facebook twitter instagram linkedin google youtube vimeo tumblr yelp rss email podcast phone blog search brokercheck brokercheck Play Pause
Utilizing Coronavirus Relief Options For Small Businesses: A Guide Thumbnail

Utilizing Coronavirus Relief Options For Small Businesses: A Guide

With most of the country still under stay-at-home orders, many small businesses have been forced to adopt new practices in order to keep their employees and customers safe. For many, this has meant closing completely to help control the spread of coronavirus. Even as states and counties begin to relax measures and reopen, many businesses must still operate in a safe manner that complies with social distancing measures.

In response to the current pandemic, recent legislation including the Families First Coronavirus Response Act, the CARES Act and the Paycheck Protection Program and Health Care Enhancement Act have detailed a number of unemployment benefits, loans and relief for small business owners as well as the self-employed. 

If you’re a small business owner in America who has felt the financial devastation of this ongoing pandemic, there are options out there designed to offer relief and help keep your business afloat. 

Option #1: Access Loans and Immediate Emergency Funds

During this unprecedented time, small business owners and self-employed individuals are eligible to receive relief through the Paycheck Protection Program (PPP) as well as Economic Injury Disaster Loans (EIDL). SBA-approved lenders began offering these loans on April 3. Funding, however, ran dry on April 15 for the first round of the $349 billion program. To replenish the available funds, an additional $310 billion was approved and allocated to the PPP through the Paycheck Protection Program and Health Care Enhancement Act signed into law on April 24.1 

Paycheck Protection Program loans are meant to be used for payroll and compensation costs, healthcare benefits, mortgage interest, rent, utilities and interest incurred on other existing debts.1 They have been offered at an interest rate of one percent and with these loans, you’ll be given six months to one year before you are required to begin making payments.1 Typical fees, personal guarantees and/or collateral are not required to receive a PPP loan. 

Alternatively, Economic Injury Disaster Loans are offered directly from the SBA. Grants of $1,000 per employee up to $10,000 (updated June 5, 2020) are available as an advance within days of applying, in order to provide relief as quickly as possible.2 

Option #2: Operational and Payroll Debt Forgiveness

By taking out a loan under the Paycheck Protection Program, a portion will be forgivable as you will not be required to pay back the funds used for payroll, mortgage interest payments, rent and utilities in the eight weeks twenty four weeks (updated June 5, 2020) following its origination date.3 

One of the primary goals of this is to help companies stay in business and keep workers paid. The forgivable amount may be reduced if you have to limit either the number of employees you have or the compensation they receive, and those changes aren’t undone by June 30, 2020. December 31, 2020 (updated June 15, 2020)3.

Option #3: Employer Tax Credits

You may be eligible for an employee retention credit if your business closed to comply with government regulations or suffers a decrease in gross receipts of 50 percent or more, compared to the same period of time last year. This would amount to 50 percent payroll tax credit on wages up to $10,000 per employee and is not available if you’re utilizing a PPP loan.4 

The Families First Coronavirus Response Act has some requirements in the interest of public and economic well-being, but the tax credits offset these costs. Employer requirements include: 

  • Two weeks of paid leave to quarantined employees or those with coronavirus symptoms awaiting diagnosis. This amount is confined to 100 percent of their regular wages or minimum wage (whichever is higher) up to $511 per day, or $5,110 over two weeks. 
  • Two weeks of paid leave to those who are unable to work because they are caring for a quarantined loved one, limited to two-thirds of the employee’s regular wages or two-thirds minimum wage (whichever is higher) up to $200 per day or $2,000 over two weeks. 
  • Up to 12 weeks of paid leave for employees who must care for their children whose school or childcare is closed due to COVID-19. These payments are restricted to two-thirds of the employee’s regular pay or two-third minimum wage (whichever is higher) up to $200 per day or $12,000 over the 12-week period. When it comes to leave related to childcare and school closures, small businesses may be eligible for an exemption, provided that paid leave would put the business in jeopardy.5 

Employers and self-employed individuals are eligible for reimbursement of these payments and the costs to maintain employee health insurance coverage considering the expense of the associated requirements. In the form of tax credits, reimbursement is available for payments that take place between April 1, 2020 and December 31, 2020.5 

Option #4: Deferring Existing SBA Loans

You may have existing business loans guaranteed by the SBA, in which case they will be deferred for a six-month period.6 This means that payments will not be required, but the SBA will pay your lender beginning with the next due payment. If you have a current loan that is already being deferred, it will begin the six-month grace period after your current deferment has ended. 

Option #5: Delayed Tax Payments

Lastly, as a small business owner, you may delay payroll tax payments that would otherwise be due between now and January 1, 2021. Instead, half of the delayed taxes will be due on December 31, 2021 and the remaining amount will be due by December 31, 2022.7 

While staying in business is undoubtedly difficult during this time, federal and state aid is available. With a number of accessible grants and loan options, understanding the relief programs out there can help your small business get back on its feet in the long run.

  1. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
  2. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance
  3. https://home.treasury.gov/system/files/136/PPP--Fact-Sheet.pdf
  4. https://www.irs.gov/newsroom/covid-19-related-employee-retention-credits-general-information-faqs
  5. https://www.dol.gov/agencies/whd/pandemic/ffcra-employer-paid-leave
  6. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/sba-debt-relief
  7. https://www.irs.gov/newsroom/deferral-of-employment-tax-deposits-and-payments-through-december-31-2020


The information in this document is provided in good faith without any warranty and is intended for the recipient’s background information only. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. It is the responsibility of any persons wishing to make a purchase to inform themselves of and observe all applicable laws and regulations. Unauthorized copying, reproducing, duplicating, or transmitting of this document are strictly prohibited. Open Window Financial Solutions, Ltd. accepts no responsibility for loss arising from the use of the information contained herein.

Please remember that past performance may not be indicative of future results.  

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Open Window Financial Solutions, Ltd. - “Open Window”), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  

Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  

Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Open Window.  

Please remember that if you are a Open Window client, it remains your responsibility to advise Open Window, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. 

To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.

Open Window is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice.

A copy of Open Window’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request. 

Please Note: Open Window does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Open Window’s web site or blog or incorporated herein, and takes no responsibility for any such content.

All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.