Federal Emergency Relief Package

As we all do our part to stay home to stop the spread of this disease, many businesses are struggling. They are forced to significantly change their operations or shut their doors completely during this crisis. The federal stimulus law provides relief to small businesses and nonprofits so that they may reopen their doors to the public when it is safe to do so.

In Vermont, 96% of businesses are classified as small businesses, employing over 155,000 Vermonters in good-paying jobs. I know many in Vermont will agree that our small businesses support and sustain our communities — it is critically important that the federal government step up to support them.

What You Need to Know about Support for Small Businesses and Nonprofits

$377 Billion Rescue Plan

$350 billion for small businesses and nonprofits to help maintain their existing workforce and help pay for other expenses like rent, mortgage interest, and utilities through forgivable loans. This program is known as the Paycheck Protection Program (PPP).
- Businesses may apply for up to $10 million to cover 8 weeks of average payroll. The loan will be forgiven if the business retains its employees at their salary levels.
  - Please note: not more than 25% of the loan forgiveness may be for non-payroll costs.
- Self-employed and gig workers are eligible for this assistance.
- This program is on a "first come, first serve" basis and funding is limited, so contact a lender promptly.
$10 billion in immediate relief to help small businesses and nonprofits with operating costs through Economic Injury Disaster Loans (EIDL).
- Businesses may apply for up to $2 million.
- Advances of up to $10,000 will be provided to businesses that apply for an SBA EIDL, known as an Emergency Economic Injury Grant. The grant does not need to repaid even if a business is subsequently denied an EIDL.
$17 billion to cover 6 months of payments for small businesses with existing SBA loans, as well as new borrowers who take out loans within six months — known as the Small Business Debt Relief Program.

How to Apply for Assistance:

To apply for the Paycheck Protection Program with an eligible lender, use this form: https://www.sba.gov/document/sba-form--paycheck-protection-program-borrower-application-form
To apply for an Economic Injury loan, and the advance of up to $10,000, click here: https://covid19relief.sba.gov/#/
The Small Business Administration coordinates with the Vermont Small Business Development Center, which can assist with applications and help businesses think through their options. Call 802-728-9101 or 800-464-7232, or request assistance here: https://www.vtsbdc.org/register/

Frequently Asked Questions:

Paycheck Protection Program (PPP)

How does the SBA's Paycheck Protection Program work?

The Paycheck Protection Program provides forgivable loans to help businesses pay workers, interest on mortgages, and utilities.

Who can apply?

Small businesses, sole proprietors, independent contractors, gig workers, self-employed people, agriculture businesses, and nonprofits. You must have been in business as of Feb. 15 in order to qualify.

Businesses must have 500 or fewer employees to apply, with some exceptions. Find out more here: https://www.sba.gov/federal-contracting/contracting-guide/size-standards

When can I apply?

Small businesses and sole proprietorships: April 3, 2020
Independent contractors and self-employed individuals: April 10, 2020

You must complete a PPP loan application and submit it to an approved lender by June 30, 2020. Click here for the application: https://www.sba.gov/funding-programs/loans/paycheck-protection-program-ppp

This program is on a "first come, first serve" basis and funding is limited, so contact a lender promptly.

Visit https://www.sba.gov/ for a list of SBA lenders.

How much can I apply for?

Up to $10 million to cover 8 weeks of average payroll. The amount you will receive is based on a formula that takes into account your average total monthly payroll costs. Independent contractor or sole proprietor loan applicants can use wage, commissions, income, or net earnings from self-employment or similar compensation to calculate loan amounts.

What is the interest rate of the loan?

The interest rate is 1%.

When will I need to make my first loan payment?

The first payment is deferred for six months.

Can I receive loan forgiveness?

You are eligible for loan forgiveness, equal to the amount you spend during the first eight weeks after a loan is originated, on expenses such as payroll, rent, mortgage interest payments, and utilities. However, only 25% of the forgiveness can be for costs other than payroll. The amount of loan forgiveness drops if you cut employees or reduce employees' wages by more than 25%. If you reverse those job cuts or wage reductions by June 30, then the loan forgiveness won't be reduced.

Who does the lending?

You can use lenders who participate in the SBA's 7(a) program. Check with your lender of choice, like banks and credit unions, to see if it is participating.

Visit https://www.sba.gov/ for a list of SBA lenders.

Economic Injury Disaster Loans (EIDL)

How much can I apply for?

Up to $2 million. The SBA will determine the amount based on how much economic harm you have suffered.

How is this different from PPP loans?

These loans are not meant to replace your lost revenues or sales. They are working capital loans to help you meet ongoing financial obligations that you could have met had a disaster not struck. These loans are often used in the aftermath of disasters like floods and hurricanes.

Who can apply?

Those eligible are the following with 500 or fewer employees:

Sole proprietorships, with or without employees
Independent contractors
Cooperatives and employee owned businesses
Most nonprofits of any size
Small agricultural cooperative and value-added producers including maple; farms are not eligible to apply at this time

What is the interest rate of the loan?

Small businesses: 3.75%
Nonprofits: 2.75%
Principal and interest deferment for up to 4 years

If I need help now, can I receive immediate funds?

Yes, you can receive up to $10,000 in the form of an advance when you apply for an EIDL, known as an Emergency Economic Injury Grant. The grant does not need to be repaid even if a business is subsequently denied an EIDL.

What can the grant be used for?

The grant 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.

Can I apply for both the PPP loan and an EIDL?

Yes, you can apply for both programs as long as the funds are used for different purposes, or you may refinance your EIDL into a PPP loan.

What if I applied for an EIDL before March 30th? Can I still receive the grant?

Yes. You must reapply in SBA's new system in order to request the advance quickly. If you wish to apply for the advance on your EIDL, please visit: https://www.sba.gov/disaster-assistance/coronavirus-covid-19 as soon as possible to fill out a new, streamlined application. Applying for the advance will not impact the status or slow your existing application.

How do I apply?

Visit the following SBA website to apply: https://covid19relief.sba.gov/#/

If you need additional assistance, you can find your local SBA office and resource partners at https://www.sba.gov/local-assistance/find/. If you have questions, you may also call 1-800-659-2955.

Refundable Tax Credits

If I have provided paid sick and family leave to my employees as a result of COVID-19, can I be reimbursed?

Yes. The first stimulus law passed in mid-March provides small and midsize employers refundable tax credits that reimburse them, dollar-for-dollar, for the cost of providing paid sick and family leave wages to their employees for leave related to COVID-19.

Find more information on the IRS website here: https://www.irs.gov/newsroom/covid-19-related-tax-credits-for-required-paid-leave-provided-by-small-and-midsize-businesses-faqs

Find more information on the Department of Labor website here: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions

If I am not eligible for the PPP program, or do not want to participate, is there any further relief available to my business?

Yes, an employee retention tax credit is available for struggling businesses.

What is it?

Any business that has been forced to fully or partially suspend operations, or has seen a drop in revenue, is eligible for a 50% credit for wages paid to furloughed or reduced-hour employees.

For businesses with 100 employees or fewer, the credit is based on all wages paid, regardless of whether an employee is furloughed.

Visit the following IRS site for more information: https://www.irs.gov/newsroom/irs-employee-retention-credit-available-for-many-businesses-financially-impacted-by-covid-19

Small Business Debt Relief Program

I have existing non-disaster SBA loans and am unable to make payments right now. Is there any relief for these payments?

Yes. The Small Business Debt Relief program will provide immediate relief to small businesses with non-disaster SBA loans, including 7(a), 504, and microloans.

What is covered?

All loan payments on these existing SBA loans, including principal, interest and fees.

How long will the loan payments be covered?

For 6 months.

Is this available for new borrowers as well?

Yes. This loan coverage is available for new borrowers who take out loans between March 27th and September 30th.

Find more information on the following SBA site: https://www.sba.gov/funding-programs/loans

My office is here — know that we are doing everything we can to fight for you and to be responsive. We will continue to provide helpful information as it becomes available. Do not hesitate to contact my office with questions or concerns. You can reach my office on our website, or by phone at 802-862-0697 or 1-800-339-9834.

We will get through this together — I have no doubt that when this pandemic is over, Vermonters will show their support for all of our small businesses.

Helpful Information Sheets:

Paycheck Protection Program Overview: here
Paycheck Protection Program — Borrowers Information Sheet: here
Small Business Owner's Guide: here
Nonprofit Resource Guide: here

You can find additional help by contacting the following organizations and agencies:

Vermont SCORE can assist with EIDL applications. Call 802-764-5899 or email: champlain.valley@scorevolunteer.org. Visit their website: https://champlainvalley.score.org/
The Center for Women and Enterprise can assist women-owned businesses. Visit their website: https://www.cweonline.org/About-CWE/CWE-Vermont
Vermont Agency of Commerce & Community Development has launched a COVID-19 Resource Recovery Center. For further business resources, visit their website: https://accd.vermont.gov/about-us/disaster-planning/covid-19-guidance-vermont-businesses
Vermont Department of Labor has resources and updates here: https://labor.vermont.gov/covid19

How Can We Help?

My Burlington office has a team of experienced caseworkers who help Vermonters navigate federal agencies every day. If you think my office can help you, please do not hesitate to call 1-800-339-9834 or (802) 862-0697, or click here.

If you would like to share your thoughts on pending legislation, or if you have an idea that we could address through new legislation, click here.