Small Business FAQs
Are non-profits eligible for 7(a) loans?
501(c)3 non-profits are eligible. Physician practices are also eligible, no matter how they are structured.
Can small businesses hire back previously laid off employees and still have the loans forgiven? If so, what is the hire-back date?
Yes. There is flexibility in the program to allow businesses to hire new, or returning employees, by June 30, 2020, and still qualify under the headcount requirements.
How quickly will businesses be able to access loans?
Businesses can currently apply for both Paycheck Protection Program loans through their lender, and Economic Injury Disaster Loans (EIDL) through the Small Business Administration.
What does this bill do to provide relief for rural communities and farmers?
The bill includes several small business provisions designed to help farmers stay in business and take care of their employees during this difficult time. These include provisions that allow farmers to work with their trusted farm credit institutions for the purposes of securing payroll tax loans, along with 1-year deferrals, 100% guarantees, and low rates.
The bill provides $14 billion for the Commodity Credit Corporation (CCC), the funding mechanism for all major USDA programs. It also appropriates an additional $9.5 billion to specifically respond to losses due to COVID-19.
Additional funding is provided for USDA agencies that are on the front lines of responding to COVID-19, including the Food Safety Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the Farm Service Agency (FSA).
The bill also includes $100 million to provide financing for rural broadband through the ReConnect program, and $25 million for the Distance Learning and Telemedicine program to provide grants for equipment and connectivity improvements.
Employee retention credit – how will this work?
The Employee Retention Credit provides a refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee (including health benefits) paid by certain employers during the coronavirus crisis.
The credit is available to employers:
- whose operations were fully or partially shut down by government order limiting commerce, travel, or group meetings due to coronavirus, or
- whose quarterly receipts are less than 50% for the same quarter in the prior year.
Wages paid to employees during which they are furloughed or otherwise not working (due to reduced hours) as a result of their employer’s closure or economic hardship are eligible for the credit.
However, for employers with 100 or fewer employees, all employee wages qualify for the credit, regardless of whether they are furloughed or face reduced hours.
To prevent double-dipping, employers that receive Small Business interruption loans are not eligible for the credit. Additionally, wages that qualify for the required paid leave credit are not eligible for the credit.
The credit is for wages paid by eligible employers from March 13, 2020 through December 31, 2020.
Is Planned Parenthood eligible for SBA loans and grants?
No, Planned Parenthood is not eligible for SBA grants or loans. Originally, the Senate bill contained a clause that excluded nonprofits that received Medicaid (i.e. Planned Parenthood) from participating in the Paycheck Protection Program. This exclusion clause was ultimately removed from the final bill.
However, the final bill binds nonprofits to the SBA’s affiliation rules. The bill permits nonprofits to participate in SBA’s loan programs, provided they have 500 employees or less. Planned Parenthood is a nonprofit and is subject to the 500-employee cap and the affiliation rule. Therefore, Planned Parenthood and their affiliates are not eligible for SBA grants or loans, as they have more than the allowable 500 employees.
Are businesses that employ more than 500 employees across multiple locations eligible for the Paycheck Protection Program at each individual location?
A business is generally eligible for the Paycheck Protection Program if it is a for-profit business, 501c3, or 501c19 (veterans’ organization) nonprofit with fewer than 500 employees. There are a few exceptions. Businesses in the accommodation and food service industry (assigned a North American Industry Classification System code beginning with 72) with more than one location, a business could also eligible at the store and location level if the store employs fewer than 500 workers. In other words, each store location could be eligible.