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Resources for Businesses

Here is some information, guidance, and resources for businesses during this time.

SBA Loan Resources

Payment Protection Program (PPP)

  • This program provides funding for a new loan program backed by the Small Business Administration (SBA) to help small businesses pay for certain expenses.  Small businesses can take loans that may be forgiven to keep employees on payroll.  The Federal government will forgive twenty-four weeks, or through December 31, 2020, of cash flow, rent, and utilities at 100% up to 2.5x average monthly payroll. Additionally, 501(c)(3) non-profits and physician practices will also be eligible for this program.
  • Businesses are required to spend 60% of their PPP funds on payroll.
  • Rehiring or hiring new employees
    • Businesses are allowed to hire new, or returning employees, by December 31, 2020 and still qualify for the PPP under the headcount requirements.
      • This applies to worker and wage reductions made from February 15 through March 27, 2020.
    • Provides forgiveness to businesses that document their inability to rehire workers employed as of February 15, 2020.
    • The SBA has continued to work on on-boarding new lenders and will adopt the legislation requirements as quickly as possible.
  • Debt Relief

    • For six months, the SBA is required to pay all principal, interest and fees on all existing SBA loan products including 7(a), Community Advantage, 504, and Microloan programs for six months.
  • Paycheck Protection Program (PPP) Loan Forgiveness Application

    • The deadline to apply for Paycheck Protection Program (PPP) Loan Forgiveness is August 8th.
    •  As of June 16, 2020, the Small Business Administration (SBA) and United States Department of the Treasury released the following revised PPP loan forgiveness application.
    • For borrowers that have the following qualifications, there is also a shorter EZ forgiveness application.  This application applies to borrowers that:
      • Are self-employed and have no employees; OR
      • Did not reduce the salaries or wages of their employees by more than 25% and did not reduce the number or hours of their employees; OR
      • Experienced reductions in business activity as a result of health directives related to COVID-19 and did not reduce the salaries or wages of their employees by more than 25%.

Resources:

- Updated FAQs about PPP

- Find Your Approved Lender Here

- Treasury Fact Sheet for Borrowers

- PPP Overview

- SBA Resources

- Economic Injury Disaster Loan (EIDL) Application

- SBA Local Assistance Map

Agriculture relief

  • Starting May 26, the United States Department of Agriculture (USDA) launched its financial assistance program for Ag producers that were affected by the Coronavirus (COVID-19).  The Coronavirus Food Assistance Program (CFAP) aims to provide financial assistance to agricultural producers who have suffered a five percent, or greater, decline or had losses due to disruptions in the market supply chain due to COVID-19.

  • Several new policies were enacted to help farmers and ranchers across Texas stay in business and take care of their employees during this difficult time.  These include provisions that allow farmers and ranchers to work with their trusted farm credit institutions for the purposes of securing payroll tax loans, along with 1-year deferrals, 100% guarantees, and low rates.

  • The USDA and its underlying agencies responding to COVID-19 were provided additional funding, including the Food Safety Inspection Service (FSIS), the Animal and Plant Health Inspection Service (APHIS), and the Farm Service Agency (FSA).

  • Rural broadband is being prioritized by adding $100 million to provide financing through the ReConnect program and $25 million for the Distance Learning and Telemedicine program to provide grants for equipment and connectivity improvements in rural communities.

  • As of April 24, 2020, agricultural enterprises with fewer than 500 employees can apply for EIDL through the SBA.

Resources:
The Coronavirus Food Assistance Program Information and Application

COVID-19 Aid for Farmers and Ranchers

- Texas Farm Bureau Resources for Ag Industry


Paid Leave Policy

Paid Medical Leave

  • Employers are required to provide notice of eligibility for paid leave to employees if they meet the following qualifying reasons:
    1. Being subject to a Federal, State, or local quarantine or isolation order related to COVID-19;
    2. Being advised by a health care provider to self-quarantine related to COVID-19;
    3. Experiencing COVID-19 symptoms and is seeking a medical diagnosis;
    4. Caring for an individual subject to an order described in (1) or self-quarantine as described in (2);
    5. Caring for a child whose school or place of care is closed (or child care provider is unavailable) for reasons related to COVID-19; or
    6. Experiencing any other substantially-similar condition specified by the Secretary of Health and Human Services, in consultation with the Secretaries of Labor and Treasury.
  • Employers are required to cover the first two weeks of paid medical leave at the employee’s standard rate of pay.  Employers may apply for sick leave and family leave tax credits to help pay for medical leave benefits. 
  • Businesses with fewer than 500 employees are required to provide 14 days of paid sick leave to employees affected by COVID-19. 
    • Additionally, under the Family and Medical Leave Act (FMLA) expansion, COVID-19 affected employees are entitled to up to three months paid leave at two-thirds of the employee’s pay.
    • Businesses with more than 500 employees do not have to provide 14 days of paid sick leave.
    • Businesses with fewer than 500 employees will receive a 100% tax credit for both types of leave up to capped levels, credited against quarterly payroll taxes.
    • Additionally, the Secretaries of Treasury and Labor will have regulatory authority to provide flexibility so small businesses under 50 employees are not unduly harmed.
    • Affected employees include those with COVID-19, under quarantine, caring for someone affected, and/or with children whose school has closed.

Resources:

- Department of Labor (DOL) Guidance 

- SBA Size Standards Table

- SBA Franchise Directory

Tax Credits

Net Operating Losses (NOL) Rollbacks

  • NOL limitations on a company’s use of losses put in place by the Tax Cuts and Jobs Act will be relaxed.  COVID-19 relief legislation provides that an NOL arising in a tax year beginning in 2018, 2019, or 2020 can be carried back five years.
  • The provision also temporarily removes the taxable income limitation to allow an NOL to fully offset income.

Other Tax Provisions

  • COVID-19 relief legislation currently provides 100 percent refundable tax credits to employers with regard to two categories of paid sick and family leave (described below) that employers must grant to employees under the bill to address employment interruptions related to COVID-19. 
    • The tax credits would be administered by the Internal Revenue Service (IRS) and be creditable against employer-side payroll tax liability, with any excess refunded to the employer. 
    • Refundable tax credits similar in scope and amount would be available to self-employed workers facing the same employment interruptions. 
    • Payments to employees would be taxable income to the employees and subject to employee-side payroll taxes, but not subject to the employer portion of payroll taxes. 
  • These provisions sunset on December 31, 2020. 

Payroll Credit for Qualified "Sick" Leave Wages

  • Certain employers are required to provide 80 hours (or 2 weeks) of fully paid leave to full-time employees (pro-rata rules would apply to part-time employees) on top of any other existing paid leave program of the employer to cover employees not working for the following uses:
    1. the employee is subject to a Federal, State, or local quarantine or isolation order related to coronavirus;
    2. the employee has been advised by health care provider to self-quarantine due to coronavirus;
    3. the employee is experiencing symptoms of coronavirus;
    4. the employee is caring for an individual who is subject to an order described in (1) or has been advised as described in (2);
    5. the employee is care for their child because the school is closed or child care provider is unavailable due to coronavirus; or
    6. the employee is experiencing a similar condition specified by Secretary of the Department of Health and Human Services (DHHS). 
    • Employers would be required to pay employees their full wages, not to exceed $511 per day and $5,110 in the aggregate, for a use described in (1), (2), or (3) above. 
    • Employers would be required to pay employees two-thirds of their wages, not to exceed $200 per day and $2,000 in the aggregate, for a use described in (4), (5), or (6) above.

  • Employers would receive a 100 percent refundable payroll tax credit on the wages required to be paid. 
  • The requirement to provide the paid leave would apply to all public sector employers and those private sector employers with less than 500 employees. The tax credit eligibility would only apply to those private sector employers with less than 500 employees. 
  • Secretary of Labor has authority to issue regulations to exempt small businesses with fewer than 50 employees if the above requirements would jeopardize the going concern of the business.

Payroll Credit for Qualified "Family" Leave Wages

  • Employers would also generally be required to provide ten weeks of paid leave.  Employers would be required to pay employees two-thirds of their wages, not to exceed $200 per day and $10,000 in the aggregate. 
  • This leave would cover employees who are not working because the employee is caring for their child because the school is closed or child care provider is unavailable due to a public health emergency. 
  • The requirement to provide the paid leave would apply to all employers with less than 500 employees.  Federal, state, and local governments are not eligible for the Credit. 
  • Employers would receive a 100 percent refundable payroll tax credit for the wages required to be paid. 
  • Secretary of Labor has authority to issue regulations to:
    1. exclude certain health care providers and emergency responders from the definition of eligible employee; and
    2. exempt small businesses with fewer than 50 employees if the above requirements would jeopardize the going concern of the business. 

You can find more information on the paid leave tax credits here:

- IRS Announcement of Paid Leave Tax Credits

Employee Retention Credit

The Employee Retention Credit provides a refundable payroll tax credit equal to 50 percent of up to $10,000 in wages per employee, including health benefits to employers that fall under the following qualifications:

  • Those whose operations were fully or partially shut down by government order due to coronavirus, or;
  • Those whose quarterly receipts are less than 50% for the same quarter in the prior year.

Wages paid to employees while they are not working as a result of their employer’s closure or economic hardship are eligible for the credit.  In instances where an employer has 100 or fewer employees, all employee wages will qualify for the credit, regardless of whether they are furloughed or face reduced hours.

Employers that receive Small Business interruption loans are not eligible for the credit.  Additionally, wages that qualify for the required paid leave credit are not eligible for the credit.

- IRS Guidance on Employee Retention Credit