New Small Business Relief Provisions Aimed at Healthcare Providers
- Emergency EIDL Grants: Expands eligibility for access to Economic Injury Disaster Loans (EIDL) to include businesses with fewer than 500 employees or any individual operating as a sole proprietor or an independent contractor. Establishes an Emergency Grant to allow an eligible entity who has applied for an EIDL loan due to COVID-19 to request an advance on that loan, of not more than $10,000, which the SBA must distribute within 3 days. Establishes that applicants shall not be required to repay advance payments, even if subsequently denied for an EIDL loan. Outlines that advance payment may be used for providing paid sick leave to employees, maintaining payroll, meeting increased costs to obtain materials, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.
- Loan Forgiveness: Establishes that the borrower shall be eligible for loan forgiveness of certain Small Business Administration loans under equal to the amount spent by the borrower during an 8-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020, and payment on any utility for which service began before February 15, 2020.
- Subsidy for Certain Loan Payments: Defines a covered loan as an existing 7(a) (including Community Advantage), 504, or microloan product. Requires the SBA to pay the principal, interest, and any associated fees that are owed on the covered loans for a six-month period starting on the next payment due. Loans that are already on deferment will receive six months of payment by the SBA beginning with the first payment after the deferral period. Loans made up until six months after enactment will also receive a full 6 months of loan payments by the SBA
- Employee retention credit for employers subject to closure due to COVID-19: This provision provides a refundable payroll tax credit for 50 percent of wages paid by employers to employees during the COVID-19 crisis. The credit is available to employers whose (1) operations were fully or partially suspended, due to a COVID-19-related shut-down order, or (2) gross receipts declined by more than 50 percent when compared to the same quarter in the prior year.
- Delay of payment of employer payroll taxes: The provision allows employers and self-employed individuals to defer payment of the employer share of the Social Security tax they otherwise are responsible for paying to the federal government with respect to their employees. The provision requires that the deferred employment tax be paid over the following two years, with half of the amount required to be paid by December 31, 2021 and the other half by December 31, 2022.
- Modifications for net operating losses: This provision relaxes the limitations on a company’s use of losses. Net operating losses (NOL) are currently subject to a taxable-income limitation, and they cannot be carried back to reduce income in a prior tax year. The provision provides that an NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years. The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income. These changes will allow companies to utilize losses and amend prior year returns, which will provide critical cash flow and liquidity during the COVID-19 emergency.
TO SEE IF YOU OR YOUR CLINIC ARE ELIGIBLE FOR THESE NEW OR ENHANCED PROGRAMS, GET STARTED HERE: https://disasterloan.sba.gov/ela/
For specific questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail firstname.lastname@example.org.
ACA members are also reminded to check https://www.acatoday.org/COVID19. We are constantly updating this site with useful information for you and your patients.