Dear Business Owners,
I know COVID-19 emails and information is everywhere, but I wanted to communicate what I believe will be key to surviving these uncertain times. You are all entrepreneurs and I know you have what it takes to survive this. If you have a business associate that is not a client of ours, still feel free to share this email, it’s about survival mode as a community.
About 16 minutes ago, the House has passed the $2T COVID-19 Relief Bill and it is moving forward to the President’s desk to sign.
Lots of things a business may need, but here is a top 4:
Cashflow- how is your cashflow position? You can apply for an SBA Disaster Loan Assistance by clicking here. If you are hurting or project to be hurting in a less than a month, I suggest you apply for this disaster loan right away. The new legislation passed today, includes a $350 billion loan program for businesses with fewer than 500 employees (including sole proprietors, independent contractors and anyone otherwise self-employed). Under the bill, loans can be used to meet payroll and cover certain other expenses like utilities or insurance premiums. Borrowers will be able to apply for loan forgiveness if they meet certain requirements. The new loans will be available through private financial institutions — i.e., banks, credit unions. Might be a good idea to check with your bank now to let them know you want to apply as soon as they have an application available, request to be put on a list. There is also a small business $10K emergency grant. If you need assistance on an application, please let us know.
Employees- Where are you at with employees? Can you keep the employees you have? Can you do reduced hours? What layoffs need to be made, etc. Small businesses (less than 500 employees) also face an April 1 effective date to provide paid sick leave to employees who aren’t working due to the coronavirus, under a separate stimulus bill passed by Congress last week. The IRS and the Department of Labor have instituted a 30-day nonenforcement period for good faith compliance errors. Under this policy, Labor will not bring enforcement actions against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Companies will get federal tax credits for providing the paid leave. Companies with fewer than 50 employees may be able to apply for a waiver, although it’s uncertain when that process will be available. See prior email, Facebook Posts, Knowledge Center, and Blog for more information regarding the Families First Coronavirus Response Act and paid leaves. Reach out to your payroll provider regarding how to calculate the credits to claimed against your payroll tax return and delay for payroll tax deposits under CARES bill (employee retention credit too on payroll tax returns)
Budgeting- With the cash you have and cash you may get from loans or grant, what expenses should be paid? Need to prioritize expenses or schedule them out, etc. If you are collecting employee payroll taxes, you must pay those taxes to IRS and CA. I strongly recommend to not consider avoiding paying payroll taxes as an option to preserve cash. There is a 100% penalty of employee share of payroll taxes not paid that can be assessed to your personal social security number or anyone having responsibility for the payroll taxes (including bookkeepers). If you want do discuss options of not paying employer side of payroll taxes and how to go about it (which I don’t recommend), please let me know. Employers may request up to a 60-day extension to file CA state EDD payroll reports and deposit state payroll taxes without penalty or interest. The written request for extension noting the impact of COVID-19 must be received within 60 days from the original delinquent date of the payment or return.
Technology- If you are a nonessential business defined by the government, are you setup for yourself and employees to work remotely? If not, please let us know and I connect you to a IT professional to get that up and running. Do you a free Zoom account to do web conferences? Let us know if you need help getting familiar with a Zoom call. Get creative for new ways of doing business if you can.
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The Temecula Valley Chamber is staying open (although remotely) to help businesses and connecting business folks for needs, please reach out to them if you need anything (members or nonmembers). The point of the chamber is to connect business activity and they are doing anything and everything they can to meet this challenge during these difficult times. They have a good website for information on COVID-19 as it relates to business.
Any ideas of what you need from us? Any information missing? Any local bank contacts that you need? Please ask. We will all come out of this, be sure to adapt to the changing environment and stay strong for your employees and your families. Mike