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Coronavirus (COVID-19)

Small Business Loans & Grants

The CARES Act that was recently signed as part of the government’s response to the Coronavirus (COVID-19) pandemic includes two programs for small businesses to receive funds in the form of loans, forgivable loans, and grants. In an effort to streamline the process for applicants, we are offering our services to assist with the processes involved in successfully obtaining the funding. These options will not be available for long, so if you are interested in applying, let us know immediately.

The CARES Act Programs for Businesses Affected by the Coronavirus (COVID-19): How to Apply for Forgivable Loans & Grants

The CARES Act Programs for Businesses Affected by the Coronavirus (COVID-19): How to Apply for Forgivable Loans & Grants

When: Friday, April 10, 2020 at 12pm PT | 2pm CT | 3pm ET

Where: Live Streaming Webcast: https://mehdiani.com/covid-19-funds

Presenter: Alan Mehdiani, CPA from Mehdiani Financial Management

Join us here on Friday, April 10 at 12pm PT / 2pm CT/ 3PM ET as Alan Mehdiani discusses the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) programs which are part of the recently signed CARES Act. Both programs offer funds for businesses and if used appropriately, do not have to be repaid. There will be an opportunity to ask questions following the presentation.

Topics covered:

  • Detailed overview of the Payroll Protection Program (PPP) and the Economic Injury Development Loans (EIDL)
  • Are you eligible and how do you apply
  • How much do you qualify for
  • How to get the loans forgiven
  • Which program you should apply for
  • Overview of unemployment for a business owner
  • Q&A session

Paycheck Protection Program (PPP) &

Economic Injury Disaster Loan (EIDL) Details

Paycheck Protection Program: Forgivable Loan for Up to 2.5 Months of Payroll

The Paycheck Protection Program (PPP) is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll. This program is for any small business with less than 500 employees (including sole proprietorships, independent contractors and self-employed persons), private non-profit organization or 501(c)(19) veterans organizations affected by coronavirus/COVID-19.

SBA will forgive loans if all employees are kept on the payroll for eight weeks and the money is used for payroll, rent, mortgage interest, or utilities.

Click here for more details on the PPP program.

Economic Injury Disaster Loan & $10,000 Advance that Does NOT Need to Repaid

The SBA’s Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

The loan advance of up to $10,000 will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. Funds are to be made available within three days of a successful application, and this loan advance will not have to be repaid, essentially making it a grant.

Click here for more details on the EIDL program.

This information is accurate and updated as of April 4, 2020.
Terms and conditions are subject to change.

Paycheck Protection Program: Forgivable Loan for Up to 2.5 Months of Payroll

The bill allots $350 billion for special SBA loans that may be partially forgiven if certain conditions are met. Lenders will be authorized to make loans equal to 250% of an employer’s average monthly payroll up to $10 million. Under that loan, eight weeks’ worth of payroll obligations (including wages and benefits), plus rent or mortgage payments and utilities will be forgiven, and the amount forgiven would not be treated as taxable income to the small business owner.

The new loans will be available through 800 SBA-approved banks, credit unions and other lenders. But the bill also calls on the SBA and Treasury to increase the number of lenders offering the new loans. And it calls on the agencies to expedite the loan process.

  • Who Can Apply:  Small businesses and nonprofits with fewer than 500 employees
    • Hospitality businesses (e.g., restaurants, bars, hotels, and RV parks) can treat each of their locations separately.
    • If you have more than 500 employees, you may still qualify.  Talk to your financial advisor.
  • When You Can Apply:  Lenders have started accepting applications.  Loans must be taken before June 30, 2020.   
  • How Much You Can Take:  The loan amount is capped at the lesser of 2.5 times your average monthly payroll or $10,000,000.
  • How Loans are Forgiven:  If you use the loan for “eligible expenses” during an 8-week period after your loan’s origination date, the amount up to the loan principal can be forgiven, tax-free.  Eligible expenses include:
    • Payroll costs, including salaries up to $100,000 (annualized) per employee, health insurance premiums, commissions, cash tips, and state and local payroll taxes – but not federal payroll taxes(1)
    • Interest payments on mortgages for real or personal property (but not principal or pre-payments)(2)
    • Rent(2)
    • Utilities(2)
  • Loan Forgiveness Is Reduced If:
    • You reduce your full-time equivalents (FTEs), including cutting hours, during the “covered period.”
    • You reduce the compensation of employees who make less than $100,000/year by more than 25% during the “covered period.”
    • Those who also take the $10,000 Loan Advance described below will see the amount of their loan forgiveness reduced by $10,000
    • However, you may avoid the reduction in forgiveness if:
      • You made no further cuts by 30 days after the passage of the Act.
      • You rehire and raise wages to prior levels by June 30, 2020.
  • Repaying the Loan
    • Your interest, principal, and fees will be deferred for 6 months.
    • The interest rate will be 1%.
    • Loan term is 2 years.
    • There are no prepayment penalties.
  • Other Considerations:
    • No collateral or personal guarantees are required.
    • Sole proprietors, independent contractors, and self-employed individuals are all eligible under this program.
    • If you already have an Economic Injury Disaster Loan (EIDL) through the Small Business Administration for COVID-19, you can refinance it into this program, but you cannot hold both loans for the same expenses. 

_____________________________________

(1) Does not include qualified sick leave or family leave wages that receive a credit under the Families First Coronavirus Response Act
(2) Mortgages, rental contracts, and utilities contracts must have been established prior to February 15, 2020 to be eligible.

Economic Injury Disaster Loan & $10,000 Advance that Does Not Need to BE Repaid

The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). Small business owners in all U.S. states and territories are currently eligible to apply. Small businesses may also apply to receive an economic injury disaster loan advance of up to $10,000 that does not need to be paid back. The money would be paid out to business owners within three days of a successful application submission. 

  • Who Can Apply:
    • Business entities with 500 or fewer employees
    • Sole proprietorships, with or without employees
    • Independent contractors
    • Cooperatives and employee-owned businesses
    • Tribal small businesses
    • Private nonprofits of any size
  • When You Can Apply:  Applications are available now.
  • How Much You Can Take:  Up to $2 million loan and up to $10,000 loan advance.
  • How Loans are Forgiven:  Only the $10,000 Loan Advance does not need to be repaid
  • Repaying the Loan
    • Your interest, principal, and fees will be deferred for 6 months to 1 year.
    • The interest rate will be 3.75% for businesses and 2.75% for nonprofits.
    • Loan terms can be as long as 30 years.
  • How Loan Advance is Forgiven:  The $10,000 loan advance does not need to be repaid. You may use the funds to:
    • Keep employees on payroll
    • Pay for sick leave
    • Meet increased production costs caused by supply-chain disruptions
    • Pay debts, rent, mortgage or other business obligations

Request SBA Relief Funds

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Schedule a Consultation

We are happy to answer additional questions. Mehdiani Financial Management is built on three core principles:

  • Excellent customer service – Should you have a question or concern, our pledge is to address them clearly and patiently.
  • We are dedicated to saving you money and providing you with the information you need to succeed.
  • Keep more of your hard-earned dollars via tax planning, top-notch bookkeeping systems, and full-service assistance with all of your tax, compliance and organizational challenges.

Locations

Beverly Hills Office:
9025 Wilshire Blvd, Suite 301
Beverly Hills, CA 90211

Encino Office:
16030 Ventura Blvd, Suite 490
Encino, CA 91436

Phone: (310) 800-1472
eFax: (310) 496-2565

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