CARES Act – Benefits for Small Business Owners: Loans and Payroll Taxes

CARES Act – Benefits for Small Business Owners: Loans and Payroll Taxes

April 5, 2020

We wanted to share some of the reliable resources and information we’ve found most useful as we’ve researched the CARES Act for our clients.

The CARES (Coronavirus Aid, Relief, and Economic Security) Act was passed 3/27/2020. It is a $2.2 stimulus package t- You are likely getting multiple notices about it from multiple sources. Please work with your accountant and/or lender for information that is current and applicable to your particular situation.

For an overview please read this New  York Times article, “FAQ on Stimulus Checks, Unemployment and the Corona Virus Plan

In addition, we recommend The Small Business Owner’s Guide to the CARES Act from the US Senate Committee on Small Business Entrepreneurship

Paycheck Protection Program Loans

The Small Business Administration has detailed information about their Paycheck Protection Program – you can apply for amounts equal to 2½ months of average payroll.

The funds can be used for payroll, benefits, mortgage, rent, and utilities. Interest rates are capped at 4%, and the loans can be partially or fully forgiven if the business maintains certain employment levels.

While the loan program was expected to be live on Friday, April 3, we know that most banks are still putting the program in place. Most should be ready for your application business on Monday April 6. This specific program appears to be a first come, first served until the funds run out; don’t wait! Start today.

Reach out to your existing bank relationship first, many, if not all banks will process existing clients before accepting new applications.

Payroll Taxes

Businesses can generally defer payment of employment taxes in 2020, with half due by the end of 2021 and the other half by the end of 2022. Some companies severely affected by the coronavirus may be eligible for a credit to reduce those taxes. Please consult your financial advisor for details.

SBA Overview of Assistance: Provided by the Small Business Administration, this COVID-19 Relief for Small Businesses guide is comprehensive and current (as of today!) and an excellent resource to help see the big picture of Small Business assistance programs.

Bottom line:

  • Connect with your accountant and your bank.
  • Prepare your financials documentation, especially payroll documents.
  • Don’t delay – act as soon as possible.
  • But be patient – every one is learning and finding their way with this very new legislation.

There are sure to be revisions and new programs. Stay informed and stay healthy.

And we cannot emphasize this enough, if you would like to reach out to any of us to discuss these programs, we are happy to talk with you, share what we know and help you plan.

Greg Caruso (GCaruso@HarvestBusiness.com609-664-7955

Ed Davis (EDavis@HarvestBusiness.com301-325-7687

Richard Stopa (RStopa@HarvestBusiness.com703.307.1187


Clients choose Harvest Business Advisors for our accurate business valuations and our consistent ability to deliver a high price as part of a smooth exit transaction.
Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia.
Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

 

SBA – Resource Round-Up – March 31, 2020

SBA – Resource Round-Up – March 31, 2020

The Small Business Administration now has a page on their website dedicated to Small Business
Guidance and Loan Resources regarding Coronavirus (COVID-19).

There you can quickly access information about:

Each local region also has resources available:
Maryland District Office
New Jersey District Office
Pennsylvania (Eastern) District Office
Virginia District Office
Washington Metropolitan District Office

In addition, the SBA is also offering regular webinars on applying for SBA Disaster Loans.

Be certain to check with your local and state Economic Development Administration for additional
support and resources. Many are offering grants to help businesses weather this crisis.

We are reviewing the CARES Act passed by Congress and will more to share about that legislation and
how it may benefit businesses very soon.

We hope you and your family and your employees are doing well and doing what you can to “flatten the
curve” to shorten this down time and return to normal soon. We are here and would be happy to
connect if you need to talk.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

Help from the Small Business Administration

Help from the Small Business Administration

Last month, we reported that 2020 was off to a fast start, another exciting year for business sales, acquisitions and valuations.  Enter COVID-19, a game changer.  Long term, it will be “business as usual”.  Transactions in many industries will continue ( this isn’t a credit crisis like 2009 when banks shut down).  Acquisition financing is available at low rates

A number of our broker and valuation engagements involve SBA financing.  We’ve been in constant contact with key lenders for their input.  Below are some takeaways, we hope it’s helpful.

SBA DISASTER RECOVERY LOANS

The SBA is working with state Governors to provide targeted, low-interest disaster recovery loans to small businesses severely impacted by COVID-19.  Lenders we work with have indicated that:

  • Estimates of $50b in SBA assistance will available for “disaster recovery loans”
  • Loans up to $2m in assistance can be applied for (in approved areas)
  • Disaster loans can be used to pay:
    • Debts,
    • Payroll,
    • Suppliers,
    • General business expenses,
  • Interest rates: 3.75% for small businesses and 2.75% for non-profits.

How to Qualify for The Loan

  • States have to apply for disaster relief (all states in our general area have done so)
  • SBA will review and issue an Economic Injury Disaster Loan Declaration (“Declaration”)
  • SBA will coordinate with the state’s Governor to submit the request for Economic Injury Disaster Loan assistance.
  • Once a Declaration is made, the application process for Economic Injury Disaster Loan assistance will be made available to impacted communities.
  • Loan repayments can be as long as 30-years.

For additional information,

https://www.sba.gov/page/guidance-businesses-employers-plan-respond-coronavirus-disease-2019-covid-19

 or contact the SBA disaster assistance customer service center,

1-800-659-2955 (TTY: 1-800-877-8339) or email disastercustomerservice@sba.gov.

Qualifying Disaster Areas

Areas have to first qualify for the relief loans.  ALL of District of Columbia SBA District is approved – as are the states of Delaware, New Jersey and Pennsylvania.

For updates to approved disaster areas and general information please visit: www.sba.gov/funding-programs/disaster-assistance

DEFERRMENT PAYMENTS FOR EXISTING SBA LOANS

If you have an existing SBA loan, the lender you worked with may provide temporary relief in the form of “deferred payments”. The SBA loans that qualify for the deferral are:

Business Acquisition and Working Capital Loans (7(a) Business Loans)

If you have a loan related to a business acquisition or related to working capital loans, the deferral options depend on “who holds the loan”:

    1. If the loan is held by your lender (i.e. NotSold on Secondary Market) the lender may grant a deferment of up to six (6) consecutive months
    2. If the loan was sold to investors, and they “hold the loan”, the lender may be able to grant a one-time unilateral deferment of up to 90-days without requiring approval from the investor who “holds the loan”

 Commercial Real Estate and Equipment Loans (504 Business Loans)

Certified Development Company’s (CDCs) may assist borrowers by deferring payments for a stated period of time. The amount deferred should not exceed

    1. Six (6) cumulative monthly payments or
    2. 20% of the original loan amount, whichever is less.

KEY POINT: Keep in contact with your lender; they understand, they recognize your struggle and they are there to help out.

We will keep our eyes open, ears to the ground and continue to let you know what we learn. Meanwhile, if you need something from us, please reach out – we are happy to talk!

This post was written by Harvest Business Advisors partner Eddie Davis. Eddie can be reached at EDavis@HarvestBusiness.com or 877-838-4966.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

SBA Small Business Disaster Assistance – Coronavirus

SBA Small Business Disaster Assistance – Coronavirus

With the rash of business shutdowns due to the coronavirus it appears that many small businesses are going to have short term cash flow issues.  The SBA is offering disaster assistance loans that are likely to equal 3 to 6 months working capital needs.

Some links that may be helpful are below.

A blog run by Ami Kassar that has lots of helpful hints for obtaining SBA loans.  Most recently coronavirus related disaster loans.  https://tribe.multifunding.com/user/akassar

Ami Kassar is providing webinars on obtaining SBA disaster assistance due to the Coronavirus.  https://9buq9bpp.pages.infusionsoft.net/

Small Business Administration (SBA) website link for applying for disaster assistance working capital loans.  https://www.sba.gov/funding-programs/disaster-assistance

If we can be of assistance please call any broker at Harvest Business.

SBA – Women-Owned Small Business Federal Contracting program

SBA – Women-Owned Small Business Federal Contracting program

Harvest Business Advisors works with Small Business Administration (SBA) lenders for many of our transactions. Our entire team keeps up-to-date on all SBA programs and announcements to better serve our business brokerage clients and our business valuation clients.

We’d like to share this recent announcement from the SBA about their Women-Owned Small Business (WOSB) Federal Contracting program.

The federal government has set a goal is to award at least five percent of all federal contracting dollars to women-owned small businesses each year.

Joining the women’s contracting program means you are eligible to compete for federal contracts set aside for the program. (You can still compete for contract awards under other socio-economic programs for which your business may qualify.)

The SBA has made some changes to Women’s contracting program eligibility requirements and certification process that take affect this summer.

The eligibility requirements to qualify as a WOSB or an EDWOSB are fully defined in Title 13 Part 127 Subpart B of the Code of Federal Regulations (CFR)

You can also get a preliminary assessment of whether you qualify at the SBA’s Certify website.

In addition, soon it will be a requirement to be certified Certification as a WOSB either through a third-party or through the SBA’s FREE online certification at certify.sba.gov.

For the complete announcement from the Small Business Administration, please visit their website 

If you have any questions or need more information about SBA lending practices and requirements or a business valuation for a SBA loan, feel free to connect with us for a conversation.


Clients choose Harvest Business Advisors for our sage advice on profitably growing their business, accurate business valuations, and when the time is right, a consistent ability to deliver a high price as part of a smooth exit transaction.

Harvest Business Advisors provides business brokerage, business valuation, and business succession planning services. We have extensive experience in the information technology and professional services, manufacturing, distribution, and contracting fields. We maintain offices in Maryland, New Jersey and Virginia. Connect with us at info@harvestbusiness.com or 877-838-4966 to discuss selling your business, ordering a business valuation or buying a business.

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