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How Small Business Owners can utilize the Coronavirus Bill

How Small Business Owners can utilize the Coronavirus Bill

March 31, 2020

Information Small Business Owners Need to Know about the Coronavirus Bill


Paycheck Protection Program:

  • Program offered through the Small Business Administration to offer loans to business owners to encourage paying employees through the coronavirus epidemic.
  • Must verify that their business has been negatively affected by the coronavirus to qualify and have 500 employees or less.
  • Can go to our local banks (if SBA partner) to start the application for the payroll loan.
  • Loan amount will be calculated as 2.5 x the average monthly payroll (can only count income up to $100,000 for employees that make more than that figure); max amount of loan would be $10 million
  • Loan may be spent on payroll costs, continuing health care, rent, mortgage interest, paid vacation, payment of retirement benefits, and payment of local/state taxes
  • 8 weeks of the payroll expenses from the loan can be applied to be forgiven if money was spent on above specified payroll costs. If the employer doesn’t hire the same amount of people that were laid off, the employees make 25% less than they used to or there is a reduction in staff, the amount forgiven will be decreased.
  • For amount not forgiven, the maximum interest rate will be 4% and the first payments can be deferred for up to a year
  • If the loan is forgiven, the business is ineligible for deferring payroll taxes or receiving below tax credit.
  • Contact a local bank lender to see when the SBA will start accepting applications (hope was for them to start by April 4th)


Employee Retention Credit for Employers

  • Designed for businesses not receiving the above loans
  • To be eligible, a company had to be fully or partially suspended by a government authority or have 50% less revenue than the same quarter in 2019. Credit will continue until end of 2020, when the government required suspension has lifted or when gross revenue has reached 80% of what it was the previous year during the same quarter.
  • The tax credit is equal to 50% of employee wages up to $10,000 per employee. The definition of wages depends on the size of the business. For companies over 100 employees, they can only use the wages (up to $10,000 per employee) of employees not working during the government shutdown. Businesses with less than 100 employees may count all employees (up to $10,000 per employee) when calculating their credit.
  • Please work with your financial planner and accountant when determining these calculations.

Deferral of Payroll Taxes

  • Businesses that have their above payroll loans forgiven will not qualify for this section.
  • Employers can defer their “employer portion” payroll taxes from now until the end of 2020 to be paid by the end 2021 and 2022.
  • 50% of the payroll taxes (from now until the end of 2020) would be due December 31, 2021. The other 50% of the payroll taxes would be due December 31, 2022.
  • Self-employed people pay both the employee and employer portion of payroll taxes. They will also be allowed to defer the employer portion (so 50% of their payroll tax) while meeting the same deadlines as above.


Emergency Disaster Loans

  • These loans have been available before the bill and can provide for possibly faster access for small $ amounts of loans.
  • The bill’s goal is for these loans to be used for business owners that need small amounts of capital, but it is unclear if these loans can be applied for forgiveness like the payroll loans.
  • The bill states that applicants can get an advance of $10,000 three days after applying for the loan while also only relying on someone’s personal credit (instead of tax returns or personal guarantees) to see if a business is eligible.
  • You would apply directly through the SBA at for these loans. Interest rates are 3.75%/yr. and the first month’s payments can also be deferred a full year.
  • Contact your lender or business consultant to see if this is an appropriate option.


Miscellaneous notes specific to small business owners


  • Contact your 401k plan administrator if you have interest in stopping or decreasing your retirement matching to your employees. Although this may be a concern, the payroll loan above may offer a way for you to continue matching your employees while also having some of these loans forgiven.
  • You or your employees may qualify for taking new loan privileges or distribution privileges from their 401k. Contact your financial advisor or myself for more information.
  • An employer can pay up to $5,250 for an employee’s student loan as a retention strategy in these unique times.




Please be aware that these points are not all inclusive of the coronavirus bill. Business owners will still be eligible for other parts of the bill including the $1,200/ per person rebate (if their income qualifies), student loan deferment, charity donation deduction, etc. This information was designed specifically to give small business owners the information and tools to help them make good decisions during these times. Please contact your financial planner, accountant, and lender for specific information to your situation. This is general information and every business will have different advice based on their needs.



Patrick Portman is a CERTIFIED FINANCIAL PLANNER™ in Bardstown, KY that helps clients with retirement planning, investment management, business planning, estate planning, and other personal financial planning topics. If interested in seeing how his firm can help your situation, you can contact 502-331-8370 or email for a cost-free introductory 30 minute consultation.



Patrick Portman is a Registered Representative offering Securities and Advisory Services throughUNITED PLANNERS FINANCIAL SERVICES Member FINRA, SIPC

Portman Wealth Management and United Planners are not affiliated.