Direct Support for Wisconsin Small Businesses
Updated Thursday, April 9, 2020
Senator Baldwin worked to pass the bipartisan Coronavirus Aid, Relief, and Economic Security (CARES) Act to help provide immediate support for Wisconsin families, workers, schools, small businesses, hospitals and our health care system. This action by Congress is another strong step forward to help Wisconsin meet the challenges we face. We are all in this together, and Senator Baldwin will continue her work across party lines to take additional steps to get through this public health crisis, stabilize our economy, and help us all move forward.
The bipartisan CARES Act provides:
- $377 billion to support small businesses hurt by the coronavirus pandemic. The legislation will help provide small businesses the resources they need to keep moving forward, and keep their workers on the payroll.
- $350 billion in loan forgiveness grants to small businesses and non-profits to maintain existing workforce and help pay for other expenses like rent, mortgage, and utilities.
- $10 billion for Small Business Administration (SBA) emergency grants of up to $10,000 to provide immediate relief for small business operating costs.
- $17 billion for SBA to cover six months of payments for small businesses with existing SBA loans, and six months of loan forbearance for all small businesses.
Struggling to get started? The following questions might help point you in the right direction. Do you need:
- Capital to cover the cost of retaining employees? Then the Paycheck Protection Program might be right for you.
- A quick infusion of a smaller amount of cash to cover you right now? You might want to look into an Emergency Economic Injury Loan or Grant.
- To ease your fears about keeping up with payments on your current or potential SBA loan? The Small Business Debt Relief Program could help.
- Just some quality, free counseling to help you navigate this uncertain economic time? The resource partners might be your best bet.
- Guidance for Non-Profits? Only 501(c)(3) and 501(c)(19) non-profits are eligible for the Paycheck Protection Program, while all private non-profits, including 501(c)(4)s and 501(c)(6)s are eligible for Economic Injury Disaster Loans and Grants. Finally, all non-profits are eligible for Employee Retention Payroll Tax Credits.
- Information on new paid sick leave and expanded family and medical leave implementation? The U.S. Department of Labor has guidance.
Paycheck Protection Program (PPP) Loans
The program would provide cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven, which would help workers remain employed, as well as help affected small businesses and our economy snap-back quicker after the crisis. PPP has a host of attractive features, such as forgiveness of up to 8 weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year. Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program would be retroactive to February 15, 2020, in order to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020. Small businesses can begin applying for and receiving loans on the same day beginning Friday, April 3, 2020.
Note: If you receive assistance from this program, you are not able to receive assistance from the Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship
Small Business Debt Relief Program
This program will provide immediate relief to small businesses with non-disaster SBA loans, in particular 7(a), 504, and microloans. Under it, SBA will cover all loan payments on these SBA loans, including principal, interest, and fees, for six months. This relief will also be available to new borrowers who take out loans within six months of the President signing the bill into law. Click here for more information regarding the Small Business Debt Relief Program.
Economic Injury Disaster Loans & Emergency Economic Injury Grants
These grants provide an emergency advance of up to $10,000 to small businesses and private non-profits harmed by COVID-19 within three days of applying for an SBA Economic Injury Disaster Loan (EIDL). To access the advance, you first apply for an EIDL and then request the advance. The advance does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. To apply for an EIDL loan visit https://covid19relief.sba.gov/#/. Click here for more information regarding EIDL loans and grants.
The CARES Act provides full federal reimbursement to states for payments made under work share programs until the end of 2020. These programs can avoid layoffs by sharing hour reductions among workers and providing them pro-rated unemployment benefits. In Wisconsin’s work share program, at least 20 workers must be affected to be eligible and the maximum amount their hours can be reduced is 50 percent. For general information and guidance for employers interested in participating in the Wisconsin Work-Share Program please visit: https://dwd.wisconsin.gov/uitax/workshare.htm
Counseling & Training
If you, like many small business owners, need a business counselor to help guide you through this uncertain time, you can turn to your local Small Business Development Center (SBDC), Women’s Business Center (WBC), or SCORE mentorship chapter. These resource partners, and the associations that represent them, will receive additional funds to expand their reach and better support small business owners with counseling and up-to-date information regarding COVID-19. There will soon be a joint platform that consolidates information and resources related to COVID-19 in order to provide consistent, timely information to small businesses. Click here for more information regarding counseling and training.
For help applying for an Economic Injury Disaster Loan and to access other loan resources available to Wisconsin businesses courtesy of the Wisconsin Small Business Development Center Network, please visit: https://wisconsinsbdc.org/services/covid-19/
For information and resources available to small businesses courtesy of the Wisconsin Women's Business Initiative Corporation (WWBIC) please visit: https://www.wwbic.com/covid-19-resources/
For contact information for your local SCORE mentorship chapter, please click here.
For local and state resources available to small businesses courtesy of the Wisconsin Economic Development Corporation, please visit: https://wedc.org/programs-and-resources/covid-19-response/
If you are a government contractor, there are a number of ways that Congress has provided relief and protection for your business. Agencies will be able to modify terms and conditions of a contract and to reimburse contractors at a billing rate of up to 40 hours per week of any paid leave, including sick leave. The contractors eligible are those whose employees or subcontractors cannot perform work on site and cannot telework due to federal facilities closing because of COVID-19.
If you need additional assistance, please reach out to your local Small Business Development Center, Women’s Business Center, SCORE chapter, or SBA District Office (see above). You should also work with your agency’s contracting officer, as well as the agency’s Office of Small and Disadvantaged Business Utilization (OSDBU).
Small Business Tax Provisions
Employee Retention Credit for Employers Subject to Closure or Experiencing Economic Hardship
Note: This credit is not available to employers receiving assistance through the Paycheck Protection Program.
This provision would provide a refundable payroll tax credit for 50 percent of wages paid by eligible employers to certain employees during the COVID-19 crisis. The credit is available to employers, including non-profits, whose operations have been fully or partially suspended as a result of a government order limiting commerce, travel or group meetings. The credit is also provided to employers who have experienced a greater than 50 percent reduction in quarterly receipts, measured on a year-over-year basis.
Wages of employees who are furloughed or face reduced hours as a result of their employer’s closure or economic hardship are eligible for the credit. For employers with 100 or fewer fulltime employees, all employee wages are eligible, regardless of whether an employee is furloughed. The credit is provided for wages and compensation, including health benefits, and is provided for the first $10,000 in wages and compensation paid by the employer to an eligible employee. Wages do not include those taken into account for purposes of the payroll credits for required paid sick leave or required paid family leave, nor for wages taken into account for the employer credit for paid family and medical leave (IRC sec. 45S). The credit is provided through December 31, 2020.
Delay of Payment of Employer Payroll Taxes
This provision would allow taxpayers to defer paying the employer portion of certain payroll taxes through the end of 2020, with all 2020 deferred amounts due in two equal installments, one at the end of 2021, the other at the end of 2022. Payroll taxes that can be deferred include the employer portion of FICA taxes, the employer and employee representative portion of Railroad Retirement taxes (that are attributable to the employer FICA rate), and half of SECA tax liability. Deferral is not provided to employers receiving assistance through the Paycheck Protection Program.
Paid Sick Leave and Expanded Family and Medical Leave Implementation
For information on how Wisconsin workers and employers will benefit from the protections and relief offered by the Emergency Paid Sick Leave Act and Emergency Family and Medical Leave Expansion Act, both part of the Families First Coronavirus Response Act (FFCRA) please visit https://www.dol.gov/agencies/whd/pandemic. The Department of Labor’s Wage and Hour Division (WHD) has posted a temporary rule issuing regulations pursuant to this new law, effective April 1, 2020.
Additional Information and Resources
For general information and resources about coronavirus for Wisconsinites, please click here.
For a section by section summary of the bipartisan CARES Act, please click here.
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