COVID-19 Update on Relief for Small Businesses

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Goldenberg Heller & Antognoli, P.C., is monitoring the fluid developments with respect to COVID-19, including the relief programs available to small businesses.  Below is a summary of such programs available through the federal government and the state of Illinois.

Federal

The Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”)

  • The CARES Act provides relief to businesses affected by COVID-19 in the following ways:
  • The Small Business Administration’s Economic Injury Disaster Loan Program (the “Disaster Loan Program”)
    • The Disaster Loan Program provides qualifying small businesses with working capital loans of up to $2 million to help overcome the temporary loss of revenue they are experiencing as a result of COVID-19.
    • Eligibility depends on a number of factors, including the industry in which the business operates, the business’s annual revenue, and/or the number of people employed by the business.
    • These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the impact of COVID-19.
    • Eligible small businesses that apply for an economic injury disaster loan may obtain a $10,000 advance that will not need to be repaid, even if the loan application is ultimately denied.
    • Loans are offered with long-term repayments, up to a maximum of 30 years, and with interest rates of 4% or less. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
    • Applications may be submitted via the following link: https://disasterloan.sba.gov/apply-for-disaster-loan/index.html.
    • Loans under the Disaster Loan Program may be converted to Payroll Protection Program loans (see below).
  • Payroll Protection Program – Forgivable Loans
    • The CARES Act makes $377 billion in funds available to small businesses through the Small Business Administration’s § 7(a) loan program.
    • These loans will be available from participating private lenders and may be used for certain purposes, including the payment of payroll, rent, and utilities.
    • These loans may be forgiven to the extent they are used to cover payroll or to pay other specified expenses, including rent, interest on certain mortgage obligations (but not principal), and utilities. Layoffs or salary reductions may affect the amount of loan forgiveness that a business is eligible to receive under the Payroll Protection Program.
    • These loans will be available at interest rates of 4% or less, and the amount of the loan cannot exceed an amount equal to 250% of a business’s average monthly payments for payroll costs during the 1-year period before the date on which the loan is made.
    • The SBA will issue regulations implementing the Payroll Protection Program.

SBA Express Bridge Loans

  • The Express Bridge Loan Pilot Program allows small businesses that currently have a business relationship with an SBA Express Lender to access up to $25,000 with less paperwork.
  • These loans can provide economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loan or used to bridge the gap while applying for an SBA Economic Injury Disaster loan.
  • To find an Express Bridge Loan Lender, visit https://www.sba.gov/funding-programs/loans/lender-match.

Illinois

Hospitality Emergency Grant Program

  • Eligibility:
    • Bars and restaurants with a valid license to serve food or liquor and with revenue between 500K and $1 million in 2019 are eligible for up to $25K.
    • Bars and restaurants with a valid license to serve food or liquor and with revenue of less than 500K in 2019 are eligible for up to $10K.
    • Hotels that generated revenue of less than $8 million in 2019 are eligible for up to $50K.
  • Permitted Uses of Grant Funds
    • For bars and restaurants, based on the businesses needs identified in the grant application, funds can be used to support working capital (rent, payroll, and other accounts payable), job training (such as new practices related to take out, delivery and sanitation) and technology enabling new operations as well as other costs to implement that technology.
    • For hotels, funds can be used as working capital to support the retention of employees.
  • Application Process and Deadline
    • Applications are submitted online through the following website: https://us.accion.org/news/covid-19-hospitality-business-grant-program/.
    • Applications must be submitted by 5:00 pm on April 1, 2020.
    • A total of $14 million is available under this program, and grant recipients will be chosen via lottery.
    • Grant recipients will be notified on April 4, 2020, and funds may be available as soon two days after banking information is received from a grantee.

Illinois Small Business Emergency Loan Fund

  • Eligibility:
    • Small businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 can apply.
  • Loan Terms and Permitted Uses:
    • Businesses can receive a low interest loan of up to $50,000 with a 5 year repayment period with no payments due for the first six months.
    • Loan funds must be used to support working capital.
  • Application Process:

Downstate Small Business Stabilization Program

  • Eligibility:
    • Eligible local governmental units can apply on behalf of businesses with 50 employees or less.
    • Madison County, St. Clair County, and the municipalities contained therein are not eligible governmental units.
  • Grant Amounts and Permissible Uses
    • Grants of up to $25K are available for use in supporting working capital.
  • Application Process:
    • Businesses in eligible areas must work with their local governmental units to submit applications.

Small Business COVID-19 Relief Program

Tax Deadline Relief

Federal

  • The April 15 filing deadline for federal income tax returns has been extended to July 15, 2020. All individual and other non-corporate tax filers are allowed to defer up to $1 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest.
  • Corporate taxpayers are allowed to defer up to $10 million of federal income tax (including self-employment tax) payments due on April 15, 2020, until July 15, 2020, without penalties or interest.

Illinois

  • The deadline to file individual and corporate income tax returns has been extended from April 15, 2020, to July 15, 2020.
  • This does NOT impact the first and second installments of estimated payments for 2020 taxes that are due April 15 and June 15. Taxpayers are required to estimate their tax liability for the year and make four equal installments.

 Missouri

  • The deadline to file individual and corporate income tax returns has been extended from April 15, 2020, to July 15, 2020.
  • Income tax payment deadlines for individual and corporate income returns with a due date of April 15, 2020, are extended until July 15, 2020. This payment relief applies to all individual income tax returns, income tax returns filed by C Corporations, and income tax returns filed by trusts or estates. The Missouri Department of Revenue will automatically provide this relief, so filers do not need to take any additional steps to qualify.
  • This relief for individuals and corporations will also include estimated tax payments for tax year 2020 that are due on April 15, 2020.

 

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