses and nonprofits that apply for an EIDL within three days of applying for the loan. *Advance/grant is based on the number of employees as of January 31, 2020, at $1,000 per employee up to a maximum of $10,000.
- Example applications for different business types: *Tip, print this off and gather all information before going through the online application because the online process does not allow you to save your work to go back and collect more info.
- Corporations, LLCs or Partnerships
- SBA Debt Relief and Express Bridge Loans – Provides immediate relief to small businesses with non-disaster SBA loans.
If you’re wondering what program is best for you, below are a few resources to help:
- Program Comparisons Spreadsheet
- Webinars from the Small Business Development Center on various programs (recommend viewing the latest webinars as new information has come out daily)
For assistance with loans from the SBA, contact:
- SBA-Wichita District Office: 316-269-6571 (ask for Christie or Janelle)
- Debra Peters with the North Central Regional Planning Commission in Beloit – https://www.ncrpc.org/services/business/
- Kansas Small Business Development Center: https://www.kansassbdc.net/
To get started with an SBA loan, click here: https://disasterloan.sba.gov/ela/
USDA’s Coronavirus Food Assistance Program
Providing direct support to farmers and ranchers for actual losses where prices and market supply chains have been impacted and directly purchasing and distributing fresh produce, dairy, and meat for food banks, community and faith-based organizations, and other non-profits. More info here: https://www.usda.gov/media/press-releases/2020/04/17/usda-announces-coronavirus-food-assistance-program
Employee Retention Tax Credit
A refundable tax credit against certain employment taxes equal to 50 percent of the qualified wages an eligible employer pays to employees after March 12, 2020, and before January 1, 2021. Eligible employers can get immediate access to the credit by reducing employment tax deposits they are otherwise required to make. More info here: https://www.irs.gov/coronavirus/employee-retention-credit
Hero Relief Program
Providing financial assistance to child care providers to support the needs of health care workers, first responders, and other essential workers with childcare. More info here: ksherorelief.com
Loan Deferrals through Local Banks
Businesses may be able to defer loan payments for a short period of time for those facing financial hardship because of an interruption in income due to the COVID-19 pandemic. Contact your local bank for information:
PENDING – NCK Business Relief Loan Program-COVID-19 Pandemic
The North Central Regional Planning Commission (NCRPC) in Beloit is hoping to offer a new program around May 1st to small businesses. The loan would be up to $25,000 at 0% interest, up to 10 years repayment period, with up to a 12-month deferral of monthly payments.
Paid Leave related to Coronavirus Pandemic (Families First Coronavirus Response Act)
The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act).
The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.
More info here: https://www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus
Helpful info related to CARE Act and Family Medical Leave:
- Employee Rights Poster: https://www.dol.gov/sites/dolgov/files/WHD/posters/FFCRA_Poster_WH1422_Non-Federal.pdf
- Employer Paid Leave Requirements: https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
- General Q & A’s: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
- Other US Dept of Labor info: https://www.dol.gov/coronavirus
- Employer’s Guide to COVID-19 Webinar: https://www.kansassbdc.net/covid19
Shared Work Program from the Kansas Dept of Labor (KDOL)
This program provides an alternative to businesses considering a layoff of employee(s) in order to reduce labor costs in a way that is helpful to both the employer and the employee. The program allows employers to reduce the number of employees’ overall work hours while extending unemployment insurance benefits to those employees to make up the difference for the loss in hours. More info here: https://www.dol.ks.gov/employers/shared-work-program
Rapid Response for Laid Off Workers from KansasWORKS
This program is the state’s pro-active, business-focused and flexible strategy to respond to pending layoffs and plant closings by quickly coordinating services and providing immediate aid to businesses and their affected employees. More info here: https://www.kansascommerce.gov/programs-services/workforce-services/rapid-response/
Contact Tucky Allen with the Rapid Response program at (316) 303-2906 or [email protected]
Assistance from the KS Department of Agriculture (KDA)
Excerpt of email from Kerry Wefald, Agriculture Marketing Director – The Kansas Department of Agriculture is working diligently with state and federal leaders to ensure our food and agriculture supply chains are operating at full capacity without distraction. At this time our meat and poultry processing, food safety and lodging, and animal health program areas are working as essential to support Kansas agriculture and communities across the state. Additionally, we have Division of Water staff on call should there be any need for emergency water permitting. Please know that Secretary Beam and our leadership team stand to assist should anyone experience disruption in the food/animal health chain supply due to Covid-19. This includes anything from supply and demand for ingredients and inputs to availability and transportation/distribution of food and feed (for both humans and livestock) to supply and demand and everything in between. No questions are too large or small; simply call upon KDA should there be a need (or even before a need arises as a precaution).
More info from KDA here: https://agriculture.ks.gov/
State and Federal Income Tax Deadlines
Both the IRS and the Kansas Department of Revenue have extended the deadline for filing 2019 tax returns. Taxpayers will now have until July 15 to file their returns. People can still file their taxes by the original April 15 date if they are expecting a refund.
- IRS tax relief programs related to CPVID-19 – Includes information on filing deadlines, paid leave for workers, and tax credits for small and midsize businesses. More info: https://www.irs.gov/coronavirus
- Kansas Dept of Revenue information: https://www.ksrevenue.org/
Find Employees through Kansas WORKS
If your business is ramping up services and needs to hire employees, KansasWorks can help you promote your job listings and connect with job seekers. More info here: https://www.kansasworks.com/ada/r/
Hospitality Industry Relief Emergency (HIRE) Fund* from the Kansas Dept of Commerce (KDOC)
This program provides bridge loans for Kansas’ hospitality sector during the COVID-19 crisis. Examples of hospitality businesses include restaurants, bars, lodging facilities, conference centers, and event centers. These funds can be used as working capital for business expenses. More info here: https://www.kansascommerce.gov/2020/03/governor-laura-kelly-establishes-the-hospitality-industry-relief-emergency-hire-fund/
*Due to the overwhelming initial response, the KDOC’s initial funds available for the program have been allocated at this time. However, the KDOC is keeping its form open and will continue to collect information should additional funding become available from Kansas hospitality businesses on the losses they are facing due to the COVID-19 pandemic.
Facebook’s Small Business Grants Program
The company is looking to provide financial support to businesses impacted by the COVID-19 pandemic. They are offering $100M in cash grants and ad credits to help during this challenging time. They will begin taking applications in the coming weeks. More info: https://www.facebook.com/business/boost/grants
Connection to all Kansas resources related to COVID-19 pandemic: https://www.kansastogether.com/families
Direct Relief Payments to Individuals and Families
All U.S. residents or citizens with adjusted gross income under $75,000 ($112,500 for head of household and $150,000 married) who are not dependent on another taxpayer and have a work-eligible Social Security Number, are eligible for the full $1,200 ($2,400 married) rebate. They are also eligible for an additional $500 per child. A typical middle-class family of four would receive $3,400 to help them meet their daily expenses. More information from Senator Moran’s office: https://www.moran.senate.gov/public/index.cfm?p=newsletter&id=220A89F2-AF83-4627-82B8-2F1A473D8E48
Unemployment Insurance from the Kansas Dept of Labor
- File for Unemployment Insurance here: www.getkansasbenefits.gov.
- COVID-19 Fact Sheet related to Unemployment Insurance: https://www.dol.ks.gov/docs/default-source/default-document-library/ui-covid19-faqs.pdf?sfvrsn=3b4c881f_10
Families First Coronavirus Response Act
Employee Paid Leave Rights: https://www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave
General Q & A’s: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
Other US Dept of Labor Info: https://www.dol.gov/coronavirus
An anonymous survey conducted at the end of April 2020 yielded 76 responses from our local Lincoln County, Kansas, businesses, including agricultural producers. See those results.
Governor Laura Kelly’s official framework of planned phases to re-open Kansas is available at covid.ks.gov. The framework also includes guidance for businesses and individuals.