CARES Act Relief

This program is administered by the U.S. Small Business Administration.

When you are ready to apply, visit sba.gov.

Paycheck Protection Program (PPP) Loan

Updates

• Starting February 24, for a 14-day period, only businesses with fewer than 20 employees can apply for relief through PPP.
• Tentative elimination of restriction preventing small business owners with prior non-fraud felony convictions from obtaining relief through PPP.
• Tentative elimination of restriction preventing small business owners who are delinquent on their federal student loans from obtaining relief through PPP. 
• SBA will issue clear guidance that otherwise eligible applicants cannot be denied access to the PPP for using ITINs to pay taxes.

1st Draw

Open until March 31 Size standards, eligibility criteria, and certain limitations for the original CARES Act PPP Loan are applicable including 60% must be for payroll to qualify for forgiveness - changes: 

• Expands eligibility includes 501(c)(6) nonprofits, such as local chambers of commerce, destination marketing organizations, housing cooperatives, newspapers, broadcasters, and radio stations.

• Expands covered expenses to include software, cloud computing resources, and human resources and accounting needs, as well as property damage costs due to public disturbances not covered by insurance, supplier costs & purchase of personal protective equipment.

• Includes set-asides to support first-time PPP borrowers with 10 or fewer employees. Additionally, provides for a set-aside for loans made by community lenders.

• A simplified loan forgiveness application form consisting of a one-page certification that requires the small business to list the loan amount, the number of employees retained and the estimated total spent on payroll costs for loans $150,000 or less.

• You may qualify even if you took advantage of the Employee Retention Tax Credit (more later).

• Borrower now has the option to select a covered period during which they can use PPP loan proceeds anytime between 8 and 24 weeks after disbursement.

Who Can Apply

• Business entities (e.g., partnerships, corporations, LLCs)

• Sole proprietors, independent contractors, self-employed individuals

• 501(c)(3)

• 501(c)(6)

• 501(c)(19) Veterans organization

• Tribal business, and

• Housing cooperatives, destination marketing organizations, and eligible news organizations.

• Must comply with size standards, eligibility criteria, and certain limitations.

Recipients

• Covered expenses for loan forgiveness expanded as stated with 1st Draw

• Repealed the previous CARES Act provision that required small businesses to deduct any Economic Injury Disaster Advance grants from PPP loan forgiveness.

• Overrides IRS ruling that barred small businesses from deducting from their taxes expenses paid with PPP loans.

• Employers can now also receive both the Employee Retention Tax Credit and a PPP loan, just not to cover the same payroll expenses.

• Reapplication may be an Option

New Applicants

• Eligible applicants that did not receive a PPP loan prior to August 8, 2020, will now have the ability to apply for a PPP First Draw Loan on or before March 31, 2021.

• Eligibility for PPP loans has been revised to include additional types of entities.

• Covered eligible expenses expanded and now includes the following: payroll costs, rent, mortgage interest, utilities, operations expenditures, property damage costs, supplier costs, and worker protection expenditures.

• Certain borrowers may request an increase to their original PPP loan amount.

BEGIN YOUR 1st DRAW APPLICATION TODAY

2nd Draw

• Eligibility for the PPP second draw - have no more than 300 employees and demonstrate at least a 25 percent reduction in gross revenues between comparable quarters in 2019 & 2020.

• Establishes a maximum loan size of 2.5X average monthly payroll costs, up to $2 million. Allows small businesses assigned to the industry NAICS code 72 (Accommodation and Food Services) to receive PPP second draw loans equal to 3.5X average monthly payroll costs. PPP –2nd Draw 9 www.nmsbdc.org

• Borrowers receive full loan forgiveness if they spend at least 60 percent of their PPP second draw loan on payroll costs over a time period of their choosing between 8 weeks and 24 weeks.

• Includes set-asides to support second-time PPP borrowers with 10 or fewer employees. Additionally, provides for a set-aside for loans made by community lenders.

• Eligible borrowers that previously received a PPP First Draw Loan may apply for a PPP Second Draw Loan of up to $2 million with the same general loan terms as their PPP First Draw Loan.

• For most borrowers, the maximum loan amount of a PPP Second Draw Loan is 2.5x average monthly 2019 or 2020 payroll costs up to $2 million.

• For borrowers in the Accommodation and Food Services sector (NAICS 72), the maximum loan amount for a PPP Second Draw Loan is 3.5x average monthly 2019 or 2020 payroll costs up to $2 million.

• PPP Second Draw Loan applicants must use the new SBA Form 2483-SD Borrower Application.

Who Can Apply

• Was eligible for and previously received a PPP First Draw Loan;

• Has or will use the full loan amount only for eligible expenses before the PPP Second Draw Loan is disbursed;

• Has no more than 300 employees; and

• Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

BEGIN YOUR 2nd DRAW APPLICATION TODAY

Economic Injury Disaster Loan (EIDL)

Portal extended until December 31, 2021

• Terms - 3.75% for businesses and 2.75% for nonprofits for 30 years
• Use for working capital & normal operating expenses
• The original amount was up to $2 million and then it was capped at $150,000 (stay tuned on this for SBA guidance)
• EIDL Advance Grants reopened with $20 billion in funding for $10,000 grants.
• The $10,000 advance grant is targeted for small businesses with no more than 300 employees, located in low-income communities, who have experienced a 30% reduction in gross receipts during any 8-week period between March 2 and December 31, 2021, relative to a comparable 8-week period immediately preceding March 2, 2020, or during 2019; or if the covered entity is a seasonal business concern, such other amount determined appropriate by the SBA Administrator.
• If a business qualifies and earlier received an EIDL grant less than $10,000 they can reapply to receive the difference (may occur automatically by the SBA).
• Extends covered period for emergency EIDL grants through December 31, 2021.

Forgiveness

• SBA will no longer deduct EIDL advances from forgiveness payment.
• If a lender has already received a forgiveness payment net of an EIDL Advance, SBA will provide a reconciliation payment to lender to be applied to the outstanding loan balance.

Employee Retention Tax Credit (ERTC)

Significantly expands the ERTC beginning on January 1, 2021 and expires on June 30, 2021 (good for 2 quarters)

• The new credit is 70% on $10,000 in wages per quarter or a maximum of $14,000 per employee through June 30th ($7,000 each quarter).
• Eligibility is now expanded to include employers who experienced a decline of more than 20%.
• In addition, the employee cap under which it is easier to claim the tax credit has been raised to 500 employees from the earlier 100 employees.
• Employers can now receive both the ERTC and a PPP loan, just not to cover the same payroll expenses.

• Employers can now receive both the ERTC and a PPP loan, just not to cover the same payroll expenses. 

• Reference the ERTC details at the following link but also be sure to talk to your accountant to help you investigate this with you.

Learn More

Shuttered Venue Operations Grant (SOS)

• All specific eligibility requirements are still being defined. Refer to www.SBA.gov/coronavirusrelief  for the latest information and webinar registration. Or contact SVOGrant@sba.gov directly via e-mail, or the New Mexico SBA district office; (505) 248-8225.
• Eligibility: Live venue operator or promoter, theatrical producer, or live performing arts organization operator, a museum operator, a motion picture theatre operator, or a talent representative who has experienced at least 25% reduction in gross earned income.
• Grant offers up to $10 million or 45% of 2019 gross earned income, whichever is less, based on significant 2020 revenue losses.
• If you receive this grant you may not apply for a new PPP loan (so organizations must choose which is best for them).
• Businesses who received a PPP first draw can still apply for the SOS, but cannot apply for PPP or SVOG.

Other SBA Loans

• Temporarily enhances terms of the 7(a) loan program - loan guarantee to increased to 90%, reduced or no fees for the borrower and the lender. Additionally, temporarily increase the 7(a) express loan limit and loan guarantee.
• Temporarily eliminates fees for the 504 loan program and offers favorable terms for refinancing loans.
• Increases aggregate loan limit for microloan intermediaries in order to increase capacity to make loans to underserved and underbanked borrowers.
• Extends the Small Business Debt Relief program, which would defer payments of principal and interest on new and existing SBA 7(a), 504, and Microloan programs for eligible entities.

Taxes

For those opting into the White House’s employee-side payroll tax deferral, the repayment deadline has been extended from April 2021 to December 31, 2021, lengthening the repayment period for those taxpayers.

• You can now defer your employer’s share of social security taxes through March 2021 and pay those amounts back as late as the end of 2022.
• Work Opportunity Tax Credit extended to 2025 - Qualified Long-term unemployment recipient
• Talk to your Accountant and/or Bookkeeper for this and other tax provisions.