More SBA Program Detail & some interesting State Updates

March 30, 2020

With a whole weekend to analyze the various bills and further updates from the Federal, State and Local governments, there is a lot to discuss today.  Below are some of the more relevant updates:

1. More info on EIDL, PPP and the PA Working Capital Loans (sent by Chad Bumbaugh at Stambaugh Ness)

  • Economic Injury Disaster Loans (EIDL) & $10,000 EIDL Grant
  • The question of the day (thus far at least) has been on applying for an EIDL loan to get the $10,000 EIDL grant made available by the CARES act.
    • The $10k grants are to be provided within 3 days of request
    • These grants are first come, first serve with funding at roughly $10 billion
    • To be used to cover sick leave, retaining payroll, paying rent, or covering “obligations that can’t be met due to revenue loss” – should be an easy hurdle to clear.   Only requires a self-certification of eligibility.
  • Businesses DO NOT have to take out the EIDL loan to get the grant and even if EIDL application is DENIED businesses can get the $10k grant
    • The EIDL loan does not have any provisions currently for forgiveness outside of the $10,000 grant
  • Important Note:  If applying for both the EIDL and PPP loans my understanding is the $10,000 grant essentially becomes an “advance” on any PPP loan forgiveness.     The PPP loan forgiveness that is calculated is to be reduced by the EIDL grant.
  • To apply for an EIDL loan the SBA is the place to go – specifically
  • Paycheck Protection Programs (PPP) (potentially forgivable loans)
  • PPP will be administered by banks (on behalf of the SBA).
  • They are to received guidance on the PPP loans by April 11th but goal is for banks to begin processing requests this week.
    • Suggest contacting your bank now for their input on timing & next steps.
  • Loans are expected to be funded after April 11th – most likely mid to late April based on what I’m reading now but things are moving quickly.
  • PA Working Capital Loans I’ll also note that the PA PIDA loan ($100k working capital loans at 0% interest) are, to my knowledge, still in play.  I’ve not seen any sort of announcement that those funds have been fully allocated to date.
    1. Taking an EIDL or PPP loan does appear to remove the ability of businesses to 1) defer payroll taxes and 2) to take the employer retention credit which provides a 50% credit on payroll taxes for qualified wages per quarter for employers under 100.   The credit is a maximum of $5k per employee with limitations related to wages & payroll taxes.    The site at following link provides one of the best analysis of the interplay between the programs I’ve seen thus far today. .  The PA working capital loans do not appear to have any direct impact on the Federal programs.

2. EisnerAmper provides a good overview of the various tax consequences of the CARES ACT in the following link (sent by Carey Gertler in his update email):

3. PA Unemployment Website issues a helpful FAQ for businesses and employees at the following link:  .

    1. Also, linked is a help guide for various paid sick leave, unemployment and workers comp as they relate for Covid 19 (sent by Patrick Barry in his update email).

4. Business Interruption Insurance Coverage Under the Microscope:  New York follows New Jersey by introducing a bill which would force the payment of certain business interruption insurance.  Massachusetts is also considering similar legislation.  These have not been passed, but I wanted you to be aware of there existence.  If passed, these could significantly shift the business insurance landscape.

    1. NY Bill:

5. PA Expands Stay At Home Order, Kids are out of school indefinitely (memo linked):  Also, here is a quick story on the announcement

6. What should business owners have ready to apply for the various programs?  Scott Stevens at 44 Capital sent the linked document as a great guide for documents to gather and other available resources.

7. Upcoming webinars and helpful resource Sites

  1. RKL has conducted a few webinars and has a useful slide deck for employers at the following link:  RKL Webinars & Resources
  2. Assessing the impact on Private Equity:  Read here

Please see all of our updates at the following link:

As always, please don’t hesitate to email myself or anyone in our office with any questions or comments. 

Also, please feel free to forward our updates to others. 

Keep moving forward!  We will get back to normal.


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