Guidance for Small Business Loans and Direct Payments
Today, we are sharing with you a video provided to us by the AmericanHort Association that provides valuable information to employers about small business administration loans and direct payment programs. This guide may prove useful to many ag business owners. Use the link below, to go to the AmericanHort website page with several webinars provided. The first webinar on the page is the one dealing with loans.
Paycheck Protection Program Update
New information was distributed today by the Small Business Administration regarding Paycheck Protection Program (PPP):
- An SBA press release provides the broad outlines of the new PPP, a program just enacted this past Friday as part of the CARES Act.
- The US Treasury Department posted a website with additional details about the PPP including several information sheets.
- SBA also updated its web site with details about the PPP which includes a link to a draft PPP application form.
- Based on the information, here is a broad overview of the PPP loan program expected to be offered starting on 4/3:
- The Lender: PPP loans will be made by banks, credit unions, and other regulated lenders, not by SBA. PPP loans will be backed by 100% SBA loan guarantees. SBA may approve additional lenders. Check with your local business banker to see if they are in the process of getting on board to deliver PPP loans, but realize that banks are still learning about their important role in delivering this program too.
- Eligible Borrowers: PPP loans will be made available to:
- Businesses (including nonprofits, sole proprietorships, independent contractors, and the self-employed) of all industry sectors (no mention so far of any excluded business sectors)
- In operation as of 2/15/2020
- With 500 or less employees (though there is special provision that may allow lodging, food service, and franchise businesses to qualify based on # of employees per location) – or businesses with more than 500 employees who nevertheless meet the SBA size standard for their industry sector.
- Loan Size: PPP loan size is set by the business’s typical pre-coronavirus monthly payroll times 2.5, but not to exceed $10 million. Monthly payroll is calculated based on the business’s typical cumulative wages/salaries/commissions/tips paid (not to exceed $100,000 per worker) plus benefits and payroll taxes paid.
- Use of Loan Proceeds: The loan is to be used to pay payroll (including to re-hire recently laid-off employees) through 6/30/2020, interest due on mortgages incurred before 2/15/2020; rent due on leases in place before 2/15/2020, and utility services in place before 2/15/2020,
- Collateral: None required
- Personal Guarantees by Owners: None required
- Demonstrated Financial Need/Credit Elsewhere Test: Not applicable for PPP loans
- Loan Structure: 0.5%, 2-year term loan – first payment deferred for 6 months; no prepayment penalty.
- Loan Fees: The business pays no fees. It appears SBA will pay a fee to the lender for processing and administering the loan, and the lender may elect to pay a portion of this to any agents they use, BUT the business is not to pay any fees.
- Loan Forgiveness: All or part of the loan may be forgiven. The amount will depend on how the PPP loan funds are used, with payroll being the primary use that leads to debt forgiveness. Some debt forgiveness may be given when the loan is used for mortgage interest, rent, and/or utilities. The full formula for debt forgiveness is not yet entirely spelled out, so watch for additional details. Using the PPP loan to pay payroll and maintain your workforce is the main path to maximum debt forgiveness.
- When and How to Apply: Applications will begin to be accepted soon, likely 4/3/2020, via a process that is still being developed. Applications are not being accepted yet. Please be patient.
Guidance for Businesses and Employers to Plan for the CoronavirusThis interim guidance is based on what is currently known about the coronavirus disease 2019 (COVID-19). The following interim guidance may help prevent workplace exposures to acute respiratory illnesses, including COVID-19, in non-healthcare settings. The guidance also provides planning considerations if there are more widespread, community outbreaks of COVID-19. Recommended strategies for employers to use now:
- Actively encourage sick employees to stay home:
- Employees who have symptoms of acute respiratory illness are recommended to stay home and not come to work until they are free of fever (100.4° F [37.8° C] or greater using an oral thermometer), signs of a fever, and any other symptoms for at least 24 hours, without the use of fever-reducing or other symptom-altering medicines (e.g. cough suppressants). Employees should notify their supervisor and stay home if they are sick.
- Ensure that your sick leave policies are flexible and consistent with public health guidance and that employees are aware of these policies.
- Talk with companies that provide your business with contract or temporary employees about the importance of sick employees staying home and encourage them to develop non-punitive leave policies.
- Do not require a healthcare provider’s note for employees who are sick with acute respiratory illness to validate their illness or to return to work, as healthcare provider offices and medical facilities may be extremely busy and not able to provide such documentation in a timely way.
- Employers should maintain flexible policies that permit employees to stay home to care for a sick family member. Employers should be aware that more employees may need to stay at home to care for sick children or other sick family members than is usual.
- Separate sick employees:
- Employees who appear to have acute respiratory illness symptoms (i.e. cough, shortness of breath) upon arrival to work or become sick during the day should be separated from other employees and be sent home immediately. Sick employees should cover their noses and mouths with a tissue when coughing or sneezing (or an elbow or shoulder if no tissue is available).
- Emphasize staying home when sick, respiratory etiquette and hand hygiene by all employees:
- Place posters that encourage staying home when sick, cough and sneeze etiquette, and hand hygieneat the entrance to your workplace and in other workplace areas where they are likely to be seen.
- Provide tissues and no-touch disposal receptacles for use by employees.
- Instruct employees to clean their hands often with an alcohol-based hand sanitizer that contains at least 60-95% alcohol or wash their hands with soap and water for at least 20 seconds. Soap and water should be used preferentially if hands are visibly dirty.
- Provide soap and water and alcohol-based hand rubs in the workplace. Ensure that adequate supplies are maintained. Place hand rubs in multiple locations or in conference rooms to encourage hand hygiene.
- Visit the coughing and sneezing etiquette and clean hands webpage for more information.
- Perform routine environmental cleaning:
- Routinely clean all frequently touched surfaces in the workplace, such as workstations, countertops, and doorknobs. Use the cleaning agents that are usually used in these areas and follow the directions on the label.
- No additional disinfection beyond routine cleaning is recommended at this time.
- Provide disposable wipes so that commonly used surfaces (for example, doorknobs, keyboards, remote controls, desks) can be wiped down by employees before each use.
- Advise employees before traveling to take certain steps:
- Check the CDC’s Traveler’s Health Notices for the latest guidance and recommendations for each country to which you will travel. Specific travel information for travelers going to and returning from China, and information for aircrew, can be found at on the CDC website.
- Advise employees to check themselves for symptoms of acute respiratory illness before starting travel and notify their supervisor and stay home if they are sick.
- Ensure employees who become sick while traveling or on temporary assignment understand that they should notify their supervisor and should promptly call a healthcare provider for advice if needed.
Planning ConsiderationsAll employers need to consider how best to decrease the spread of acute respiratory illness and lower the impact of COVID-19 in their workplace in the event of an outbreak. They should identify and communicate their objectives, which may include one or more of the following: (a) reducing transmission among staff, (b) protecting people who are at higher risk for adverse health complications, (c) maintaining business operations, and (d) minimizing adverse effects on other entities in their supply chains. Some of the key considerations when making decisions on appropriate responses are:
- Disease severity (i.e., number of people who are sick, hospitalization and death rates) in the community where the business is located;
- Impact of disease on employees that are vulnerable and may be at higher risk for COVID-19 adverse health complications. Inform employees that some people may be at higher risk for severe illness, such as older adults and those with chronic medical conditions.
- Prepare for possible increased numbers of employee absences due to illness in employees and their family members, dismissals of early childhood programs and K-12 schools due to high levels of absenteeism or illness:
- Employers should plan to monitor and respond to absenteeism at the workplace. Implement plans to continue your essential business functions in case you experience higher than usual absenteeism.
- Cross-train personnel to perform essential functions so that the workplace is able to operate even if key staff members are absent.
- Assess your essential functions and the reliance that others and the community have on your services or products. Be prepared to change your business practices if needed to maintain critical operations (e.g., identify alternative suppliers, prioritize customers, or temporarily suspend some of your operations if needed).
- Employers with more than one business location are encouraged to provide local managers with the authority to take appropriate actions outlined in their business infectious disease outbreak response plan based on the condition in each locality.
Additional Guidance for Business
- Review human resources policies to make sure that policies and practices are consistent with public health recommendations and are consistent with existing state and federal workplace laws (for more information on employer responsibilities, visit the Department of Labor’s and the Equal Employment Opportunity Commission’s websites).
- Explore whether you can establish policies and practices, such as flexible worksites (e.g., telecommuting) and flexible work hours (e.g., staggered shifts), to increase the physical distance among employees and between employees and others if state and local health authorities recommend the use of social distancing strategies. For employees who are able to telework, supervisors should encourage employees to telework instead of coming into the workplace until symptoms are completely resolved. Ensure that you have the information technology and infrastructure needed to support multiple employees who may be able to work from home.
- Identify essential business functions, essential jobs or roles, and critical elements within your supply chains (e.g., raw materials, suppliers, subcontractor services/products, and logistics) required to maintain business operations. Plan for how your business will operate if there is increasing absenteeism or these supply chains are interrupted.
- Set up authorities, triggers, and procedures for activating and terminating the company’s infectious disease outbreak response plan, altering business operations (e.g., possibly changing or closing operations in affected areas), and transferring business knowledge to key employees. Work closely with your local health officials to identify these triggers.
- Plan to minimize exposure between employees and also between employees and the public, if public health officials call for social distancing.
- Establish a process to communicate information to employees and business partners on your infectious disease outbreak response plans and latest COVID-19 information. Anticipate employee fear, anxiety, rumors, and misinformation, and plan communications accordingly.
- In some communities, early childhood programs and K-12 schools may be dismissed, particularly if COVID-19 worsens. Determine how you will operate if absenteeism spikes from increases in sick employees, those who stay home to care for sick family members, and those who must stay home to watch their children if dismissed from school. Businesses and other employers should prepare to institute flexible workplace and leave policies for these employees.
- Local conditions will influence the decisions that public health officials make regarding community-level strategies; employers should take the time now to learn about plans in place in each community where they have a business.
- If there is evidence of a COVID-19 outbreak in the US, consider canceling non-essential business travel to additional countries per travel guidance on the CDC website.
- Travel restrictions may be enacted by other countries which may limit the ability of employees to return home if they become sick while on travel status.
- Consider cancelling large work-related meetings or events.
- Engage state and local health departments to confirm channels of communication and methods for dissemination of local outbreak information.