Information for Businesses
June 15, 2021
The Small Business Development Centers have published materials on small business resiliency including guides and templates. These are excellent resources to review as business models continue to evolve. Learn how to make your business plan more resilient to natural hazards and business shocks.
Loan Programs and Resources
Note that this situation remains fluid and information about programs is still evolving. These are the known resources available to businesses currently. The information will start with the different loan programs that are available to Morgan Hill businesses along with SBA funding that has recently become available due to Federal and State disaster declarations.
The State of California Treasurer’s Office Small Business Resources Page has a great deal of information available for businesses including grants and other programs by County and City.
In addition to their Grant Program, Facebook is offering several other resources.
EBay Up & Running Program. Offers a free basic online storefront for three months to impacted businesses that do not currently sell online.
IRS Deferrals and Credits
If your business does not qualify for Paycheck Protection Program or the Economic Injury loan from SBA or you did not receive funding under those programs you can take advantage of Employee Retention Credit (“ERC”) from the Internal Revenue Service. The ERC provides a refundable payroll tax credit for 50% of the wages paid by employers during the COVID-19 pandemic up to $5,000 per employee per quarter. This credit is applied to the employer’s quarterly tax liability reported on Form 941.
In addition, employers and self-employed individuals can defer payment of the employer share of Social Security taxes incurred to December 31, 2020. More guidance from the IRS and Payroll Tax deferral can be found by visiting the IRS website.
Any business that claimed a loss in the tax year 2018, 2019, or 2020, may be able to carry that loss back five years. More guidance from the IRS and Payroll Tax deferral can be found by visiting the IRS website.
Barstool Grant. The nonprofit 30 Day Fund was launched by Virginia technology entrepreneur Pete Snyder and his wife, Burson. Working with other business leaders throughout the nation, the Fund’s goal is to help save as many jobs as possible. The funds disbursed do not need to be repaid, but if businesses who receive the Fund’s assistance do, at a later date, wish to “pay it forward,” they may do so by directing those dollars back to the Fund. The Barstool Fund
Restaurant Revitalization Fund: Launching April 30th. Will provide restaurants with funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023. Eligible entities who have experienced pandemic-related revenue loss include:
- Food stands, food trucks, food carts
- Bars, saloons, lounges, taverns
- Snack and nonalcoholic beverage bars
- Bakeries (onsite sales to the public comprise at least 33% of gross receipts)
- Brewpubs, tasting rooms, taprooms (onsite sales to the public comprise at least 33% of gross receipts)
- Breweries and/or microbreweries (onsite sales to the public comprise at least 33% of gross receipts)
- Wineries and distilleries (onsite sales to the public comprise at least 33% of gross receipts)
- Inns (onsite sales of food and beverage to the public comprise at least 33% of gross receipts)
- Licensed facilities or premises of a beverage alcohol producer where the public may taste, sample, or purchase products
Small Business Administration Shuttered Venue Operators Grant (SVOG): Eligible applicants may qualify for grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. Businesses interested in the SVOG can steps now to prepare for the program. Recommended steps include:
- Review the Shuttered Venue Operators Grant Preliminary Application checklist (sba.gov);
- Preparing 2019 and 2020 financial statements, including a month-by-month breakdown of revenues;
- Calculating the average number of employees the business had over the prior year (Mar. 1, 2019 to Feb. 29, 2020) using FAQs as guideline; and
- Register in SAM.gov - see SBA video tutorial Shuttered Venue Operators Grant (sba.gov)
- Grow Morgan Hill Fund: A small business loan program specific to businesses located in Morgan Hill.
- California IBank: Program provides loan guarantees in support of small businesses. Small Business Finance Center
- CARES Act: Paycheck Protection Program (PPP) Loans: The program provides cash-flow assistance through 100 percent federally guaranteed loans to employers who maintain their payroll during this emergency THIS PROGRAM IS SET TO CLOSE ON MAY 31st. This can include loan Forgiveness.
- SBA’s Paycheck Protection Program website/Application (Link)
- PPP-Who Can Apply
- The California Rebuilding Fund is a loan program to support California’s small businesses—especially those located in economically disadvantaged and historically under-banked areas of the state. Businesses that employed 50 or fewer full-time equivalent employees (FTEs) and had gross revenues of less than $2.5 million or below in 2019 are eligible to apply.
- Jumpstart loan program: Small business loans over 5 years from $500 to $10,000
- Opportunity Fund: Micro loans starting at $2,500 up to $250,000.
- California Treasurers Office: The California Capital Access Program (CalCAP) is a loan loss reserve program supporting small business lending.
- Federal Reserve Main Street Lending Program: Businesses with up to 15,000 employees or up to $5 billion in annual revenue are now eligible, Loan size for two of the options starts at $500,000. For details please visit the Federal Reserve website. These loans will be issued through your lender.
Information on SBA COVID 19 Economic Injury Loans
What is an SBA-COVID 19 Economic Injury Loan?
If your business or not-for-profit has suffered a substantial economic injury, you may be eligible to apply for an SBA COVID 19 Economic Injury Disaster Loan. These loans are up to $500,000. The key terms of these loans are:
- A 3.75% interest rate for small businesses without credit available elsewhere. (Businesses able to get credit elsewhere are not eligible.)
- A 2.75% interest rate for nonprofits.
- A maximum 30-year term
How does a business apply for an Economic Injury Disaster Loan?
A business should be able to apply to the SBA either online or by mail. The applicant must provide substantial financial detail to analyze the applicant’s creditworthiness. You can use the services of a CPA or a technical expert, but the SBA will not pay for these services.
Free advice can be sourced from local Technical Assistance providers.
Partners available to help prepare loan paperwork to include:
- Small Business Development Center SBDC. Morgan Hill’s SBDC rep is Senior Business Advisor Allie Lopez- email@example.com or 408.579.9943
- Service Corp of Retired Executives SCORE
- Minority Business Development Agency MBDA
What is the maximum loan amount limit?
COVID 19 EIDL loans max out at $500,000.
What can the loan be used for?
These loans may be used to pay for working capital and normal operating expenses.
What credit requirements does the SBA use to determine the application?
The SBA typically use the following criteria when considering an application:
- An acceptable credit history
- An ability to repay
- Collateral is required for all loans over $25,000
The Treasury Department and Internal Revenue Service announced the federal income tax filing due date for individuals for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021
News release: Tax Day for individuals extended to May 17: Treasury, IRS extend filing and payment deadline
Families First Coronavirus Response Act (FFCRA)
Emergency Paid Leave and Expanded Family and Medical Leave: the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor announced that private small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act. Employers are encouraged to visit the U.S. Department of Labor website and IRS website for additional information on purpose, qualification, and frequently asked questions. (Currently not applicable to State and local governmental units).
Sales Tax (State of California)
California Department of Tax and Fee Administration (CDTFA) has the authority to assist individuals and businesses impacted by complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19. This assistance includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund.
For more information please contact CDTFA: https://www.cdtfa.ca.gov/services/covid19.htm
Small Business Relief Payment Plans (CDTFA)
Effective December 15, 2020, small business taxpayers with less than $5 million in taxable annual sales, can take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability only. All payment plans must be paid in full by April 30, 2022, to qualify for zero interest. Businesses with $5 million or more in annual taxable sales in sectors particularly impacted by operational restrictions due to the pandemic may also apply for this 12-month interest-free payment plan.
Payroll (State of California)
Employers experiencing hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for an extension must be received within 60 days from the original delinquent date of the payment or return. For questions, employers may call the EDD Taxpayer Assistance Center toll-free from the U.S. or Canada: 1-888-745-3886.
Workshare Program (State of California)
Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.
The Work Sharing Program helps employees whose hours and wages have been reduced:
- Receive UI benefits.
- Keep their current job.
- Avoid financial hardships
More details and forms are available at https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm
The California Department of Insurance has put together an FAQ on business insurance recognizing that COVID-19 is affecting many businesses throughout the state. The Department issued guidance for businesses regarding insurance coverage and particularly about Business Interruption Insurance coverage.
City of Morgan Hill water and wastewater services
To assist our residents and businesses during these uncertain times, Morgan Hill will not assess late penalties nor terminate services due to delinquency through June. We ask customers to reach out to Utility Billing for more information or request a payment arrangement.
Transient Occupancy Tax (Hotels Only)
To assist our Hoteliers, Morgan Hill will waive the penalties on late TOT payments for up to 30 days after the Shelter-In-Place Order is lifted. Please note that interest on late payments still applies.
Pacific Gas & Electric
PG&E has made service modifications for Impacted Customers.
- Suspended service disconnections for non-payment and waive new service deposit requirements for residential and small business;
- Implemented flexible payment plan options; and
- Provided additional support for low-income and medical baseline customers.
If a customer is experiencing financial hardships and has trouble paying their bill due to the economic impact of COVID-19, they can help. Please call PG&E at 1-800-743-5000.
RELATED TO EMPLOYEES (FOR EMPLOYERS)
Employers can receive payroll tax relief for providing employees with up to 80 hours for paid sick leave for those unable to come to work due to COVID-19 illness. Employers are compensated through reduced payroll tax payments. In addition, compensation is available to allow employees to take care of a family member or their child due to school closure. Additional information about the caps on compensation amounts, the duration of additional leave, and potential for small business exemptions is available through the Department of Labor www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave.
The State human resources website and Federal human resources website may provide good insights into the benefits and limitations of allowing employees to keep productive if they are unable to go to the job site.
County of Santa Clara Eviction Moratorium Includes Small Businesses:
The County of Santa Clara adopted a moratorium on residential and commercial evictions related to COVID 19. If the eviction is due to financial inability to pay rent or medical issues resulting from the coronavirus, commercial and residential tenants are safe from eviction through August 31 unless extended.
Santa Clara County has issued an Ordinance covering March 24 through to August 31, unless otherwise extended, ordering that small businesses located in the County renting or leasing real property for commercial, business, income-producing, or otherwise non-residential use, cannot be evicted for nonpayment of rent if such business suffered a substantial loss of income due to COVID-19. Refer to County Ordinance NS-9.289 for further details. The County’s ordinance relies on U.S. Small Business Administration (SBA) definitions of small businesses based on industry. Find detailed information and an FAQ on the Santa Clara County moratorium page.
On August 31, 2020, the State of California legislature enacted Assembly Bill No. 3088, effective immediately, that provides state-wide eviction and foreclosure protections for many tenants and property owners suffering from economic hardship due to COVID-19. For small business tenants who qualify for protection under the County’s ordinance, the County's eviction moratorium has been extended through August 15, 2021. Protected small business tenants have up to 6 months after the moratorium expires or terminates to repay at least 50% of the past-due rent, and up to 12 months after the moratorium expires or terminates to repay in full the past-due rent.
The residential tenant protections of the County’s eviction moratorium are deemed to have expired on August 31, 2020 and replaced by state law protections.