Mar 26, 2020.
“Forgivable” bridge loans to small business.
“Small Business” is defined for this program as having fewer than 500 employees. Certain larger employers can also qualify.
MAY be problematic to PE/VC-owned companies as historically SBA (who will administer program) has looked at portfolio of companies as one company.
Must be “substantially affected” by COVID-19. This includes loss of sales or customers.
Can apply between Mar 1 and Dec 31. (“covered period”)
Max loan amount = lesser of $10M -or- 4 times average monthly (payroll + mortgage pymnts + rent + other debt) over last year. Translation: up to $10M.
Forgiveness provision only relates to the costs of maintaining payroll between Mar 1 and June 30. Loan forgiveness is reduced by a percentage if average FTE is lower than same period in 2019.
Limitations on use – salaries, mortgage, rent, utilities, debt obligations incurred PRIOR to covered period.
Separate provisions related to women-owned and minority-owned businesses.
– Q1, Q2 2020 c-corp estimated tax payments. Delayed from April 15/June 15 to Oct 15.
– Employer payroll tax deferral. Employer portion only (7.65%). Payment of amounts due for payrolls between date of enactment and Dec 31 2020, can be deferred 50% until Dec 31, 2021, 50% until Dec 31, 2022.
– Required paid leave. Offset by a credit for wages paid for employees on leave.
– BIG business. Emergency loans to certain “distressed” business; mainly air carriers. Suspension of aviation excise taxes.
– The $1,200 check. Up to $1,200 per person, $2,400 for joint filers. $500 for each qualifying child (dependant). Phase out happens at $75K of AGI ($150K MFJ). Income determined by 2019 tax filing, or 2018 if not filed. “Checks” (or DD if info on file with IRS) will go out 3 weeks from enacting.
– A bunch of healthcare-related stuff. Funding for treatment of COVID-19, adjustments to healthcare insurance coverage, accelerated FDA approval, etc
– Education. Payments on federal student loans suspended. Adjustments to grants and other aid.
– Unemployment. Benefits extended to self employed and people with limited work histories.
– Individual tax. Filing and payment delay for 2019, and Q1 2020 estimated, from April 15 to July 15. Withdrawals from tax-favored retirement plans allowed without penalty, subject to limitations. Charitable contributions: non-itemizers can take an “above the line” (income adjustment) for CCs.