The coronavirus (COVID-19) pandemic is hitting the United States hard, forcing shutdowns of schools and businesses and prompting government officials to issue orders forcing people to stay in their homes and avoid all but the most essential outside travel. On March 13th, President Trump declared a national emergency due to the virus sweeping through communities from coast-to-coast. In the wake of this crisis, small businesses have been hit the hardest: many state governors have closed down restaurants, bars, movie theaters, and non-essential retail stores, causing entrepreneurs to experience significant losses in revenue. The problems posed by this viral outbreak for small business owners are myriad and potentially devastating.
Fortunately, there are ways of alleviating these problems, and large-scale relief initiatives are on the horizon. Whether your business has been shut down or remains open in some capacity, outlets for relief already exist or are on the way.
In order to aid and inform owners of small businesses, we’ve compiled this comprehensive guide to coronavirus issues and solutions. We wish you good luck during this difficult period. Coronavirus
Issue #1: My small business has been shut down for safety purposes and we are experiencing a significant loss in revenue. With a large number of states (including New York, Illinois, and California) shutting down bars, restaurants and non-essential businesses in the fight against the spread of coronavirus, many small business owners are facing a swift and devastating drop in revenue that will make it difficult to stay afloat.
However, there are a number of federal and state programs in place to provide financial relief for ailing small businesses so that they can pay off debts, take care of payroll and deal with mounting bills. Additionally, the private sector is doing its part to alleviate the damage.
Apply for a low-interest Economic Injury Disaster Loan from the SBA The United States Small Business Administration (SBA) is working in tandem with state Governors to provide Economic Injury Disaster loans for ailing small businesses and non-profits in 29 states and the District of Columbia.
Here are some of the specifics of the loans:
· Available to small businesses and private, non-profit organizations
· Offers up to $2 million in assistance
· Loans can be used to pay debts, payroll, accounts payable, and other bills
· The interest rate is 3.75% for small businesses and 2.75% for non-profits
· Loans can be set up with a long-term repayment scheme of up to 30 years maximum with terms set up on a case-by-case basis
Learn about local or statewide small business relief programs
So far, the coronavirus has hit some states much harder than others and–appropriately–those states have responded with large-scale relief measures to help affected businesses.
For example, Washington state, where the first U.S. outbreak occurred, is now offering no-interest loans to hurting businesses. Meanwhile in Illinois, Chicago Mayor Lori Lightfoot recently announced the $100 million Chicago Small Business Resiliency Loan Fund to provide much-needed relief for area entrepreneurs.
Stay informed about the state and local relief initiatives enacted in your area to find out what your business is eligible for.
Click here for a full list of state governors and their websites.
Take advantage of recently-enacted or soon to be enacted tax relief programs
The Families First Coronavirus Response Act was signed by President Trump on March 18, 2020, and takes effect on April 2, 2020. The provisions afforded by the act apply to employees of all businesses with 500 employees or less and include:
· Eligibility for two weeks (80 hours) paid sick leave for any employee who becomes sick or must care for a family member who gets sick.
· Up to three months paid family and medical leave with at least two-thirds of the person’s pay
Having to pay sick employees that are unable to work during this crisis may pose a serious financial problem for small businesses.
However, businesses will be granted relief in the form of tax credits equal to the amount paid in sick leave. Additionally, employers with fewer than 50 employees may be found exempt at a later date by the Secretary of Labor if paying sick leave hurts the business’s viability.
Postpone tax payments
Treasury Secretary Steven Mnuchin announced on March 17, 2020, that tax filers would be given 90 extra days to pay income taxes on up to $1 million in taxes owed, while corporate filers will be given the same amount of time for up to $10 million in taxes owed.
Tax day as well as payments has now been moved to July 15.
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