Weekly Digest – 10 June 2020

Resources to Help You Survive – and Thrive – During the COVID-19 Pandemic

As painful as the shutdown has been, a recent study indicates that it may have prevented as many as 60 million COVID-19 infections in the U.S. and 285 million in China. Banning large gatherings had the most impact in France and South Korea, while evidence is mixed on the impact of school closures. The positive impacts of shutdown orders are largely invisible: a reduction in the number of infections and thus fatalities is hard to measure. However, the negative effects of increased unemployment and reduced economic output have been well documented. But, as an epidemiologist from Johns Hopkins warns, “The lockdowns were a pause button, not a cure. Any reduction in the occurrence of cases or deaths is temporary.”

Conditions may be improving, but we encourage you to gather and evaluate information to make the best decisions for you, your business and your family.

CARES ACT UPDATES

Economic Impact Payments (aka Stimulus Checks)

Don’t throw out that envelope that looks like a fake credit card – it might be your Economic Impact Payment. Since the week of May 18, IRS has been sending some people prepaid debit cards instead of checks. This article in US News has answers to common questions about these cards. The IRS website has also added a section on these debit cards to its FAQs on Economic Impact Payments, including instructions on what to do if you lose or destroy your card.

Paycheck Protection Program (PPP)

On June 5, President Trump signed the Paycheck Protection Program Flexibility Act (PPPFA), which eases the forgiveness provisions of the PPP and extends the time borrowers have to use the funds. There is still more than $1 billion left in the fund, so if you’ve been delaying applying, these changes may make it easier.

Here are nine things that change in the new law:

  1. The deadline for using those funds has been extended from June 30, 2020 to December 31, 2020. This is also the new deadline for rehiring workers.
  2. Only 60% of the loan needs to be spent on payroll to be eligible for forgiveness.
  3. The payback period has been expanded from two years to five years.
  4. Penalties for businesses that are unable to restore full headcount because they are not yet fully open have been removed.
  5. A safe harbor provision has been added for businesses that made a good faith effort to rehire furloughed or laid-off staff but were unable to.
  6. Borrowers have 10 months to apply for forgiveness.
  7. Payments due on the loan will be deferred until a final decision is made by lenders and the SBA.
  8. The time to use the funds expands from eight weeks to 24, or until the end of the year.
  9. PPP loan recipients can defer the employer portion of Social Security taxes until the end of the year. See below for more details.

However, there are questions about how these updates will interact with the current SBA rules. The SBA and the U.S. Treasury are beginning to work on modifying procedures and guidance for the changes.

Deferral of Certain Payroll Taxes

Another incentive for employers to retain their employees is the ability to defer some payroll taxes through the end of 2020. Employers are permitted to defer payment of the employer portion of Social Security tax (6.2% of covered wages) through 2020. The full amount deferred can be repaid in two equal installments, due by December 31, 2021 and December 31, 2022.

Previously, business owners who received a PPP loan could only defer payroll taxes until they received notice that their PPP loan had been forgiven. But under the new Flexibility Act, PPP loan recipients may defer payment of those taxes for all of 2020, even if the PPP loan is forgiven before the end of 2020. The IRS has posted drafts of Form 941 and instructions to be used for the remainder of 2020.

Economic Injury Disaster Loans (EIDL)

The SBA is still working through their backlog of loan requests, and is still only accepting new applications from agricultural businesses.

HELP FOR SMALL BUSINESS

Main Street Lending Program

The Federal Reserve’s Main Street Lending Program may be finally “days away” from opening, and may have launched by the time you read this. The Boston Federal Reserve, who will be administering this program, has posted details about how to apply, as well as a special page for borrowers, which also includes recordings of webinars. Additional FAQs about that program were posted on May 27, and include instructions on how to apply.

SBA Express Bridge Loan Pilot Program

Do you have an existing relationship with an SBA lender? If so, you might be eligible for an expedited loan of up to $25,000 through an extension of the SBA’s Express Bridge Loan program. Normally, this program is available to businesses in communities suffering from federal disasters, but this has been expanded to businesses sustaining losses from the COVID-19 pandemic. Loans through the expansion program are available through March 13, 2021.

Other Programs

Under the CARES Act, borrowers can get six months of payment relief on 7(a), 504 loans and Microloans from the SBA. This applies to new and existing loans. Get an overview of these programs and other help for small business over on SmartAsset. Startups and small businesses can find a list of programs, some national and some for specific states, over on Startup Space.

Applying for a loan isn’t the best answer for everyone. If your business can survive without a loan, you may be better off without one. Pivoting your business in a new direction can also help get you through these difficult days.

WORKING FROM HOME

By now, most people have their tech sorted out, and some people are going back to the office. But many people will be transitioning to working from home for the foreseeable future. Some tech companies have been embracing remote work for years, and as Trello does in this article, they are sharing what they’ve learned from the experience. Among their pointers are ideas for adding extra empathy for remote teams and some new routines that help remote workers avoid becoming hermits.

Security issues

End-to-end encryption increases security for video conferencing, but it also makes it more difficult for law enforcement to track down suspects in investigations. As a compromise, Zoom will be offering its strongest protection for paid users, while leaving free users with weaker protection. For users of Microsoft Teams, this article from data security company Netwrix has pointers for enhancing security.

If your network has been breached, the first thing all users should do is replace their password with a stronger one. However, a recent study showed that only about a third of users actually change their passwords, and only about a third of those create a stronger password.

Zoom fatigue

It’s not just remote workers who have a tough time with back-to-back Zoom calls. Children trying to learn are also having a tough time with video conferencing and technology. While most U.S. schools will be shutting down soon for the summer, it’s not yet clear what will happen come September.

LIVING WITH AND AFTER THE PANDEMIC

Reopening

Knowing how and when to reopen safely depends on local conditions and ensuring that employees feel safe in returning to work. This article in Harvard Business Review, written by an MD and a nurse, has eight questions that employers should consider before they bring people back in the office.

Reopening may not mean that everyone returns to the office. This lengthy article from PC Magazine argues that expanding remote work options as well as changing workplace culture to a focus on results rather than being present is essential for creating the workplace of the 21st century.

Preparing for the future

The COVID-19 pandemic shone a spotlight on how precarious the finances of many families are. For some, this may be motivation to develop a plan for recovering from a natural disaster, as the Neal Stern from the AICPA discusses in an interview. According to a survey he mentions, only about 15% of Americans have a plan to protect their finances in case of disaster. The AICPA’s program on financial literacy recommends five key steps to be prepared for future disasters.

Keeping healthy under difficult conditions

A key to the success of billionaires Warren Buffett, Bill Gates, and Mark Cuban is finding ways to rest and recharge in relatively ordinary ways. Bill Gates plays bridge, Warren Buffett plays the ukulele, and Mark Cuban watches Law and Order.

Stress and changes to our usual routines have resulted in increased rates of insomnia. Removing electronic devices from bedrooms, exercising and avoiding naps are among tips from sleep experts in getting back to healthy sleep habits.

GENERAL RESOURCES

We sincerely hope that you and your family are well and remain well. If you have any questions or concerns, don’t hesitate to reach out to us. We are all in this together!

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