April 2, 2020 Message from Lynn Fitch

Message from the Attorney General

This country was built on the ingenuity and hard work of small businesses. The Coronavirus pandemic has hit them hard and they are hurting – as are the 58.9 million men and women who work for them. Help is on the way, but it’s hard to navigate the funds that are available while trying to keep your business afloat. Here are some answers to some of the questions small business owners are asking:

What is the Paycheck Protection Program (PPP)?

The PPP provides up to $349 billion in loans to small businesses to help them pay their employees during the Coronavirus crisis. Loan payments will be deferred for 6 months; but loans will be forgiven if they are used to cover payroll costs and most mortgage interest, rent, and utility costs over the 8-week period after the loan is made. Employee and compensation levels have to be maintained.

Payroll costs are capped at $100,000 on an annualized basis per employee. Three-quarters of the loan proceeds must be used for payroll purposes. Loans become available to small businesses and sole proprietorships starting April 3, 2020 through existing Small Business Administration (SBA) lenders. Independent contractors and self-employed individuals can apply through existing SBA lenders starting April 10^th. And, the program will be available through June 30, 2020.

All businesses with 500 or fewer employees can apply. That includes nonprofits, veterans organizations, Tribal business concerns, sole proprietorships, the self-employed, and independent contractors. Some companies with more than 500 employees may apply, too, based on the SBA’s size standards for individual industries. If you have a small business in the hospitality or food industry with more than one location, you could be eligible for each store location.

There are no requirements for collateral or personal guarantees, and neither the government nor the lenders will charge fees. Loans are capped at $10 million.

You can apply online here: Click Here . You can also apply through any existing Small Business Administration (SBA) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution that is participating. You can find a list of SBA 7(a) lenders at www.sba.gov.

What are the Economic Injury Disaster Loans?

Governor Reeves’ request for a disaster declaration was granted on March 20. As a result, small business owners can apply for an Economic Injury Loan advance of up to $10,000. These working capital loans can be as large as $2 million. The loans may be used for any regular operational business expenses related to the loss of revenue from the Coronavirus pandemic, such as payroll, sick leave, inventory, production costs, rents or mortgages, etc.

Interest rates are 3.75% for small businesses and 2.75% for non-profits. Typically, this program requires a personal guarantee; but in these circumstances, that requirement has been modified or eliminated. Funds can be available within 3 days of a successful application and the advance does not have to be repaid. The loan application can be found here: Click Here .

What is SBA 7(a) debt relief?

The Small Business Administration will help small businesses by providing debt relief through its 7(a) loan program. Under this program, SBA will pay the principal and interest on new 7(a) loans issued before September 27, 2020. SBA will also pay the principal and interest of current 7(a) loans for up to 6 months.

What is the SBA Express Bridge Loan Pilot Program?

This pilot program is for small businesses that currently have a business relationship with an SBA express lender. It streamlines the paperwork to provide quick access to loans of up to $25,000. The proceeds can be repaid in full or in part by the proceeds from an Economic Injury Disaster Loan. The program expires September 30, 2020.

How can my employees access the new paid leave benefits?

Through the Families First Coronavirus Response Act (FFCRA), employees can access paid sick leave or expanded family and medical leave for reasons related to Coronavirus. These provisions apply to those who work for certain public employers and private employers with fewer than 500 employees. There are exemptions for employers with fewer than 50 employees if the leave would jeopardize the viability of the business. The program starts on April 1 and applies through December 31, 2020.

All employees who work for these covered employers are eligible for 2 weeks (up to 80 hours) of paid sick leave if related to the Coronavirus. That is, if an employee is unable to work (or telework) and needs leave because of

In addition, employees who have been employed for at least 30 days are eligible for an additional 10 weeks of paid family leave to care for a child, again, related to the Coronavirus. You can read more about the leave provisions of the FFCRA on the Department of Labor website: Click Here

I am proud of the many businesses – large and small – that are working hard to find innovative ways to help their employees and their customers through this crisis. We will get through this together and emerge stronger than ever.