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Springfield Chamber COVID-19 Policy Update June 16, 2020

COVID-19 data:

Information current as of June 16, 4:15 p.m.

Greene County:

  • 232 total cases
  • 8 total deaths
  • 15,290 diagnostic tests reported
  • 66 cases per 100,000 people

Missouri:

United States:

 

Things you need to know this week:

Information current as of June 16, 4:15 p.m.

Nationwide unemployment saw an initial 1.5 million claims in the first week of June, down 355,000 from the previous week. Continued claims were at 20.9 million, down 339,000. Total UI initial claims over the past 12 weeks is over 44 million.

State:
Governor Mike Parson announced guidance for Phase 2 of the state’s Show Me Strong Recovery plan, which begins Tuesday, June 16. All statewide restrictions will be lifted, though local officials will still have the authority to put further rules, regulations, or ordinances in place.

Governor Parson held two COVID-19 related press briefings last week – find summaries here from both of those updates.

Starting the week of July 5, 2020, individuals seeking unemployment benefits will be required to meet the work search requirement previously lifted for those filing a COVID-19 related claim. This includes regular unemployment benefits and the additional pandemic-related federal supplement, available through July 25, 2020.

Local:
Last week Mayor Ken McClure announced plans for the City’s next phase of their Road to Recovery plan, effective today. This phase includes increased occupancy restrictions in most categories to 50% and further encourages social distancing. Springfield Chamber President Matt Morrow also spoke at Friday’s press conference and highlighted business response efforts during this crisis.Find more specific Phase 2 information here.

 

Recent Changes to COVID-19 Assistance & Resources
Information current as of June 16, 4:15 p.m.

Since the onset of the coronavirus pandemic, there have been many uncertainties and unforeseen implications, many of which will continue as we move through reopening and recovery.

Unprecedented efforts have been made to help individuals and businesses successfully navigate this crisis at the local, state and federal levels. New guidance, information and resources are released daily, and in order to continue addressing the challenges and questions our members are facing, the Chamber has outlined multiple recent revisions COVID-19 aid here to help you sift through the constant influx of information.

Paycheck Protection Program Flexibility/Loan Forgiveness
The Paycheck Protection Program was originally enacted through the CARES Act, signed by President Trump in late March. This small business loan program was created to provide aid to businesses impacted by the coronavirus pandemic and encourages businesses to keep employees on the payroll.

On June 4, President Trump signed the Paycheck Protection Program Flexibility Act of 2020. This legislation altered several provisions of the Paycheck Protection Program to ease certain restrictions and burdens for borrowers. Changes include:

  • Extends loan maturity date from two years to five years.
  • Extends the “covered period” (deadline to use loan proceeds) to 24 weeks or Dec. 31, 2020.
  • Changes the loan use ratio to achieve maximum forgiveness from 75% payroll, 25% overhead, to 60/40 percent respectively.
  • Adds exemptions to FTE count loan forgiveness reduction penalties (there some ambiguity about what businesses this applies to).
  • Extends the loan deferral period.
  • Opens payroll tax deferral to all PPP borrowers.

Last week, the Small Business Administration released revisions to previous PPP rulings to incorporate the new passed changes. This new interim final ruling includes the following substantive changes:

  • The last day to apply for a PPP loan is June 30, 2020. 
  • Clarifies that the date the SBA assigns a loan number is the date the loan is considered “made.”
  • Clarifies that the 60/40 spending ratio refers to how much of your loan can be forgivable, not a threshold the borrower has to meet in order to apply for forgiveness.

Main Street Lending Program
The Main Street Lending Program was established by the Federal Reserve to “support lending to small and medium-sized businesses that were in sound financial condition before the onset of the COVID-19 pandemic” and is meant to help businesses who were unable to access PPP loans or require additional financial assistance. The program is not yet operational for borrowers to apply, however, lender registration is currently open.

The U.S. Treasury is providing $75 billion in equity that can be used for $600 billion in lending through three facilities: the Main Street New Loan Facility (MSNLF), the Main Street Priority Loan Facility (MSPLF), and the Main Street Expanded Loan Facility (MSELF). Each of these facilities provide different lending options; however, unlike PPP, Main Street loans are not forgivable.

Last week, the Federal Reserve expanded the program to make it more accessible for businesses. These changes include:

  • Expands the loan terms to five years.
  • Reduces the minimum loan amount from $500,000 to $250,000.
  • Expands the repayment period from four years to five years and delays the repayment period for two years.
  • Lenders now only assume 5% of the loans.

The Federal Reserve has provided a detailed FAQ document to answer questions and provide guidance on this program.

Employee Retention Tax Credit
The passage of the CARES Act included the the Employee Retention Credit, which encourages business to keep employees on their payroll.

According to the IRS, this tax credit is refundable, and is 50% of up to $10,000 in qualified wages paid by an eligible employer after March 12, 2020 and before January 1, 2021 whose business has been financially impacted by COVID-19. The maximum credit for an eligible employer for any employee is $5,000.

To be eligible, an employer must have fully or partially suspended operation in 2020 due to COVID-19 related orders from a governmental authority or have experienced a significant decline in gross receipts, meaning receipts are less than 50 percent of what they were at the same time last year.

The IRS has provided extensive information on this tax credit, like determining employer eligibility, what suspension of operations looks like, types of governmental orders, how to claim this tax credit and further tax relief options through FAQs on their website.

Deferral of payroll taxes
The CARES Act also allows for “employers to defer the deposit and payment of the employer’s share of Social Security taxes and self-employed individuals to defer payment of certain unemployment taxes” through December 31, 2020.

The recently enacted PPP flexibility act also allows employers who qualify for loan forgiveness to continue this deferment, with half of the deferred taxes due on December 31, 2020 and the remainder due December 31, 2022.

Originally under the CARES Act, once a PPP loan borrower qualified for loan forgiveness, they were no longer able to defer the deposit and payment of these taxes. It is unclear whether businesses who were previously not able to utilize this deferral provision are now able to retroactively apply this.

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