Great news! The U.S. Senate passed legislation that provides payroll and rent relief to small businesses.
Having been in the trenches of a massive economic damages claim process before (Deepwater Horizon Oil Spill), here's my experience:
1. Things will not move quickly and the process will continue to evolve.
2. The system will become inundated almost immediately and business owners may become frustrated.
3. The money will come, but it will take time - those working to process applications will work 24-7, but will struggle to keep up in the near term.
4. It is better to anticipate additional underwriting data requests than to wait for a response/request from the SBA. For example, consider submitting the following documentation with the application: (1) Copy of most recent tax return (2) Copy of annual payroll detail report last year and YTD 2020 (3) A very succinct hardship letter describing the business, # of full time W2 workers, average weekly wages for the company, monthly rent expense and utilities expense. (*Make sure to reduce the file size of any scanned documents which you are uploading - we don't want to slow down the system - here's a link on how to do this: https://www.peachpit.com/articles/article.aspx?p=600970&seqNum=2)
My Understanding about the Small Business Program:
1. Forgivable disaster loans up to $2 million. Sets the funds up as a loan that is eligible for 100% forgiveness if used for the above purposes and in conjunction with guidelines related to staff retention.
2. Must have less than 500 employees.
3. Includes money for employee salaries under $100,000; paid sick or medical leave; insurance premiums; and mortgage, rent and utility payments.
4. I expect there will be a new, separate online processing portal for this program - here is the current SBA Disaster Loan Assistance Page which mentions COVID19 - at this time I am not 100% certain on where to submit applications (will follow up): https://disasterloan.sba.gov/ela/
1. Staff should code any downtime to a COVID19 Job (We suggest using "W2 Employee Downtime for COVID19" or something similar).
2. Affected companies will need to keep detailed accounting records for money spent on employee retention, rent and utilities.
3. SBA money should not be used for any purpose other than those specifically covered/allowed by SBA.
This process is still evolving - I hope this post brings some much needed optimism to fellow small business owners.
I will provide any updates I receive as soon as possible.