|Created by the Community and Economic Development Clinic at American University Washington College of Law|
|U.S. Small Business Administration||Congress recently approved up to $7 billion in SBA disaster loans for businesses impacted by COVID-19. Applicants must show an acceptable credit history, ability to repay the loan, and a pledge of collateral for loans over $25,000. Maxium interest rate is 4%. Term of 30 years. Maximum principal of $2,000,000. ||https://disasterloan.sba.gov/ela/|
|-||The federal tax return filing deadline is now July 15, 2020. For tax payments of up to $10 million, the IRS has also extended the deadline for both individuals and businesses to July 15, 2020|
|Main Street Business Lending Program||The Fed plans to soon announce a Main Street Business Lending Program to support lending to eligible small-and-medium sized businesses, complementing efforts by the SBA. This entry will be updated once the Fed publishes further information on the program.||https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm|
|Primary Market Corporate Credit Facility (PMCCF) and Secondary Market Corporate Credit Facility (SMCCF)||The PMCCF will allow companies access to credit so that they are better able to maintain business operations and capacity during the period of dislocations related to the pandemic. This facility is open to investment grade companies and will provide bridge financing of four years. Borrowers may elect to defer interest and principal payments during the first six months of the loan, extendable at the Federal Reserve's discretion, in order to have additional cash on hand that can be used to pay employees and suppliers. The Federal Reserve will finance a special purpose vehicle (SPV) to make loans from the PMCCF to companies. The Treasury, using the ESF, will make an equity investment in the SPV.|
The SMCCF will purchase in the secondary market corporate bonds issued by investment grade U.S. companies and U.S.-listed exchange-traded funds whose investment objective is to provide broad exposure to the market for U.S. investment grade corporate bonds. Treasury, using the ESF, will make an equity investment in the SPV established by the Federal Reserve for this facility.
|The Commercial Paper Funding Facility (CPFF) and Money Market Mutual Fund Liquidity Facility (MMLF)||The MMLF will be expanded to to include a wider range of securities, including municipal variable rate demand notes (VRDNs) and bank certificates of deposit.|
The CPFF will be expanded to include high-quality, tax-exempt commercial paper as eligible securities, in an effort to facilitate the flow of credit to municipalities. In addition, the pricing of the facility has been reduced.
|Term Asset-Backed Securities Loan Facility (TALF)||The TALF will enable the issuance of asset-backed securities (ABS) backed by student loans, auto loans, credit card loans, loans guaranteed by the Small Business Administration (SBA), and certain other assets.||https://www.federalreserve.gov/newsevents/pressreleases/monetary20200323b.htm|
|CARES Act - Paycheck Protection Program||Based on the SBA's popular 7(a) loan process, this new loan program enables charitable nonprofits and for-profit entities with 500 or fewer employees to secure funds to pay staff and operating costs for two months. Follow the rules carefully, and the loans will be forgiven in whole or in part. Because this new program is being built on the SBA’s popular 7(a) process, which is run through about 1,800 local lending institutions (and efforts are underway to expand that number), the learning curve for private bankers should not be too steep (we hope). Still, the SBA has until April 11 to announce its guidance, so it will take a little while before employers can apply for these loans. Congress appropriated $349 billion for this program.|
Dollar Amount - The lesser of $10 million or 2.5 times the average total monthly payroll costs from the one-year period (look back) prior to the date of application. Express 7(a) loans available up to $1 million.
Non-Profit Eligiblity - Must have been in operation on 2/15/2020 and had paid employees and/or paid independent contractors. Expressly available for charitable nonprofits with 500 or fewer employees, but requires that employees of affiliated nonprofits may be counted toward the 500 employee cap, depending on the degree of control of the parent.
Terms - 4% interest rate; first 6 months of payments (principal and interest) automatically deferred. Maximum of 10 years
|CARES Act Expanded Economic Injury Disaster Loan (EIDL) & Emergency Grants [SBA 7(b) Loans]||Applies looser credit standards than the EIDL has had in place and creates a rapid grant procedure that could put $10,000 in a nonprofit’s hands within three days to pay salary and operating expenses. Not every charitable organization qualifies for the EIDL program, but it’s a valid option for many. The CARES Act set aside $10 billion total for the coronavirus disaster EIDL. |
Dollar Amount - Normal EIDL loans available up to $2 million; EIDL advances of $10,000 paid within 3 days.
Non-Profit Eligibility - In operation before 1/31/2020. Loans can be based solely on credit score. Existing EIDL program applies to “private nonprofit organizations” that excludes religious institutions and some other charitable organizations.
Terms - Normal EIDL: 2.75% interest rate for nonprofits; $10,000 advance treated as a grant.
|CARES Act Mid-Size Loan Program||May be right for nonprofit and other entities with between 500 and 10,000 employees. It’s designed to help ensure organizations can retain at least 90 percent of their workforces. The program is not yet designed and so the allocated funds are not readily availble to small businesses and non-profits in need. |
Dollar Amount - Not yet specified
Non-Profit Eligibility - Expressly applies to “nonprofit organizations”
Terms - Interest capped at 2% with no principle or interest paid for first 6 months.
|Unemployment Insurance||CARES Act provisions now include an additional $600 per week payment to each recipient for up to four months, and extend UI benefits to self-employed workers, independent contractors, and those with limited work history. The federal government will provide temporary full funding of the first week of regular unemployment for states with no waiting period and extend UI benefits for an additional 13 weeks through December 31, 2020 after state UI benefits end.|
|Tax Rebates||CARES Act provides $1,200 for single and head of household filers, $2,400 for joint filers, and an additional $500 per qualifying child. The rebate is reduced by 5% of excess income for taxpayers with a 2019 adjusted gross income (AGI) greater than $75,000 (single filers), $112,500 (head of household filers), and $150,000 (joint filers). This results in a complete phase out for taxpayers with greater than $99,000 AGI (single filers), $136,500 AGI (head of household filers) and $198,000 AGI (joint filers). |
Eligibility is based on a taxpayer’s 2019 income tax return. If a taxpayer has not filed a 2019 income tax return, then the IRS will base eligibility on a taxpayer’s 2018 return. If no returns were filed in 2018 or 2019, information from 2019 Forms SSA-1099 (Social Security Benefit Statement) and RRB-1099 (Social Security Equivalent Benefit Statement) will be used. Estates and trusts do not qualify for the $1,200 rebate.
|Bridge Fund||$100 million investment in businesses and workers grappling with the COVID-19 public health emergency in the hospitality, entertainment, and retail sectors. Through the Bridge Fund, the District will strategically invest to sustain the hospitality, entertainment, and retail industries to help mitigate the ongoing impact of COVID-19 on workers and businesses. Funds will be disbursed via four programs:|
Restaurant Bridge Fund: $35 million
Hotel Bridge Fund: $30 million
Entertainment Bridge Fund: $20 million
Retail Bridge Fund: $15 million.
Disbursement will begin with the Hotel Bridge Fund. All full-service hotels, limited service hotels, extended stay hotels, bed and breakfast facilities, inns and motels located in DC, with at least 10 rooms, will be eligible for the Hotel Bridge Fund, including those that have temporarily suspended operations or are operating in a limited capacity. Grant funds will be allocated on a per-key basis. The Restaurant and Retail Bridge Funds will both operate as application-based grant programs in December. The Entertainment Bridge Fund will be launched later this year.
Applications will open by program by December 22, 2020.