Tennessee has been hit hard—though not as hard as other states—by the coronavirus. Some medical professionals are calling on the Governor to order a shelter-in-place for up to four weeks. Governor Bill Lee has urged schools and non-essential businesses to close at least through the end of March. Many have. And that's been a hit on small businesses. Though it's understandable why businesses are closing, the economic reality is painful. And we don't know what the immediate future holds.
Fortunately, there is relief for small businesses coming from the Federal government. The Families First Coronavirus Response Act was signed by the President on March 18th, and this week, a $2 trillion stimulus deal appears likely to be passed by the Senate this week. Here's a summary of what this may mean for you and your small business in Tennessee:
Tax Relief for Small Businesses
If you are a small business employer, the Families First Coronavirus Response Act offers a new tax credit that may be applicable. This tax credit is to cover employees who have had to take time off due to the coronavirus, either because they got sick, they have to care for a child who is at home due to school and daycare closures, or have to care for a family member who is sick with the coronavirus.
Potentially, under this tax credit, you could collect up to 100% of qualified emergency sick-leave and family-leave payments you make in accordance with this same Act. However, this tax credit only applies from April 2, 2020 to December 31, 2020.
You also have move time to file and pay federal taxes. The IRS has extended the deadline for businesses to July 15, 2020, as opposed to the traditional April 15 deadline.
Loans for Small Businesses
The U.S. Small Business Administration (SBA) has a specific program for disasters like this one: the SBA Economic Injury Disaster Loan Program. This program provides low-interest working capital loans to small businesses in any state affected by the collateral consequences of the coronavirus. Loans are up to $2 million, and the interest rate is 3.75% for small businesses. Loan repayment varies per the applicant but can be set for a maximum of 30 years.
The loan can be used for things like:
- accounts payable
- payroll, and
To apply, go online and select "Economic Injury" as the reason for the needed assistance.
Corporate Small Business Assistance
In addition to some tax relief and small business loans, some corporations are offering assistance, like Facebook. Facebook is offering $100 million in cash grants and ad credits to 30,000 eligible small businesses. The program is meant to help small businesses affected by COVID-19:
- maintain a strong workforce
- pay rent
- communicate with customers, and
- cover operational costs.
The Key Takeaway
As a small business owner, you may be feeling the reality of the COVID-19 crisis right now. Rest assured there is at least some relief headed your way already and likely more in the coming days. These emergency actions could bring more relief to small businesses in and around Clarksville, Tennessee.
One important thing to keep in mind during times like these is this: we are resilient and are able to bounce back. There's nothing in the coronavirus scenario today that would suggest this time is any different. Hang in there, and if you need assistance with starting a small business, or have more questions regarding your small business, contact an experienced small business attorney in Clarksville today.