EMPLOYERS & BUSINESSES

Support for Impacted Businesses:

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, allocates $349 billion to help small businesses keep workers employed amid the current circumstances they are encountering. The CARES Act provides funding for the Paycheck Protection Program, modifies the existing Emergency Injury Disaster Loan (EIDL) program and provides immediate loan payment relief for current SBA 7(a) borrowers. The following is an overview of the key components of and eligibility requirements of these programs:

7(a) Loan Payment Relief: SBA will pay the principal, interest, and any associated fees owed on 7(a) loans as follows: • Existing borrower not on deferment: six months beginning with the next payment due on the loan; • Existing borrower on deferment: six months of payments beginning with the next payment due on the loan after the deferment period; and • New borrower: six months of payments beginning with the first payment due on the loan, but only for new loans made within the first six months starting from the date of enactment. (3/27/2020).

Economic Injury Disaster Loan (EIDL): ***Due to funding limitations, EIDL money is currently only being distributed to agricultural businesses and businesses who submitted a request before the application portal closed on April 15.*** Eligibility: Businesses with 500 employees or fewer. • Up to $2 million can be provided to help meet financial obligations and operating expenses that could have been met if the disaster did not occur. • Loans can be made based solely on credit scores. • The interest rate on EIDLs will be 3.75% interest rate for small businesses. • The first twelve payments will be deferred and not become due until one year after the original disbursement. Interest does accrue during this time. • The term of these loans will be up to 30 years.

Economic Injury Disaster Loan (EIDL) Advance: For those that apply for the Economic Injury Disaster Loan (EIDL), an advance of up to $10,000 will be provided to small businesses within several days of applying for the loan. • The advance does not need to be repaid, even if the grantee is subsequently denied an EIDL. • Funds can be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. • Eligibility: Advances are available to small businesses, sole proprietors, independent contractors, tribal businesses, as well as cooperatives and employee-owned businesses in operation on January 31, 2020.

Small Business “Paycheck Protection Program” (PPP): A new $349 billion lending program under the existing SBA 7(a) program. The SBA guarantee of PPP loans will be 100% through the end of 2020. PPP loan payments will be deferred for a minimum of six and up to 12 months. Loans will be administered through local and regional banks; any federally regulated bank may become an SBA lender for this purpose. The Department of the Treasury will issue regulations for these loans quickly. • The interest rate will not exceed 4%. Rate is currently fixed at 0.5%. • Eligibility: • Small businesses as defined by SBA size standards, generally up to 500 employees, but up to 1,500 employees depending on the sector as certain sectors are based on revenue. • Sole proprietors, the self-employed, and independent contractors. • Regulatory Streamlining: • SBA’s standard “no credit elsewhere” test is waived. • No personal guarantee or collateral required. • No additional fees will be applied to these loans. • Size of loans: Up to $10 million. Loan amount is based on recent payroll costs, compensation paid to individuals, including the self-employed. Compensation in excess of $100,000 a year to any individual is excluded. • Requirements: The business must certify the loan will be used to retain workers, maintain payroll, make mortgage or lease payments, and pay utilities. • Loans may be forgiven, up to an amount equaling eligible payroll, mortgage interest, rent and utility cost, incurred during the 8 week period starting from loan origination. Compensation in excess of $100,000 a year to any individual will not qualify for forgiveness. • Loan forgiveness is reduced by layoffs or pay reductions in excess of 25%. • Loan forgiveness is not treated as taxable income.

For more information, contact: SBDC – Lynchburg Region – 434.845.5966 or visit www.sbdclynchburgregion.org

Tax Information:

City of Lynchburg

Deferral of meals, lodging, and amusement taxes

Corporate, Sales, and Individual Taxes:

  • Businesses impacted by COVID-19 can also request to defer the payment of state sales tax due March 20, 2020 for 30 days.
  • When granted, businesses will be able to file no later than April 20, 2020 with a waiver of any penalties.
  • The Virginia Department of Taxation is extending the due date of payment of Virginia individuals and corporate income taxes. While filing deadlines remain the same, the due date for individual and corporate income tax will now be June 1, 2020.
  • Please note that interest will still accrue, so taxpayers who are able to pay by the original deadlines should do so.

Extensions from the IRS

  • Individuals: Income tax payment deadlines for individual returns, with a due date of April 15, 2020, are being automatically extended until July 15, 2020, for up to $1 million of their 2019 tax due. This payment relief applies to all individual returns, including self-employed individuals, and all entities other than C-Corporations, such as trusts or estates.
  • Corporations: For C Corporations, income tax payment deadlines are being automatically extended until July 15, 2020, for up to $10 million of their 2019 tax due.

OSHA: Guidance on Preparing Workplaces for COVID-19 (Download PDF)

Frequently Asked Questions:

What businesses are essential vs. non-essential?

What is Executive Order 53?

What is Executive Order 55?

Helpful Links:

Health and safety guidance from the Virginia Department of Health

Official COVID-19 directives from the Commonwealth of Virginia

Frequently Asked Questions from Workers Regarding COVID-19

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