/ COVID-19 Resources for Pearland Businesses

COVID-19 Resources for Pearland Businesses

The City and the City’s Economic Development Corporation (PEDC) understand the impact COVID-19 is having on our local employers and our community’s economy. We are committed to facilitating communications and support from state and local resources during this time. 

As additional federal and state government resources become available in the future, we will periodically update this information. Please contact us if you have any questions. 

Below are some local resources that can provide assistance during this disruption.

Small Business Administration Programs

Tax Provisions for Businesses

Unemployment Benefits

Texas Workforce Commission – Shared Work Program

CDC: Interim Guidance for Businesses and Employers

Houston Work Safe Program

Local Public Health Resources

 

SMALL BUSINESS ADMINISTRATION (SBA)

There are multiple programs from the Small Business Administration to assist businesses impacted by COVID-19.

I.  SBA ECONOMIC INJURY DISASTER LOAN (EIDL) AND EMERGENCY ECONOMIC INJURY GRANTS

Background

The U.S. Small Business Administration (SBA) is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as the result of COVID-19 through December 31, 2021. The SBA’s Economic Injury Disaster Loan (EIDL) program provides small businesses with working capital loans of up to $2 million that can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing. SBA offers the loan with long-term repayments in order to keep payments affordable, up to a maximum of 30 years.

These working capital loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The interest rate is 3.75% for small businesses with a maximum 30 year term. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.

There is no cost to apply with funds coming directly from the US Treasury and not your bank. SBA will calculate the businesses’ ability to fund itself for the next six months and if it cannot, it is eligible for a loan. There is no required personal guarantee for loans up to $200,000. Collateral is required on EIDLs over $25,000, but a loan will not be declined for a lack of collateral, however will require the borrower to pledge what is available. Payments start the 12th month after the date of the note. There is no obligation to take the loan or draw down entire amount offered.

Application and Additional Information

Applications are handled online through the SBA. To apply online, click here.

For Frequently Asked Questions about COVID-19 EIDL loans, click here.

Additional and up-to-date information can be found on the COVID-19: Small Business Guidance and Loan Resources page on the SBA’s website and Application.

II. SBA PAYCHECK PROTECTION PROGRAM

Background

The Paycheck Protection Program (PPP), as part of the 2021 Coronavirus Response and Relief Supplemental Appropriations Act, provides funding for small businesses payroll, benefits and some operating costs. The program is open through May 31, 2021 or until the $284 billion in authorized funding is exhausted. Applications are currently being accepted for both for new borrowers (First Draw) and existing borrowers (Second Draw).

This SBA program is offered by local banks, credit unions and other SBA certified lenders. Please check with your local lender to see if they are participating in the program and if funding is available.

Highlights

Some of the new program highlights include:

    • Borrowers can set their PPP loan’s covered period to be any length between 8 and 24 weeks to best meet their business needs;
    • Expanded list of expenses qualifying for forgiveness including operations expenditures, property damage costs, supplier costs, and worker protection expenditures;
    • The PPP provides greater flexibility for seasonal employees;
    • Certain existing PPP borrowers can request to modify their First Draw PPP Loan amount;
    • Certain existing PPP borrowers are now eligible to apply for a Second Draw PPP Loan;
    • Simplified loan forgiveness process for loans under $150,000;
    • If you received an EIDL grant, your PPP loan forgiveness will no longer be reduced by the amount of the grant; and
    • Regular business expenses paid for with PPP loan proceeds shall be deductible for tax purposes for past and future loans that overturns a previous IRS ruling.

Second Draw Loan

A borrower is generally eligible for a Second Draw PPP Loan if the borrower:

    • Previously received a First Draw PPP Loan and will or has used the full amount only for authorized uses;
    • Has no more than 300 employees; and
    • Can demonstrate at least a 25% reduction in gross receipts between comparable quarters in 2019 and 2020.

Additional Information

Businesses should reach out to their local bank, credit union or SBA certified lender for information on applying. More detailed information can be found at the following links related to the Paycheck Protection Program:

New Borrowers – First Draw Summary

New Borrowers Application (Form 2483)

Existing PPP Borrowers – Second Draw Summary

Existing PPP Borrowers Second Draw Application (Form 2483-SD)

Additional information can be found on the Paycheck Protection Program page on the SBA’s website. Also, the U.S. Chamber of Commerce has issued a guide to help small businesses and self-employed individuals prepare to file for a loan. 

III. SBA SMALL BUSINESS DEBT RELIEF

The CARES Act provided the SBA funding to pay all principal, interest and fees for six months on all core existing non-disaster SBA loan products, including 7(a), Community Advantage, 504 and microloan programs. The program debt relief has been resumed for an additional three months starting in February 2021 with payments of principal and interest capped at $9,000 per borrower per month. Borrowers in the hardest hit sectors by the pandemic, including food service and accommodation: arts, entertainment and recreations; education; and laundry and personal care services will receive an additional five months of relief after the additional three months.

SBA will also make payments of principal and interest on newly approved loans between February 1 and September 30, 2021, also capped at $9,000 per month.

Please contact your lender to see if your existing loan qualifies.

IV. SBA EXPRESS BRIDGE LOANS

The Express Bridge Loan Pilot Program allows small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly. These loans can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing and can be a term loans or used to bridge the gap while applying for a direct SBA Economic Injury Disaster loan. If a small business has an urgent need for cash while waiting for decision and disbursement on an Economic Injury Disaster Loan, they may qualify for an SBA Express Disaster Bridge Loan.
Terms

    • Up to $25,000
    • Fast turnaround
    • Will be repaid in full or in part by proceeds from the EIDL loan

V. RESTAURANT REVITALIZATION FUND

The federal government approved the Restaurant Revitalization Fund (RRF) as part of the 2021 American Rescue Plan Act (ARPA) for small businesses. Businesses that lost revenue in 2020 versus 2019 will be eligible to apply for grants. The ARPA explicitly names the following types of establishments that should be eligible: “restaurant, food stand, food truck, food cart, caterer, saloon, inn, tavern, bar, lounge, brewpub, tasting room, taproom, licensed facility or premise of a beverage alcohol producer where the public may taste, sample, or purchase products.”

Generally speaking, restaurants can apply for grants that are equal to 2020 gross revenue minus 2019 gross revenue.  Grant funds can be used for payroll costs, payments of principal or interest on any mortgage obligation, rent payments, including rent under a lease agreement, utilities maintenance, including new outdoor seating construction, supplies, including PPE and cleaning material, food and beverage inventory, covered supplier costs, operational expenses, paid sick leave, any other expense SBA says is essential to maintain operations.

The Small Business Administration (SBA) will administer and disperse the RRF grants, but the program does not yet have an official launch date as of right now. Those interested in obtaining RRF grants should keep a close eye on the SBA’s COVID-19 relief options web portal at: https://www.sba.gov/page/covid-19-guidance-resources

The National Restaurant Association has put together a policy brief with additional information on the Restaurant Revitalization Fund. Click here to view the brief.

 

TAX PROVISIONS FOR BUSINESSES

The Employee Retention Tax Credit and other tax provisions are available to assist business with cash flow and liquidity to encourage businesses to keep employees on the payroll during the COVID-19 crisis. We encourage you to reach out to your accountant/tax preparer to see which provisions can benefit your business.

 

UNEMPLOYMENT BENEFITS

Employees working reduced hours or that have been laid off/furloughed because of COVID-19 will be eligible for unemployment.

Additional information for employers from the Texas Workforce Commission for employers and filing for unemployment.

 

TEXAS WORKFORCE COMMISSION – SHARED WORK PROGRAM

The Texas Workforce Commission (TWC) encourages employers to enroll in Shared Work program as an alternative to layoffs. The voluntary Shared Work program was developed to help Texas employers and employees withstand a slowdown in business such as the impact of COVID-19. For more information on the Shared Work Program or to apply for the program, click here.

TWC resources for employers can be found here.

 

CDC: INTERIM GUIDANCE FOR BUSINESSES AND EMPLOYERS

The Centers for Disease Control and Prevention has released guidance to assist businesses and employers plan, prepare and respond to Coronavirus Disease. The CDC will update this interim guidance as needed and as additional information becomes available. 

 

HOUSTON WORK SAFE PROGRAM

Greater Houston Partnership has released tools and guidance to assist employers as the Houston region moves to reopen our economy. Learn more.

 

LOCAL PUBLIC HEALTH RESOURCES

Pearland continues to work with local, regional and state partners to monitor and prepare for Coronavirus.  We encourage you to visit the local County Public Health information pages for the most recent local information.

We also encourage you to visit the COVID-19 page on the City of Pearland’s website.