Third Phase of Federal Relief for Coronavirus: What Details We Know Right Now About the Legislation

While some companies have already begun to apply for relief from the Small Business Administration (SBA) and other government entities, others are waiting to see what additional programs may be on the horizon. While we do not know all the details of Phase III legislation in Congress, we do know it will include:

Support for Businesses

• $10 billion for SBA emergency grants of up to $10,000 to provide immediate relief for small business operating costs
• $17 billion for SBA to cover six months of payments for small businesses with existing SBA loans
• A retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis
• SBA loan forgiveness eligibility for rent, mortgage, and utility costs

Support for State and Local Government

• $150 billion for a state, tribal, and local Coronavirus Relief Fund
• $30 billion for the Disaster Relief Fund to provide financial assistance to state, local, tribal, and territorial governments, as well as private nonprofits providing critical and essential services
• $10 billion for the Indian Health Services and other tribal programs

Support for Industries

• $150 billion increase in the Marshall Plan for our healthcare system
• $30 billion in emergency education funding
• $25 billion in emergency transit funding

Support for Workers

• Increase in the maximum unemployment benefit by $600 per week
• Four months of unemployment insurance
• Ability for furloughed workers to receive unemployment and stay on as employees with their companies
• Protection for all workers, whether they work for small, medium or large businesses, as well as self-employed workers
• Worker protections included as a condition for all federal loans for businesses
• A retention tax credit for employers to encourage businesses to keep workers on payroll during the crisis
• Tax exclusion for individuals who are receiving student loan repayment assistance from their employer

Transparency and Oversight Provisions

• Creation of real-time public reporting of Treasury transactions under the Act, including terms of loans, investments, or other assistance to corporations
• Creation of Treasury Department Special Inspector General for Pandemic Recovery to provide oversight of Treasury loans and a Pandemic Response Accountability Committee to protect taxpayer dollars
• Banning of stock buybacks for the term of the government assistance plus one year on any company receiving a government loan from the bill
• Prohibition of businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs

While we are waiting for details these programs, we are encouraging our clients to begin collecting the following materials to assist in their applications:

• Complete copies, including all schedules, of your federal and state tax returns for your business for the last two years*
  • If the most recent federal income tax return has not been filed, a year-end profit and loss statement and balance sheet for that tax year is acceptable.
• A current year-to-date profit and loss statement*
• Monthly sales figures (SBA Form 1368)
• Complete copies, including all schedules, of the most recent federal income tax returns for each principal owning 20 percent or more of the applicant business, each general partner or managing member, and each affiliate when any owner has more than a 50 percent ownership in the affiliate business*
• A Personal Financial Statement (SBA Form 413) for:
  • the applicant (if a sole proprietorship); or
  • each principal owning 20 percent or more of the applicant business, each general partner or managing member
• A schedule of Liabilities listing all fixed debts. (SBA Form 2202 may be used)

*Government entities are encouraging businesses to apply for aid online, and as such, you should have PDF copies of these documents for submission online.

Securing these documents now will minimize the time it takes for you to apply for relief when the new programs are announced.

For more on these programs, please contact Jason Redd. We will, of course, continue to monitor the situation and update you accordingly.

To view all client alerts in Gibbons “The Coronavirus Pandemic and Your Business: How We Can Help” Series, click here. Please also be sure to follow Gibbons on LinkedIn for a continuous feed of COVID-19 related updates and other important business, industry, and firm news.