Help is on the way

If you need financial help right now, here it is:

Federal SBA disaster relief loans: https://www.sba.gov

1. This should be considered a "last resort". This loan is meant for small businesses without other forms of loans, lines of credit or personal assets that could be contributed to the business.

2. Apply online, in person at a disaster center, or by mail.

3. Loans are expedited and payments can start in 1 to 3 weeks.

4. Deadline to apply: 12/21/2020.

5. Interest rates are: 3.75% for eligible businesses and 2.75% for eligible nonprofits.

6. Loan maximum is $2,000,000.

Employer Provided Tax-Free Qualified Disaster Payments to Employees: https://www.irs.gov

1. Now that Covid-19 has been designated a disaster under the Stafford Act, Internal Revenue Code Section 139 ("IRC 139") can allow certain payments made by employers to employees to be tax-free to the employee while remaining fully deductible for the employer.

2. Generally state treatment will mirror the federal treatment, but confirmation will be needed on a state-by-state basis.

3. Wage replacement such as paid leave or sick pay is not covered by IRC 139. These payments are still subject to income and payroll tax withholding.

4. Payments must be for expenses that are reasonable and necessary.

5. When applying the provisions of IRC 139 to Covid-19 related payments, employers may look to consider the following examples of tax-free qualified disaster payments:

a. Medical expenses.

b. Health-related expenses that are not medical expenses, such as over-the-counter medications, hand sanitizers.

c. Child care and tutoring expenses due to school closings.

d. Work-from-home expenses such as required technology equipment & increased utility costs.

e. Critical care and funeral expenses.

6. While guidance to date does not require employers to establish a written IRC 139 program, it may be favorable for employers to have a written program in place that outlines details related to the payment given by the employer to the employee.

7. We expect more guidance to be given as to the applicability of IRC 139 to Covid-19.

Mortgage Relief: https://www.hud.gov

1. HUD authorizes Federal Housing Administration to implement an immediate foreclosure & eviction moratorium for single family homeowners with FHA-insured mortgage for the next 60 days.

2. HUD recommends you contact your Mortgage Service Provider to work through your personal situation.

Federal Student Loan Aid: https://studentaid.gov

1. A freeze has issued on interest for Federal student loans for at least 60 days starting March 13th. This includes Direct Loans, Federal Perkins Loans and Federal Family Education Loan Programs held by the US Department of Education.

2. Contact your loan servicer online or by phone to determine if your loans are eligible. Your servicer is the entity to which you make your monthly payment. If you do not know who your servicer is or how to contact them, visit StudentAid.gov/login or call us at 1-800-4-FED-AID (1-800-433-3243; TTY for the deaf or hearing-impaired 1-800-730-8913) for assistance.

3. Loan Forbearance is available:

a. Going into forbearance (payment suspension) during this time will allow you to pause your student federal loan payments but not accrue any interest or penalties

b. To request forbearance, borrowers must contact their loan servicer online or by phone. If you do not know who your loan servicer is, go to https://studentaid.gov/manage-loans/repayment/servicers#your-servicer

c. In the event borrowers cannot get through to their lender, the department has authorized an automatic suspension of payments for any borrower more than 31 days delinquent.

4. If borrowers choose to continue to make payments, 100% of their payment will be applied to the principal amount of their student loan.

5. The 60-day student loan forgiveness does not apply to private student loan lenders. However, some private lenders will temporarily modify and reduce monthly payments based on financial hardship. In addition, a temporary reduction may lead to higher payments when the temporary modification ends. To find out your options regarding a private lender, please contact them directly.

6. For more information, go to https://studentaid.gov/announcements-events/coronavirus#borrower-questions