ABC-SEMI Issue 2 2020

Southeast Michigan Contractors  Issue 2 2020 15 The Coronavirus Aid, Relief, and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program (PPP), the initiative provides 100% federally guaranteed loans to small businesses. Importantly, these loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward. The administration has released initial guidelines; they are available at www.treasury.gov . The U.S. Chamber of Commerce has issued this guide to help small businesses and self-employed individuals check eligibility and prepare to file for a loan. Small businesses and sole proprietors can begin applying on April 3. Independent contractors and self-employed individuals can apply beginning on April 10. You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. While the program is open until June 30, 2020, the government is advising borrowers to apply as soon as possible given the loan cap on the program. Here are the questions you may be asking—and what you need to know. Prepared by the U.S. CHAMBER OF COMMERCE CORONAVIRUS EMERGENCY L ANS Small Business Guide and Checklist Updated: April 1, 2020 Am I ELIGIBLE? What will lenders be LOOKING FOR? You are eligible if you are: • A small business with fewer than 500 employees • A small business that otherwise meets the SBA’s size standard • A 501(c)(3) with fewer than 500 employees • An individual who operates as a sole proprietor • An individual who operates as an independent contractor • An individual who is self-employed who regularly carries on any trade or business • A Tribal business concern that meets the SBA size standard • A 501(c)(19) Veterans Organization that meets the SBA size standard In addition, some special rules may make you eligible: • If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis • If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply REMEMBER : The 500-employee threshold includes all employees: full-time, part-time, and any other status. Borrowers will need to complete the Paycheck Protection Loan Application (which is available HERE ) and payroll documentation Lenders will also ask you for a good faith certification that: 1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations 2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments 3. Borrower does not have an application pending for a loan duplicative of the purpose and amounts applied for here 4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan duplicative of the purpose and amounts applied for here (Note: There is an opportunity to fold emergency loans made between Jan. 31, 2020 and the date this loan program becomes available into a new loan) If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents (final requirements will be announced by the government) such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship. What lenders will NOT LOOK FOR • That the borrower sought and was unable to obtain credit elsewhere. • A personal guarantee is not required for the loan. • No collateral is required for the loan. Prepared by the U.S. CHAMBER OF COMMERCE 1 2 “STAY HOME, STAY SAFE” ORDER RESOURCES  March 23 – Governor Whitmer Issues Temporary Shelter in Place   Additional questions on essential vs. non-essential work: LEO-Coronavirus@michigan.gov  ABC Southeastern Michigan Chapter PAYCHECK PROTECTION PROGRAM (PPP) ECONOMIC INJURY DISASTER LOAN FAMILIES FIRST CORONAVIRUS RESPONSE ACT ABC NATIONAL ABC MEMBER PROVIDED RESOURCES STATE OF MICHIGAN – NEWS FROM GOVERNOR WHITMER STATE OF MICHIGAN RESOURCES ADDITIONAL RESOURCES  GOP Ways & Means  U.S. Small Business Administration  OSHA  Small Business Association of Michigan  Department of Labor Guidance  DOL Families First Response Act Resources RESOURCES FOR MORE UPDATES, VISIT: WWW.ABCMI.COM/NEWS/COVID-19