By Patricia Jones, Task Force on Povery
Many businesses in our area are being devastated by the closures and social distancing requirements mandated by our government during the COVID-19 epidemic. These pieces of legislation, passed in the last month by Congress, are designed to assist small businesses and nonprofit organizations through difficult economic times.
Most of this information was obtained from the website of the Open Sky Policy Institute, a non-partisan organization that provides sound data, research, and analysis to Nebraska’s fiscal debate. Their website describes the following pieces of legislation passed to help during this crisis and links for more information and application forms: www.openskypolicy.org. Look under Publications, then Policy Briefs; or use the search box.
The CARES Act, Corornavirus Aid, Relief, and Economic Security, provides grants, loans, and tax credits designed to assist nonprofit organizations, churches, sole proprietorships, self-employed individuals, cooperatives, independent contractors, and tribal businesses. There are several parts.
The Paycheck Protection Program (PPP) will allow small businesses to borrow money to cover monthly payroll costs for up to two and a half months at an interest rate of 1%. The loans may be forgiven (not have to pay back) if the borrower keeps or rehires staff and maintains their pay levels through June 30. Up to 25% of the amount borrowed may be used for rent, utilities, or interest on mortgages. Apply at your local financial institution.
Employee Retention Tax Credits are available to employers who are not receiving PPP loans. Their business must be fully or partially suspended due to a governmental order related to COVID-19, or have a reduction of at least 50% in gross receipts compared to the same quarter of 2019. This tax credit covers up to 50% of wages paid during the COVID-19 crisis.
Emergency Economic Injury Grants provide $10,000 to small businesses and nonprofits harmed by COVID-19. These do not need to be repaid. Fill out an application for an EIDL, Economic Injury Disaster Loan, at the Small Business Administration; if qualified, you receive money in three days. More can be borrowed: www.sba.gov.
The Small Business Debt Relief Program will cover principal, interest, and fee payments on current, non-disaster SBA loans for six months, and new loans taken out in the next six months.
Congress also passed the Families First Coronavirus Response Act in March. This allows employers to get tax credits or refunds if they expand paid sick leave and family medical leave for their employees. If you have COVID symptoms, are quarantined, or have to take off work to care for children since schools and many day care centers closed, you have paid leave. The business must have fewer than 500 employees.
The Nebraska Department of Economic Development has allocated Community Development Block Grant funds for businesses that provide essential services or for businesses eligible under the Nebraska Advantage Act. This list includes grocery stores, pharmacies, hardware/home improvement stores; and manufacturers, targeted exporters, and businesses involved in scientific testing or research and development. The city or county must apply on behalf of the business, and grants are not available to Omaha, Lincoln, Bellevue, or Grand Island. The funds are designed to help retain jobs held by low- or moderate-income persons.
With the economic assistance being offered by the government during these uncertain times, perhaps we can prevent many of the job losses that could devastate our area.