Your Guide to CARES Act and Other Financial Aids

Looking for other alternative financial aids? Here is a collated list of options that you can apply for.

Coronavirus, Aid, Relief, and Economic Security (CARES) Act, was passed by Congress with overwhelming, bipartisan support and signed into law by the President to provide fast and direct economic assistance to American workers, families, and small businesses and preserve jobs for the American industries. This over $2 trillion economic relief package delivers on the commitment to protecting the American people from the public health and economic impacts of COVID-19.

Live Update (April, 30)

The Federal Reserve Board on Thursday announced it is expanding the scope and eligibility for the Main Street Lending Program. As part of its broad effort to support the economy, the Federal Reserve developed the Main Street Lending Program to help credit flow to small and medium-sized businesses that were in sound financial condition before the pandemic.

Live Update (April, 28)

The US Secretary of Treasury Steven Munchin announced that businesses receiving PPP loans in excess of $2 million will be subject to audit by the Small Business Administration (SBA) prior to loan forgiveness to confirm borrower eligibility and need.

What is PPP?

Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

What is the current status?

The intention behind the program was good but the frenzy and urgency surrounding the current situation led to an unkempt rollout. While few lucky companies passed through the procedural maze to successfully apply for a loan, some were weighed down in the process. As a result, some of the hard-hit businesses were still left in the lurch.

The shortages of the fund were not the only issue that plagued the program. Tech delays, access problems, and loopholes enabled larger companies to reap the key benefits. And while the government is expected to sign off on additional funding for PPP, some companies may have to start looking for alternatives.

Maintaining your PPP Loans

Acquiring the loan isn’t the end of the story. A lot of requirements and compliances that follow suit. We have listed some critical tasks that need to be done after you receive the loan –

Record the loan on your balance sheet as a liability, the current portion of the debt should be recorded as a current liability and the portion of debt extending beyond one year should be recorded as a non-current liability
Fiscal companies whose year-end straddles this period or for companies who disclose footnotes quarterly, the standard debt footnote will be required
Maintain a separate bank account for the loan proceeds and use its bank statement while applying for forgiveness
Initiate a weekly routine for gathering source documentation for any outflows from the account
Ask for a letter of reprieve from the lender which you can use to show your forgiveness amount to your auditors

Understanding loan forgiveness

The best part about the PPP loans being given out the SMBs is that they are in some cases 100% forgivable, only if you meet the set criteria. Here are some guidelines for you to go through –

Borrowers will have to present SBA PPP Loan papers for all the loans in excess of $2million.
Borrowers should calculate a reasonable amount of forgiveness to ensure compliance with the 75% | 25% split of payroll and non-payroll expenses, respectively. Try the loan forgiveness calculator. Apply for forgiveness as soon as the eight week forgiveness period comes to a close. Ensure that there is no reduction in the employee headcount or their wages to avail loan forgiveness.
Some key documents required while applying for loan forgiveness –

Verification of the number of full-time equivalent employees on payroll
Pay rates for the periods covered
Payroll tax filings reported to the Internal Revenue Service and state income
Payroll and unemployment insurance filings
Payments on covered mortgage obligations
Payments on covered lease obligations
Payments on covered utility payments
Payments of interest on other debt obligations
Certification from a representative of the eligible recipient

Retain all your payroll registers, bank statements, ledger details, invoices for mortgage interest, rental and lease agreements or monthly invoices, utility bills, invoices for interest on debt obligations as documents required might vary on lender-to-lender basis.

Some key resources –

Be PPP ready when the program is refinanced

As per an estimate, around 800,000+ applications are pending with the SBA to be processed when the PPP loan re-opens. If you want to join and rise through the queue, you should get your application in order today and submit it to a PPP lender. This means that you will have to keep the official documents ready to go. The documentation requirements vary depending on company size and type. The list can be quite long, so be careful that you don’t miss out on any critical papers.

Applying right now is still tricky even if you have all your documents in place. The lenders have stopped accepting applications and the SBA lender match page is also not displaying any information. What you can do is reach out to a financial institution that you are a member of and check if they are participating in PPP. If not, then you can tap on community banks or online lenders like Paypal, Kabbage, Square, and others to process your application.

Note – Be careful if you are applying with multiple lenders. A fraud alert could be triggered if multiple applications are submitted on your behalf. Ensure that the lender contacts you before submitting your file.

Quick guide for financial aids

Alternative funding for SMBs

With PPP loans not being sufficient enough to cater to the needs of small and medium scale businesses, there are other options available for you. We have collated some of them with extensive data for your reference here – Alternative Loans, Grants & Funds for SMBs

Industry support, Brothers-in-Arms

Restaurant employee relief fund

The National Restaurant Association has set up a grant to help restaurant employees and is providing assistance up to $500 to all the impacted employees. Check here to get more information on the application.

CERF + safety net

The emergency relief grant of $3000 is provided to eligible artists working in crafts discipline. You can go through the eligibility criteria here and then apply for the grant.

Photographers relief fund

A grant of up to $500 will be provided to the impacted photographers due to COVID-19. More information about the grant is available here.

Regional support

There are many region-specific supports and resources offering emergency funding. Check your local chamber of commerce, economic development office, or nonprofit for relief programs.

Detailed Information: State-wise information on funds for businesses.

Funding for Self-employed

The unemployment assistance fund will be made eligible for self-employed individuals and independent contractors. The grant amount varies depending on every state but the additional $600 will be added to the fund which is financed by the federal government. You can get more information on the unemployment benefits here.

Tax relief for small businesses

As the U.S. federal government is implementing emergency measures to support its economy in response to COVID19, here is a synopsis of the most important federal tax relief measures.

Income tax filing due date extended	Treasury and the IRS announced that the federal income tax filing and payment due date is extended from April 15, 2020, to July 15, 2020.
Advantage of two new refundable payroll tax credits	Treasury, the IRS, and the Department of Labor announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits for the cost of providing Coronavirus-related leave to their employees.
Individual employment taxes	The CARES Act provides, among other things, a new, temporary employee retention credit; rebate checks up to $1,200 for many individual taxpayers (plus $500 per qualifying child); and a waiver of the 10-percent early withdrawal penalty for certain distributions from qualified retirement accounts.

The other key tax related alerts and resources are:

Managing businesses during COVID-19

With the pandemic presenting a serious threat to businesses and economies around the world, it has become all the more important to maintain business relationships and stay connected with your remote team and stakeholders. Companies need to build a scalable ecosystem by identifying priority processes and acquiring the necessary tools to enable collaboration beyond set boundaries.

The World Health Organization officially declared COVID-19 a pandemic on March 11. Within a few weeks, an estimated 16 million U.S. workers had switched to working remotely to flatten the curve of the health crisis, according to a new survey by Slack.”

While most workers are doing our best to adapt to their new workplace reality, here are some business tools/apps that can help to work and deliver your customer needs without delays:

Categories	Popular tools
Video conferencing and prospecting tools	Skype, Zoom, Blue Jeans, WebEx, GoToMeeting
Scheduling tools	Calendly, X.ai, Meetingbird
Marketing automation tools	Mailchimp, Hubspot
Chatbots	Intercom, Drift
Product demo tools	Productboard, Favro
Customer onboarding tools	Walkme, User Guiding, User Pilot
Sales document management tools	RevvSales, Pandadoc
Project collaboration tools	Asana, Jira
Communication tools	Slack, Chanty, Microsoft Teams
E-signature	Sign easy, Hello Sign, Adobe Sign, RevvSales
Sales enablement tools	Mindtickle, Zoho CRM
File sharing tools	Google Drive, Dropbox, Microsoft OneDrive
Customer success tools	Hubspot, Zendesk, Custify

Some of the other free or affordable working tools are as follows:

Employee welfare

Covid-19 has pushed us all to our homes. WFH is the new business norm. This initiative was taken to ensure the safety and well being of employees. But social distancing can get difficult with time and might affect the morale and productivity. So here are some WFH hacks that your can implement with your employees to make this challenging time a little bearable.

Tips	Best practices	Tools/Apps at your rescue
Flexibilty to manage time	Working from home can result in people losing track of time. The work hours can extent beyond your regular office hours and can affect the employee’s productivity. Giving them the flexibilty to design their day can be a step in the right direction.	Hubstaff, Clockify, Trello, Active Collab
Communication is the key	Be there for your employees but not just for work. At time a good conversation can be enough to motivate and instill a sense of hope in times of despair.	Oovoo, Aircall, Marco Polo, Jitsi
Keep calm and Game on!	All work no play, makes Jack a dull boy. Few fun games and a hint of mindful exercises can work wonders in breaking the monotony	Go Game, Calm, Headspace
Never Stop learning	Learning is an ongoing process. Make available relevant courses for your employees to enhance skills and putting free time to good use!	Fiverr, Udemy, Coursera

Employee Information Update

Employee safety is also of prime concern and there are ways that you can help them by sharing verified information concerning COVID-19 recent updates.

Precautions to take when workplace reopens

With the ease of restrictions, workplaces being allowed to open in different parts of the world with some specific guidelines to adhere to. Employers and employees need to take precautions to prevent the growth of COVID-19 within the workplace. Here some measures that they can take –

Employers –

Businesses and employers should assure that the office space is properly disinfected before work resumes.
Employers need to increase sanitation at the workplace and implement strict social distancing measures.
Employers should refrain from conduction team meetings that involve a gathering of people in one place.
The customary practice of shaking hands can be temporarily replaced with a warm “hello” or “pleased to see to you” greetings.
Keep your employees assured that the management is being extra careful and appropriately managing and responding to the situation.

Employees –

Employees should take care of their health, keep their workstations clean, use hand sanitizers more often, and comply with the guidelines laid down by their employer.
They should participate in the COVID-19 response program conducted by their employers.
If employees or any close family members tested positive for COVID, they should report the same to the management.

Some key resources for you to refer –

DISCLAIMER: The information is collated from government websites and other trusted sources. Since the rules and regulations keep changing frequently, we recommend you to consult your professional lawyers and accountants before making final decisions. We are doing our best effort to put the data together to ensure the most relevant and appropriate information is available for you in one place.