What Does It All Mean? Help in Understanding What’s Available for Indiana State Businesses
We understand there is a deluge of information on where Indiana businesses can get assistance. However, understanding what these programs are and how they might apply to your business can be overwhelming. In an effort to help explain what these programs and policy changes entail, the Ginovus team has compiled the following information:
CARES Act’s Payment Protection Program (PPP)
The CARES Act’s Payment Protection Program (PPP) is the primary financial tool being made available to businesses. It is a loan program of up to $10MM or 2.5 times a business’s average monthly payroll, whichever is less. It offers a 4% interest rate with potential for up to the full loan amount as a forgivable loan (subject to program requirements). No payments for up to 1 year and no collateral or guarantor support required to qualify. To apply for the loan, please visit the U.S. Small Business Administration (SBA) website here.
Additional programs through the SBA
- Economic Injury Disaster Loan (EIDLs) – This program expanded eligibility under this loan program to all small businesses affected by the COVID-19 pandemic of up to $2MM in loans with an interest rate of 3.75%. EIDLs are non-forgivable loans and require guarantor support and collateral in most instances. However, payments may be deferred for up to 1 year, and there is also an option for an emergency cash grant of $10,000 for qualified expenses. For more information, please visit the SBA website here. Or a direct link to the application here.
- Express Bridge Loans (EBL) – This program may be an option for businesses that have an existing banking relationship with an SBA Express lender, and is meant to offer a quick interim loan of up to $25,000 at SBA market rates while awaiting one of the other long-term financing options. Only lenders that were already participating in the SBA Express program can issue EBLs, and borrowers may be required to pay off the full loan amount once approved for long-term financing. For more information, please visit the SBA website here.
- SBA Traditional 7A – Loan program up to $5MM for small businesses affected by the COVID-19 pandemic and at SBA market rates. 7A loans are non-forgivable loans and require guarantor support and collateral. Funds may be used for debt refinancing, business improvements, equipment/software purchases, other working capital. The application is not currently available online so please inquire with your nearest district SBA office or banking lender. For more information, please visit the SBA website here.
- Small Business Debt Relief – Program allows payment deferrals through 2020 on existing EIDLs, and may forgive 6 months of payments on other new and existing SBA loans and microloans. For more information, please visit the SBA website here.
- Lender Match Program – SBA will provide assistance pairing businesses with participating lenders. For more information, please visit the SBA website here.
- All available SBA options can be found here: https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources
Questions: 1-800-659-2955 (TTY/TDD: 1-800-877-8339) or firstname.lastname@example.org
Other CARES Act tax policy changes:
- Federal Employee Retention Tax Credit – a refundable tax credit on 50% of wages paid to employees from March 13, 2020 thru December 31, 2020. The credit is for up to $10,000 per employee for eligible businesses. For more information, please visit the IRS website here.
- Option for businesses to defer 2020 payroll tax payments over the next 2 years with 50% due in 2021 and the remaining 50% due in 2022. Please note that this option is not available to businesses with a PPP loan forgiven.
- Business NOL’s for tax years 2018 – 2020 can now be carried back 5 years
- Accelerating receipt of Business ATM credits
- Business interest expense deductions increased to 50% for tax years 2019 and 2020
- For more information, please visit the following U.S. Chamber of Commerce page and scroll to the Business Tax changes section here or consult with your tax professional.
Additional Initiatives Available to Indiana Businesses:
Indy Chamber – Rapid Response Loan Fund
The Rapid Response Loan Fund through the Indy Chamber’s Business Ownership Initiative (BOI) and its partners is an affordable option for loans of $1,000-$25,000. These could be used to pay employee salaries, insurance premiums, or as a bridge loan until additional funding kicks in from your bank or from the SBA. Complete information is available here.
Salesforce Cares Small Business Grants
Program is expected to allow for grants of up to $10,000. Grant applications will be made available to U.S. businesses in mid-April. Sign-up to be notified when the application process opens here.
Resources for Additional Guidance and Advice:
SCORE – America’s premier source of free business mentoring and education
As a resource partner of the U.S. Small Business Administration (SBA), SCORE has helped more than 11 million entrepreneurs through mentoring, workshops and educational resources since 1964. Request a meeting with a remote SCORE mentor here: https://www.score.org/find-mentor
U.S. Chamber of Commerce – Coronavirus Small Business Resources & Relief Information
We sincerely hope these resources can help you find the guidance and support needed to manage the changes ahead. If there are additional resources you would like to see added to the list, please contact us.
This post was last updated on April 13, 2020.