Feds loosen emergency loan rules
The president recently signed an updated version of the Paycheck Protection Program that made a number of significant changes. Here are the most relevant for Taos small business owners.
It extends the covered period for loan forgiveness from eight weeks to 24 weeks following the date of loan disbursement. This provides greater flexibility for borrowers to qualify for loan forgiveness. Borrowers that have already received PPP loans retain the option to use an eight-week covered period.
It provides a safe harbor from reduced loan forgiveness based on reductions of full-time employees for borrowers who are unable to return to the same level of business they had before Feb. 15, 2020, due to compliance with new requirements.
It removes the limits on loan forgiveness for small businesses that were unable to rehire employees, hire new employees or return to the same level of business they had before the pandemic.
It raises the 25 percent cap on use of PPP funds for nonpayroll expenses – such as rent, mortgage interest or utilities – to 40 percent of the total loan. This reduces the required use of 75 percent for payroll expenses (in order to get maximum forgiveness) to 60 percent. Borrowers can still qualify for partial loan forgiveness if they use less than 60 percent for payroll.
It extends the repayment period for any unforgiven portion of the loan from two years to five years. It also extends the period for applying for loan forgiveness from six months to 10 months from the last day of the covered period.
Applications are still being accepted for PPP loans, but you need to move quickly. SBA approval must be obtained by June 30, and you need to allow time for your lender to process and enter your application.
To apply, follow these steps:
1. Verify your business’s eligibility.
2. Review the application and gather the necessary materials such as payroll tax filings and proof of lease, mortgage and utility payments.
3. Get in touch with your accountant and/or bank that disburses your payroll. Check to confirm that your lender is authorized to process your PPP loan. If you don’t have an account with an authorized lender, find a lender here: sba.gov/paycheckprotection.
Small business disaster loan program reopens
To further assist small businesses and nonprofits that are sustaining economic impacts from the pandemic, the U.S. Small Business Administration reopened its online application portal Tuesday (June 16) for the Economic Injury Disaster Loan (EIDL) and EIDL advance program.
The EIDL program offers longterm, low-interest loans to small businesses and nonprofits to alleviate temporary loss of revenue. EIDL funds can be used to cover payroll and inventory, pay debt or take care of other expenses. In addition, an EIDL advance grant – which does not have to be repaid – will provide up to $10,000 ($1,000 per employee) of emergency relief to businesses affected by COVID-19.
“The SBA is strongly committed to working around the clock, providing dedicated emergency assistance to the small businesses and nonprofits that are facing economic disruption due to the COVID-19 impact,” said SBA Administrator Jovita Carranza in a statement. “With the reopening of the EIDL assistance and EIDL Advance application portal to all new applicants, additional small businesses and nonprofits will be able to receive these long-term, low-interest loans and emergency grants – reducing the economic impacts to their businesses, employees and communities they support.”
Carranza added that the SBA has added new technology and automated tools to help meet the unprecedented need and streamline the application and loan-closing process.
In a nutshell: SBA’s EIDL and EIDL Advance:
The SBA is offering low-interest federal disaster loans that provide working capital to small businesses and nonprofits suffering economic injury from COVID-19 in all United States, territories and the District of Columbia.
You may use an EIDL to pay debts, payroll, accounts payable and other bills that are not already covered by a Paycheck Protection Program loan. The interest rate is 3.75 percent for small businesses and 2.75 percent for nonprofits.
To keep your payments affordable, SBA offers repayment periods of up to 30 years and defers your first payment for one year.
As part of your loan application, you may request an EIDL advance of up to $10,000 to cover immediate economic shortfalls. You do not have to repay this advance, and you can still receive it even if you’re not approved for a loan.
The SBA is also assisting small businesses and nonprofits with access to the fully or partially forgivable PPP, which is currently accepting applications through June 30.
For details, visit sba.gov/disaster.
COVID-safe practices training
New Mexico Safe Certified, a new initiative launched Tuesday (June 16) to provide training in COVID-safe practices, is encouraging all businesses across the state to acquire NM Safe certification.
The industry-led project trains business owners and employees in COVID-safe practices to help ensure that customers, employees and families remain safe as New Mexico reopens for business and recreation. NM Safe Certified wants businesses to know they are not alone and customers to know they can feel confident about visiting businesses in a COVID-positive world.
NM Safe Certified offers numerous benefits:
Recognition as an NM Safe Certified business;
Alignment with the visible NM Safe Certified brand;
Use of the NM Safe Certified seal to promote your business;
Inclusion in the NMSafeCertified.org business directory; Access to the NM Safe Certified resource toolkit, including sample health questionnaires and liability waivers;
The latest news about revisions and updates to the All Together New Mexico: COVID-Safe Practices for Individuals and Employers;
Participation in statewide peer learning communities to share best practices, troubleshoot common challenges and access additional resources;
Admission to the Personal Protective Equipment (PPE) Procurement Collective.
Tourism-related businesses that have their employees complete the training will receive a $250 digital advertising credit per person up to $2,000 from New Mexico magazine. Credit may be used toward the purchase of one-month digital media packages through January 31, 2021.
NM Safe Certified training modules address a range of industries and recreations: hotels and lodging, restaurants, golf courses, tour operators, retail, spas and salons. Additional industry modules will be available soon.
For details, visit nmsafecertified.org.
N.M. bills would make COVID-19 reparations
State senator Cliff Pirtle (R-Roswell) is sponsoring two bills during the upcoming special legislative session beginning June 18 that would make reparations to businesses for losses they have sustained under the state’s COVID19 public health orders.
One bill would compensate small businesses that have been financially harmed by state public health orders. It establishes an agency to streamline the process for gaining reparations. According to Pirtle, this would eliminate the need for businesses to go to court to fight for their just compensation, which he claims is guaranteed by the state constitution.
“It is time for action. This special session gives us the opportunity to hear the desperate and passionate voices of small business people who are crying out to be treated fairly by their state government,” Pirtle said. “The Small Business Pandemic Takings Reparations Act is a strong first step towards helping to undo some of the harm the heavy hand of government has pounded on to our critically important small businesses.”
Pirtle’s other bill would grant all New Mexico businesses and taxpayers a temporary waiver of penalties and interest on gross receipts taxes that are not paid on time.
“This is a so-called shutdown of penalties,” Pirtle said. “This bill shuts down the penalties and interest on our taxpayers who were forced to shut down their business by the statewide order. If the state had the authority to shut them down, then the state can have the authority to waive their tax penalties and tax interest as they try to reopen and to rebuild their businesses this year. Paying their taxes to the government that closed the state should be the least of their worries at this time. They need to focus on surviving.”
The reparations bill would create a Pandemic Reparations Division as part of the Taxation and Revenue Department. It would enact a small business pandemic reparations tax credit and provide certificates of eligibility. The bill would also create a process for protests, create a fund and make the necessary appropriation.
The Tax Penalty Waiver bill would provide a temporary waiver of penalties and interest on certain gross receipts taxes to compensate tax liabilities due in 2020.
Need a Wi-Fi hot spot?
The New Mexico Department of Information Technology is putting together a Wi-Fi Parking Lot Hot Spot Locator within the Online Broadband Map.
The site includes Wi-Fi hot spots generously deployed by Internet Service Providers (ISP) and public agencies. Users will find the location of libraries, schools and city facilities allowing the free use of Wi-Fi. When clicking around the locator users will find pop-ups with facility names, addresses, hours of operation, password requirements and/or contact details. Tribal locations are only available to tribal members.
“It is important New Mexicans have access to the internet for work and school during this unprecedented time. The Department of Information Technology is working with state agencies and ISP’s to ensure free and open access to as many citizens as possible,” Cabinet Secretary John Salazar, NM Department of Information Technology, said in a statement.
Anyone using the hot spots should still adhere to social distancing policies, wear masks and maintain a six-foot distance from others.
The NM Online Broadband Map can be found at nmbbmapping.org/mapping.