Financial Assistance Available for Small Businesses Affected by COVID-19 | Practicing DPMs | APMA
Financial Assistance Available for Small Businesses Affected by COVID-19

As the nation grapples with the health and economic impact of the COVID-19, the federal government and states are providing financial assistance to small businesses impacted by the disease and the efforts to stop the spread. APMA is providing current resources that may be available to eligible podiatric offices, and we encourage you to check back often as we continue to update this page as new information becomes available in the coming days and weeks. Page last updated on March 30, 2020.

APMA Assistance and Financial Relief for Members

APMA exists to support the podiatry community. In light of that fundamental commitment, APMA is announcing a new, multimillion-dollar relief plan for its members. APMA will continue to assess member needs and update you. In the meantime, if you have questions, please contact APMA at any time at ask@apma.org.

US Small Business Administration (SBA) Loans Resources

Paycheck Protection Program

Update: On March 31, the Treasury Department released guidance for borrowers under the Paycheck Protection Program. APMA is analyzing the guidance and will provide advice for members in the days to come. Click below to access the document from the Treasury Department. 

Access Borrower Guidance

Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply. More information is also available at https://home.treasury.gov/cares.

On March 27, the Coronavirus Aid, Relief and Economic Security Act (CARES) Act was signed into law establishing the Paycheck Protection Program, a $350-billion program to help small businesses with their payroll and operating costs during the crisis. The Paycheck Protection Program will be part of the US Small Business Administration Section 7(a) loans program, and the loans can be obtained through a Section 7(a)-approved lender. US Department of Treasury and the SBA will be publishing a list of approved-lenders. In the meantime, members should contact banks that they have a relationship with, or a bank in their community. Note: Loan forgiveness is available and tax-free; learn more about the requirements and application process.

The highlights of the program include:

  • Covers expenses from February 15–June 30, 2020; businesses cannot apply after June 30
  • Loan amount cannot exceed $10 million per loan or 250 percent of the average monthly payroll, whichever is less
  • Personal guarantee requirement is waived, and no collateral is required
  • Interest rate up to 4 percent
  • Small businesses, sole proprietors, independent contractors, self-employed individuals are all eligible

Loans can be used for:

  • Payroll
  • Health-care benefits and related insurance premiums
  • Employee compensation (with some limitations for employees with salaries more than $100,000 and exclusions for employees based outside the U.S.)
  • Mortgage interest obligations (but not principal)
  • Rent and utilities
  • Interest on debt incurred prior to the loan

Learn more about the Paycheck Protection Program by reading APMA consultant’s Hart Health Strategies Overview of Small Business Paycheck Protection.

To help the public better understand the new provisions in the law, the Senate Committee on Small Business provided answers to frequently asked questions.

Economic Injury Disaster Loan (EIDL)

The CARES Act also expanded Economic Injury Disaster Loan Assistance Program and relaxed the eligibility requirements. EIDLs offer up to $2 million in assistance and carry an interest rate of 3.75 percent for small businesses with a 30-year term. EIDLs have been available to small businesses and the CARES Act made independent contractors and sole proprietorship eligible. Additional program highlights include:

  • EIDL assistance available to small businesses in declared disaster areas and that now includes all 50 states and territories. Expanded loan period from January 31–December 31, 2020.
  • Loans may be used for payroll and other operating costs and obligations.
  • The CARES Act removed the requirements that borrowers cannot obtain credit elsewhere.
  • CARES Act removed the requirement that businesses must have been in operation for a year so long as they were in business by January 31, 2020.
  • CARES Act no longer mandates that EIDLs require a personal guarantee of for loans up to $200,0000. Loans for more than $200,000 must be guaranteed by any owner who have more than 20 percent or greater interest. 
  • Applicants can request an advancement of up to $10,000 to pay allowable working capital. Disbursements are to be made within three days.

Unlike Paycheck Protection Program, EIDLs do not have any loan forgiveness provisions. However, applicants that already applied for an EIDL loan can refinance their EIDL under the Paycheck Protection Program.

Eligible small businesses can apply for a loan at https://disasterloan.sba.gov/ela/. For questions, please contact the SBA disaster assistance customer service center at 1-800-659-2955 (TTY: 1-800-877-8339) or email disastercustomerservice@sba.gov.

Read more about both SBA Loan programs from APMA’s outside law firm Foley & Lardner, LLP. Additional information on SBA assistance and small business resources are provided by APMA’s health policy consultants Hart Health Strategies.

Are there state small business loans available?

Yes, APMA created this state-by-state spreadsheet of state-sponsored loans to help small businesses during the pandemic.

Are there other private loans and other resources available?

Bank/Credit Union Lenders

Federal agencies that regulate financial institutions are encouraging these institutions to work with their customers, especially small businesses, impacted by COVID-19. Specifically, FDIC has offered the following guidance for bank customers:

"In certain situations, the FDIC is encouraging banks to allow customers to skip loan payments with no adverse consequences for the borrower, extend loan terms, and restructure loans. However, before skipping payments or otherwise operating in a manner that differs from the terms of a loan, contact your bank to determine its flexibility during this time.

  • Immediately contact your creditors if you do not think you can pay your bills or make credit card or loan payments on time. Paying your debts late or not at all can result in penalties, interest charges, and damage to your credit score. Your creditors should be able to work with you on a solution, but it is important to contact them as soon as possible and explain your situation.
  • If you have additional concerns or a complaint with a business such as a financial institution or an insurance company, be proactive. First, contact the firm directly. If that does not produce the desired results, you may contact the appropriate federal or state regulatory agency for help or guidance."

Similarly, the National Credit Union Administration is advising credit unions to assist their members and work with borrowers affected by COVID-19. Recommendations include:

  • easing credit terms for new loans for members who qualify;
  • offering payment accommodations, such as allowing borrowers to defer or skip some payments, or extending the payment due dates, which would avoid delinquencies and negative credit bureau reporting caused by any COVID-19-related disruption; and
  • waiving late fees on loan balances.

Debt Relief and Financial Protection

The Consumer Financial Protection Bureau has provided resources and guidance on how individuals can financially protect themselves, including student loan deferment and other options. Visit the CFPB COVID-19 Resource page for more details.

Business Interruption Insurance

Podiatrists should also review their insurance policies (including property/casualty insurance policies) to determine if the policy includes business interruption insurance (also known as business income coverage). This insurance is a type that may replace loss of income or pay business expenses during a disaster. Podiatrists should speak with an insurance advisor to determine whether this insurance would apply during the COVID-19 pandemic.

At least one state legislature is considering mandating that property insurers cover COVID-19 as part of their business interruption policy. Specifically, the New Jersey Assembly is considering AB 3844. According to the official summary:

"This bill provides a mechanism by which certain businesses that suffer losses due to interruption as a result of the coronavirus disease 2019 pandemic may recover those losses from their insurer if they had a policy of business interruption insurance in force on March 9, 2020, the date on which the Governor declared a Public Health Emergency and State of Emergency in Executive Order 103. The bill would apply to businesses covered by such a policy with less than 100 eligible employees in the State of New Jersey. "Eligible employee" is defined as a full-time employee who works a normal work week of 25 or more hours."

Will paid sick leave be refundable for small businesses?

The Families First Coronavirus Response Act (HR 6201) included a refundable payroll tax credit to reimburse businesses for sick leave and family and medical leave wages paid to employees affected by COVID-19. For businesses that otherwise may not be able to afford the employee costs associated with COVID-19-related paid leave, the Treasury Department has stated that it will use its regulatory authority to advance funds to employers concerned about cash flow.

The bill requires employers to provide notice of eligibility for paid sick leave and family and medical leave to its employees. The Department of Labor will create a model notification within seven days following enactment of the bill.

Disclaimer: This resource is for information purposes only. APMA advises doctors of podiatric medicine to speak with an attorney or financial advisor duly licensed in their jurisdiction.

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