What's in the U.S. Small Business Rescue Program?

Author: Kelley Donald/Monday, April 27, 2020/Categories: Business Internet

The United States government launched the U.S. Small Business Rescue Program to help business owners with up to 500 employees pay their operating expenses if their business closed as a result of shelter-in-place or stay-at-home orders due to the coronavirus pandemic.

The program exhausted the first round of funding with unprecedented speed. On Thursday, April 23, the House passed a bill, previously passed by the Senate, to add another $484 billion worth of funding for coronavirus relief. A total of $310 billion of that is going to the Payroll Protection Program (PPP). The president signed the bill into law on Friday, April 24.

According to the SBA's website, the Paycheck Protection Program officially resumes today (Monday, April 27). As such, qualifying businesses can once again begin applying for federal funding.

Like the first relief fund, the new money will go to help businesses struggling to pay rent, payroll, and other operational expenses during the pandemic.

Understanding the Provisions of the Small Business Rescue Program

The initial small business stimulus package had several provisions. The largest and most well-known was the PPP. The additional funding is going largely to replenish the PPP and make these emergency funds available to more business owners through Small Business Administration (SBA) loans.

Under the Paycheck Protection Program, businesses and independent contractors (sole proprietors) can apply for a small business loan. Most of the loans would be forgiven as long as the business maintained the same amount of full-time staff as before the pandemic. Also, it cannot reduce salaries by more than 25% for any employees making less than $100,000 annualized in 2019.

If business owners did lay off or furlough employees, they have until June 30, 2020, to rehire those employees or restore their salaries to meet the PPP loan guidelines.

Funds from the SBA payroll protection loan could go toward:

  • Payroll costs (including sick leave, employee benefits, and payroll taxes)
  • Mortgage interest on business properties
  • Rent
  • Utilities

Utilities can include water, electricity, and your Consolidated Communications small business services, such as small business broadband internet and small business phone service. As long as you had signed up for CCI services before Feb. 15, 2020, you can use the money from the loan to pay your Consolidated Communications utility bill.

Up to 100% of payroll costs and up to 25% of non-payroll costs, including money used to pay utilities, may be forgiven as part of the program; the rest would have to be paid back as part of the low-interest small business stimulus loan.

EIDL and Other SBA Loan Options

Other provisions of the small business rescue program include the Economic Injury Disaster Loan (EIDL) emergency advance, which provided a $10,000 grant to eligible businesses. In spite of being called a “loan,” this money would not need to be paid back.

Small businesses that already have a relationship with an SBA lender may qualify for an SBA Express Bridge Loan, which is an emergency loan of up to $25,000. The loan would be paid off in full or in part with funds from the EIDL grant, but it could be available faster than an EIDL grant.

Is the Small Business Rescue Program Out of Funds?

If you were able to secure funds through the small business rescue program and Payroll Protection Program within the first two weeks of April, you are one of the fortunate business owners.

You can use the money to pay for the technology business infrastructure you need to manage a remote workforce, including Unified Communications solutions like Consolidated’s ProConnect, a cloud-based communications platform for businesses. As long as your system was in place from February 15 of this year, your PPP loan or EIDL grant can help cover these costs, as Consolidated is a utility provider.

For business owners who already received funding — and those who have applied for the next round — the next best steps could be to spend wisely. Focus first on payroll and then on the tools you need, such as small business internet, small business phone, and other telecom services, to keep your business running efficiently.

Keep checking back to the CCI blog throughout the pandemic for the latest news about funding solutions for small business owners under the Small Business Rescue program and other alternatives.

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