The purpose of this article is to try to bring together the possible loans, grants and other relief for small businesses throughout Palm Beach County. We are trying to bring clarity to what has become a blizzard of forms, filings and verifications. So, this is scratching of the surface, but we must all start somewhere.
I. SBA Economic Injury Disaster Loan Program
As part of its disaster assistance program, and unlocked under the Stafford Act, the SBA is providing low-interest working capital loans of up to $2 million to small businesses and nonprofits affected by the coronavirus in presidential and SBA-declared disaster areas. Florida is now a disaster area.
These loans may be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses. Business with credit available elsewhere are not eligible . I think it is fair to say that credit is most likely not available to any restaurant, bar, hotel or other tourist oriented business in Palm Beach County. However, this requires further research.
There are loans available to non-profits. An interesting questions is whether this includes homeowners and condominium associations so important to our area. This will require further research. The interest rate for non-profits is 2.75%.
These loans offer long-term repayments plans, up to a maximum of 30 years. Terms are determined on a case-by-case basis.
II. The Florida Small Business Emergency Bridge Loan Program
There is currently available to small business owners located in all Florida that experienced economic damage as a result of COVID-1 a small business emergency bridge loan. All Florida counties statewide per Executive Order 20-52. These short-term, interest-free working capital loans are intended to “bridge the gap” between the time a major catastrophe hits and when a business has secured longer term recovery resources, such as sufficient profits from a revived business, receipt of payments on insurance claims or federal disaster assistance.
The Florida Small Business Emergency Bridge Loan Program is not designed to be the primary source of assistance to affected small businesses. Loans made under this program are short-term debt loans made by the state of Florida using public funds; they are not grants. Florida Small Business Emergency Bridge Loans require repayment by the approved applicant from longer term financial resources.
Applications will be accepted by qualified for-profit, privately held small businesses that maintain a place of business in the state of Florida. All qualified applicants must have been established prior to March 9, 2020, and suffered economic injury as a result of the designated disaster. Qualified small business applicants must be an employer business with 2 to 100 employees.
Available is up to $50,000 for each eligible small business. Loans of up to $100,000 may be made in special cases as warranted by the need of the eligible small business. They must be repaid in one year. Loans will be interest-free for the loan term. The Interest rate will be 12% per annum on the unpaid balance thereafter, until the loan balance is repaid in full. Loan default is subject to a normal commercial collection process.
Applications will be accepted by qualified Florida small businesses under this program through May 8, 2020, contingent on the availability of funds. You may apply on-line by downloading the application and submitting it. Alternatively, it can be mailed to: Florida Department of Economic Opportunity, C/O Small Business Emergency Bridge Loan, 107 E. Madison Street, MSC-160, Tallahassee FL 32399-4120.
For questions regarding the Emergency Bridge Loan Program, you should contact the Florida Small Business Development Center whose toll-free number is (866) 737-7232. You may also want to click on this link: http://floridasbdc.org/covid-19/ebl/.
III. Federal Income Tax Filing and Payment Deadline Extension
The federal tax return filing deadline has been extended to July 15, 2020. For tax payments of up to $10 million, the IRS has also extended the deadline to July 15, 2020. Estimated tax payments for 2020 originally due on April 15 will now be due on July 15. As best we can determine, this is for all 2020 filings, but this requires further research. Check with your personal accountant to make sure all of your filings are postponed.
Florida, because it does not have a state income tax, has some special issues to confront. Real property taxes are based on the value of property as of January 1, 2020. There was little or no effect from coronavirus on that date. Yet, come November 1, 2020, full property taxes will be due without taking into consideration the impact on landowners across the state. This issue must be addressed immediately. Further, sales tax is due on commercial rents. Considering the impact on commercial renters, this issues must also be addressed. Wait for further information.
IV. Private Banks: Mortgages, Lines of credit and Other Financing
It could be that unlike the financial crisis of 2008-2009, the banks and other larger financial institutions will be willing to give the “little guy” a break. So far, we understand that Ally Bank, Bank of America, Capital One, Chase. Citibank, Fifth Third Bank, PNC Bank, U. S. Bank, Wells Fargo, Truist (formerly BB&T and SunTrust banks) and credit card companies such as Discover Card are offering a variety of relief programs. They all differ substantially and you must contact your bank or other financial institution to get qualification details but before writing the next check for a loan payment, we suggest you call them and have a talk.
V. Stay Tuned and Alert
The relief packages are changing every day. Please keep in touch with trusted sources on what may fit for your circumstances.
AND FOR CETAIN: BE CAREFUL ON THE INTERNET. There will be “Phishing sites” everywhere, that want your information or which may lock you out for a ransom. Stay in touch with your trusted professionals and close business allies on what is safe and what is phony.