Small Business Assistance
[February 23, 2021]
Mayor Gorton Requests More Tax Relief for Local Businesses
Mayor Linda Gorton is proposing a resolution providing additional tax relief for local businesses. The resolution gives businesses the ability to deduct expenses paid with Paycheck Protection Program funds in 2020. The request, which provides a clear message of support to our local business community, will go before the Urban County Council today (February 23, 2021).
Under the recommendation, businesses will be allowed to deduct expenses paid from PPP loans in 2020. The adjustment follows similar steps taken by the federal government, and under consideration at the state level. This move is expected to save the average Lexington business around $2,500 in local taxes.
The City has taken several actions to help local businesses through the pandemic, including allowing restaurants, bars and retail businesses to expand service onto sidewalks and parking lots, suspending ABC license fees, and offering a small business stimulus program that provided critical financial support for local businesses, especially those owned by minorities and women. There have been additional programs to support individuals and families needing assistance with rent, utilities, and food access.
Mayor Gorton Requests More Tax Relief for Local Businesses
Mayor Linda Gorton is proposing a resolution providing additional tax relief for local businesses. The resolution gives businesses the ability to deduct expenses paid with Paycheck Protection Program funds in 2020. The request, which provides a clear message of support to our local business community, will go before the Urban County Council today (February 23, 2021).
Under the recommendation, businesses will be allowed to deduct expenses paid from PPP loans in 2020. The adjustment follows similar steps taken by the federal government, and under consideration at the state level. This move is expected to save the average Lexington business around $2,500 in local taxes.
The City has taken several actions to help local businesses through the pandemic, including allowing restaurants, bars and retail businesses to expand service onto sidewalks and parking lots, suspending ABC license fees, and offering a small business stimulus program that provided critical financial support for local businesses, especially those owned by minorities and women. There have been additional programs to support individuals and families needing assistance with rent, utilities, and food access.
[February 2, 2021]
Variety of SBA Options Available for Small Business Recovery
PAYCHECK PROTECTION PROGRAM:
First Draw PPP loans are available for those borrowers who have not received a PPP loan before August 8, 2020. Second Draw PPP loans are for eligible small businesses with 300 employees or less and that previously received a First Draw PPP loan. These borrowers will have to use or had used the full amount of their First Draw loan only for authorized uses and demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million. The Paycheck Protection Program remains open for First and Second Draw PPP loans until March 31, 2021, as set forth in the Economic Aid Act, or until Congressionally-appropriated funding is exhausted.
LATEST PPP DOCUMENTS:
ECONOMIC INJURY DISASTER LOANS:
Economic Injury Disaster Loans or EIDL are now available through December 31, 2021, for small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue. Find out more about this type of loan option HERE. [Access the EIDL application on-line HERE]
SBA DEBT RELIEF:
As a part of the CARES Act, SBA is authorized to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans reported in regular servicing status (excluding PPP loans). This debt relief to borrowers was originally dependent on the loan being fully disbursed prior to September 27, 2020 and does not apply to loans made under the Economic Injury Disaster Loan (EIDL) program.
These original provisions were amended on December 27, 2020 through the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act (Economic Aid Act). The Economic Aid Act revised the eligibility criteria for assistance to include all 7(a), 504, and Microloans approved up to September 27, 2020 even if not fully disbursed. All other provisions for initial debt relief remained the same. Borrowers need not apply for this assistance. SBA provides this assistance automatically as provided below:
FIND OUT MORE ABOUT DEBT RELIEF ON-LINE HERE.
SHUTTERED VENUE OPERATORS GRANT:
The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the SBA’s Office of Disaster Assistance. Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. [VIEW FAQ DOCUMENT HERE]
Eligible entities include:
Other requirements of note:
SBA is in the process of setting up the grant program and is not yet accepting applications. Those who have suffered the greatest economic loss will be the first applications processed under the following schedule LISTED ON-LINE HERE.
Variety of SBA Options Available for Small Business Recovery
PAYCHECK PROTECTION PROGRAM:
First Draw PPP loans are available for those borrowers who have not received a PPP loan before August 8, 2020. Second Draw PPP loans are for eligible small businesses with 300 employees or less and that previously received a First Draw PPP loan. These borrowers will have to use or had used the full amount of their First Draw loan only for authorized uses and demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020. The maximum amount of a Second Draw PPP loan is $2 million. The Paycheck Protection Program remains open for First and Second Draw PPP loans until March 31, 2021, as set forth in the Economic Aid Act, or until Congressionally-appropriated funding is exhausted.
LATEST PPP DOCUMENTS:
- Interim Final Rule for Paycheck Protection Program as Amended by Economic Aid Act [VISIT HERE]
- Interim Final Rule on Second Draw PPP Loans [VISIT HERE]
- First Draw PPP Loan Application [VISIT HERE]
- Second Draw PPP Loan Application [VISIT HERE]
ECONOMIC INJURY DISASTER LOANS:
Economic Injury Disaster Loans or EIDL are now available through December 31, 2021, for small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue. Find out more about this type of loan option HERE. [Access the EIDL application on-line HERE]
SBA DEBT RELIEF:
As a part of the CARES Act, SBA is authorized to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 7(a), 504, and Microloans reported in regular servicing status (excluding PPP loans). This debt relief to borrowers was originally dependent on the loan being fully disbursed prior to September 27, 2020 and does not apply to loans made under the Economic Injury Disaster Loan (EIDL) program.
These original provisions were amended on December 27, 2020 through the Economic Aid to Hard-Hit Small Businesses, Non-Profits and Venues Act (Economic Aid Act). The Economic Aid Act revised the eligibility criteria for assistance to include all 7(a), 504, and Microloans approved up to September 27, 2020 even if not fully disbursed. All other provisions for initial debt relief remained the same. Borrowers need not apply for this assistance. SBA provides this assistance automatically as provided below:
- For loans not on deferment, SBA will make monthly payments based on the next payment due on eligible loans for a total amount equivalent to no more than 6 months of installment payments.
- For loans currently on deferment, SBA will begin making monthly payments with the first payment due after the deferment period ends for a total amount equivalent to no more than 6 months of installment payments.
FIND OUT MORE ABOUT DEBT RELIEF ON-LINE HERE.
SHUTTERED VENUE OPERATORS GRANT:
The Shuttered Venue Operators (SVO) Grant program was established by the Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act, signed into law on December 27, 2020. The program includes $15 billion in grants to shuttered venues, to be administered by the SBA’s Office of Disaster Assistance. Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees. [VIEW FAQ DOCUMENT HERE]
Eligible entities include:
- Live venue operators or promoters
- Theatrical producers
- Live performing arts organization operators
- Relevant museum operators, zoos and aquariums who meet specific criteria
- Motion picture theater operators
- Talent representatives, and
- Each business entity owned by an eligible entity that also meets the eligibility requirements
Other requirements of note:
- Must have been in operation as of February 29, 2020.
- Venue or promoter must not have received a PPP loan on or after December 27, 2020.
SBA is in the process of setting up the grant program and is not yet accepting applications. Those who have suffered the greatest economic loss will be the first applications processed under the following schedule LISTED ON-LINE HERE.
SBA & Treasury Department Release Forgiveness Loan Application for Paycheck Protection Program
The U.S. Small Business Administration and Department of the Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions. Additional guidance for both borrowers and lenders will be forthcoming, according to Congressman Andy Barr's office.
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
The U.S. Small Business Administration and Department of the Treasury released the Paycheck Protection Program (PPP) Loan Forgiveness Application with detailed instructions. Additional guidance for both borrowers and lenders will be forthcoming, according to Congressman Andy Barr's office.
The form and instructions inform borrowers how to apply for forgiveness of their PPP loans, consistent with the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). SBA will also soon issue regulations and guidance to further assist borrowers as they complete their applications, and to provide lenders with guidance on their responsibilities.
The form and instructions include several measures to reduce compliance burdens and simplify the process for borrowers, including:
- Options for borrowers to calculate payroll costs using an “alternative payroll covered period” that aligns with borrowers’ regular payroll cycles.
- Flexibility to include eligible payroll and non-payroll expenses paid or incurred during the eight-week period after receiving their PPP loan.
- Step-by-step instructions on how to perform the calculations required by the CARES Act to confirm eligibility for loan forgiveness.
- Borrower-friendly implementation of statutory exemptions from loan forgiveness reduction based on rehiring by June 30, 2020.
- Addition of a new exemption from the loan forgiveness reduction for borrowers who have made a good-faith, written offer to rehire workers that was declined.
