COVID-19 Funding Options for You
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In our March Newsletter we told you about the $10,000 grant that the U.S. Small Business Administration (SBA) was giving out to Small Business Owners, Independent Consultants, and Sole Proprietors. Well, SBA ran out of money and began giving those who applied for the
Economic Injury Disaster Loan (EIDL) grant
, $1,000 per employee. So if you were the only employee for your company and you completed the EIDL before they ran out of money, you should have received $1,000 in your bank account from SBAD Treasury (see image above). You will not receive any notice with it because they don't have the staff to do any follow-up right now.
If you still have not applied for the EIDL up to $10K grant, c
urrently SBA is not taking any more EIDL applications. The link I sent you last month has now been changed and the application site has not opened back up as yet. I heard this week from SBA the site will be up soon so keep checking
here
. Please fill out the survey below to let us know if you received the EIDL grant as yet.
I have been attending webinars about the
Paycheck Protection Program (PPP) loan
and there is a lot you need to know. First, if you have not applied for it as yet, please apply ASAP through your bank or a financial institution that is authorized by SBA. The loan can be forgiven (a grant) if you use it according to SBA's requirements. If you do not use it according to the SBA's requirements, you will have to pay it back (a loan). Find out more below on the PPP loan.
Some States and Counties also have COVID-19 funds you can apply for, so check your state and county websites for more information. If you live in Montgomery County Maryland, the
Montgomery County Telework Assistance Program
will open up on
Wednesday, May 6, 2020 at 10:00 AM
. This is a new MoCo grant program that awards up to $2,500 to eligible MoCo businesses and non-profit organizations to allow them to purchase teleworking equipment and software in response to the pandemic.
Find more info here.
Varetta Huggins
Your Government Contracting Expert
President & CEO, V-Project Management Consulting, LLC
Leadership Council Member, National Small Business Association
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V-PMC received our funds from the PPP loan on 5/5/20. We submitted our loan application on 4/3/20 then on 4/10/20 our bank requested additional documents which were submitted on 4/13/20. On 4/30/20 we inquired about the status and found out that our application was waiting on the funds from the Stimulus Package which came in that week. We received a status on 5/3/20 that our application was submitted to PPP. We then received a docusign from PPP on 5/3/20 to add our bank info. We completed the docusign on 5/4/20 then we received the funds on 5/5/20 in our bank account.
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HAVE YOU RECEIVED THE EIDL GRANT MONEY AS YET? Up to $10K.
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COVID-19: Decoding the Payroll Protection Program
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Congress passed another bill valued at $484 Billion on Thursday 4/23/20 to help fund small businesses, hospitals, and testing, and as a result, the Payroll Protection Program (PPP) loan program was funded. On Monday 4/27/2020 at 10:30 a.m. EDT, SBA started accepting more PPP loan applications. You will need to complete the PPP Application form then submit it to your business bank or a lender. They will then ask you to provide additional documents for them to process your application.
How do you Qualify?
You have to meet one of the criteria below:
- Any small business concern that meets SBA’s size standards (either the industry based sized standard or the alternative size standard)
- Any business, 501(c)(3) non-profit organization, 501(c)(19) veterans organization, or Tribal business concern (sec. 31(b)(2)(C) of the Small Business Act) with the greater of:
- 500 employees, or
- That meets the SBA industry size standard if more than 500
- Any business with a NAICS Code that begins with 72 (Accommodations and Food Services) that has more than one physical location and employs less than 500 per location
- Sole proprietors, independent contractors, and self-employed persons
What you need to Apply:
- PPP Application
- Your Company's Info (TIN, Company Name, Address, Phone, Email, and POC Name)
- Owner's Info (Name, % Ownership, TIN, Title, Address)
- Average Monthly Payroll (include Payroll for all Employees, taxes withheld, lease/rent, mortgage interest, utilities for conducting business such as electricity, Internet, phone)
- Loan Requested Amount (Average Monthly Payroll x 2.5)
- Payroll Summary
- Your Company's Bank Name, Account Number, and Routing Number
Where do you Apply:
- Bank Lender Finder (use this to find the most current list of lenders)
- Other Financial Institutions such as Lendio, Kabbage, etc.
What you Need to Know:
If you receive the PPP loan, you will need to record everything to ensure you comply with the requirements of the loan. Here is what you need to know:
- The loan will be fully forgiven if the funds are used for what it was given: payroll costs, interest on mortgages, rent, and utilities.
- At least 75% of the forgiven amount must have been used for payroll.
- Loan payments will be deferred for six months.
- No collateral or personal guarantees are required.
- Neither the government nor lenders will charge small businesses any fees.
- Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels.
- Forgiveness will be reduced if full-time headcount declines, or if salaries and wages decrease.
- This loan has a maturity of 2 years and an interest rate of 1%.
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Section 3610 Guidance to CARES Act
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Government Contractors, did you know about this?
Section 3610
of the CARES Act permits Government agencies to reimburse, at the minimum applicable contract billing rates (not to exceed an average of 40 hours per week), any paid leave, including sick leave, a contractor provides to keep its employees or subcontractors in a ready state, including to protect the life and safety of Government and contractor personnel, for COVID–19 during a specified time period discussed below. On April 17, 2020, the Office of Management and Budget (OMB) issued Memorandum M-20-22, which provided guidance to the Executive Branch on understanding and applying the contractor paid leave authority of Section 3610 of the CARES Act (Section 3610). OMB guidance explains that Section 3610 provides agencies discretionary authority to reimburse contractors for paid leave, and that agencies should carefully consider if reimbursement for paid leave to keep contractors in a ready state is in the best interest of the Government.
This deviation is effective immediately. The authority may only be used for leave that a contractor has provided during the period of March 27, 2020 through September 30, 2020.
This deviation applies to FAR-based contracts and agreements . It does not apply to non-FAR 3 based contracts such as the leasing of real property. This deviation does not apply to indefinite delivery vehicles (IDVs) at the contract level. However, it may apply to task orders issued under an IDV (See Section 9.F for additional information on IDVs).
The authority for paid leave reimbursement can only be used if the funding has been certified. Reimbursement is only for contractor paid leave to its employees or subcontractors “to maintain a ready state, including to protect the life and safety of Government and contractor personnel,” and applies only to a contractor whose employees or subcontractors:
- Cannot perform work on a Government-owned, Government-leased, contractor-owned, or contractor-leased facility or site approved by the Federal Government for contract performance due to closures or other restrictions, and
- Are unable to telework or otherwise work remotely because their job duties cannot be performed remotely during the public health emergency.
Paid leave authority is discretionary not mandatory. Therefore, if a contractor submits a request, the COs must determine whether or not to use the authority to reimburse affected contractors for paid leave. The spread of COVID-19 may affect contractors in several ways, so communication with contractors is critical during this period of uncertainty. There are various considerations a CO must weigh when determining how to move forward taking into consideration the challenges a contractor may be facing and what is in the best interest of the Government.
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Setting Up Your Accounting System for PPP
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One of the requirements in Federal Government Contracting is to have an Accounting System. This is of utmost importance if you are applying for an SBA loan such as PPP. For SBA to know what you did with the PPP funds and if you met the requirements or not, they will need to check your financial reports. This means, you have to code your PPP loan and any expenses used to fulfill it.
How do you do that?
If you are a small business owner like me, you don't want to worry about financial reporting requirements along with all the work you are doing daily to keep your business operating. So you outsource your financial reporting which includes the PPP reporting requirements. Of course, if you prefer to complete the financial reporting requirements, go right ahead.
Here are some suggestions for an Accounting System: I use Intuit QuickBooks as my Accounting System.
- Have a discussion with your Accountant as to how to code COVID-19 income and expenses.
- Have your Accountant setup QuickBooks or your Accounting System with COVID-19 projects so you can trace the funds and expenses.
- Your Accountant should create projects for PPP, EIDL, Section 3610, and any other COVID-19 related funds.
- Your Accountant should setup charge codes for expenses under these projects.
- Make sure your Accountant is experienced in Government Contracting Accounting and understands Direct, Indirect, Overhead, and G&A costs.
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V-PMC at the Virtual Small Business Expo
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Virtual Small Business Expo
June 10-11, 2020
10:00 AM to 7:00 PM
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COVID-19 has restricted us from traveling across the United States and meeting small business owners face to face. However, it cannot stop us from meeting with you online and finding out how we can help you
Gain Access to over $500 Billion in Government Contracting
.
V-PMC invites you to the first ever
Virtual
Small Business Expo, June 10-11, 2020.
V-PMC will have a booth and Varetta will be speaking at a Workshop. You will also have access to other exhibitors and speakers. Join us and others by registering for FREE today.
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