Note: This is an evolving situation. We continue to make adjustments based on input and recommendations from government officials. For more information, please check out the Small Business Administration’s Coronavirus (COVID-19): Small Business Guidance & Loan Resources.
PAYMENT PROTECTION PROGRAM
Q: I read on social media about the CARES Act for small business loans for those affected by the coronavirus epidemic. What does it mean?
A: Yes, the Coronavirus Aid, Relief, and Economic Security Act (CARES ACT) is a $2 trillion stimulus package aimed to provide relief for small-to-medium sized businesses and individuals impacted by the coronavirus (COVID-19) pandemic.
Among other initiatives, the CARES Act provides financial relief to qualifying businesses and is meant to address the economic fallout of the 2020 pandemic in the United States. More than $350 billion is being dedicated to business relief to prevent layouts and business closures.
Q: I read/heard about the Payment Protection Program. Can you tell me more?
A: The CARES Act includes a new “paycheck protection program” to significantly increase funding, expand flexibility and ease and speed access to loans and loan guarantees through the SBA’s loan guaranty program. “Covered loans” under the paycheck protection program are loans made under the program during the “covered period” (February 15, 2020 - June 30, 2020). The CARES Act permits the Administrator of the Small Business Administration (SBA) and the Secretary of the Treasury (Secretary) to authorize additional lenders to make covered loans. Covered loans are to bear interest not to exceed 4%. For information, please visit the SBA’s website.
Q: How do I know if my business is eligible to apply for the Payment Protection Program?
A: The only two factors to be considered by the lender in evaluating a prospective borrower’s eligibility for a covered loan are whether the prospect 1) was in operation as of February 15, 2020, and 2) had employees, paid salaries, and paid payroll taxes.
Eligibility for loans under the paycheck protection program during the covered period includes the following:
- Any business concern, non-profit organization, veterans organization or tribal business concern which employs not more than the greater of 500 employees or the size standard in number of employees for the industry established by the Administrator (for this purpose all full time and part-time employees and others employed on any other basis are counted)
- Certain individuals (sole proprietors, independent contractors and eligible self-employed individuals as defined in the Families First Coronavirus Response Act)
Q: What are the eligible payroll costs?
A:
- Payments of employee compensation (salary or wages; cash tips or equivalent; vacation, parental family, medical or sick leave; allowances for dismissal or separation; payments for group health care benefits (including insurance premiums); retirement benefits and state and local taxes assess upon compensation of employees)
- Payments to a sole proprietor or independent contractor (wages, commissions or similar compensation of not more than $100,000 in a year (prorated for the covered period)
Q: What are not the eligible payroll costs?
A:
- Annual compensation of an individual exceeding $100,000 (prorated for the covered period).
- Certain taxes imposed or withheld (chapters 21, 22 or 24 of the Internal Revenue Code).
- Compensation of any employee whose principal residence is outside the United States.
- Qualified sick leave and family leave wages credited under the Families First Coronavirus Response Act.
Q: What are the permitted uses of the proceeds of loans?
A:
- Payroll costs (see above description of eligible and ineligible costs); continuation of group health benefits during paid sick, medical or family leaves (and insurance premiums); employee salaries, commissions and similar compensation.
- Mortgage, rent and utilities payments made during the covered period under agreements in existence at the start of the covered period.
- Interest on any other debt incurred before the covered period.
Q: I’ve read that the Payment Protection Program includes loan forgiveness. What does that mean?
A: Eligible recipients of a covered loans will be eligible for forgiveness of indebtedness on the loans (not to exceed the principal amount of the financing) equal to the payments made during the eight-week period beginning on the origination date of the covered loan (covered period) in an amount equal to the total amount of the following payments:
- Payroll costs (see eligible and ineligible payroll costs outlined under “Maximum loan amount of covered loans and express loans” above)
- Interest on any covered mortgage obligation (real or personal property incurred before February 15, 2020)
- Any covered rent obligations (rent under a leasing arrangement in force before February 15, 2020)
- Any covered utility payment (electricity, gas, water, transportation, telephone or internet access which service began before February 15, 2020)
Q: How can I apply for forgiveness on the Payment Protection Loan?
A: An eligible recipient seeking loan forgiveness must submit an application to the originating lender of the covered loan. Applications must be accompanied by certain required documentation and the applicant must certify that the requested loan forgiveness was used to retain employees make interest payments on covered mortgage obligations, covered rent obligations or to make covered utility payments. Decisions by lenders are required within 60 days of receipt of the application. To apply or for more information, please visit the SBA’s webpage on the Payment Protection Program.
Q: Where can I get more information about the Payment Protection Loan or other available funding options?
A: The Small Business Administration has information about the Payment Protection Program as well as other programs to assist businesses impacted by the coronavirus (COVID-19) pandemic. Please visit: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options
TELEHEALTH NETWORK RESOURCES PROGRAM
Q: What is the Telehealth Network Resources Program?
A: This $200 million Program adopted by the Federal Communications Commission (FCC) would immediately support health care providers responding to the pandemic by providing eligible health care providers support to purchase:
- telecommunications services;
- information services (broadband, internet); and
- devices necessary to enable the provision of telehealth services during this emergency period.
Q: What is the eligibility to participate in the Telehealth Network Resource Program?
A: Eligible health care providers are defined to include:
post-secondary educational institutions offering health care instruction, teaching hospitals, and medical schools;
- community health centers or health centers providing health care to migrants;
- local health departments or agencies;
- community mental health centers;
- not-for-profit hospitals;
- rural health clinics;
- skilled nursing facilities (as defined in section 395i–3(a) of title 42
- consortium of health care providers consisting of one or more entities falling into the first seven categories.
In addition, eligible health care providers must be non-profit or public.
Q: How can I apply for the Telehealth Network Resources Program?
A: Selected applicants can receive full funding for these eligible telehealth services and devices. In order to receive funding, eligible health care providers would submit a streamlined application to the Commission for this program, and the Commission would award funds to selected applicants on a rolling basis until the funds are exhausted or until the current pandemic has ended.
Q: Where can I find out more information about the Telehealth Network Resources Program?
A: To learn more about the FCC’s $200 million telehealth program to support healthcare providers responding to the coronavirus (COVID-19) pandemic, please visit this website.
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