What financial resources are available to help people, businesses through COVID-19 pandemic?

photo by: Associated Press

Kansas Commerce Secretary David Toland discusses the details of a new loan program as Labor Secretary Delia Garcia, right, watches during a news conference, Friday, March 20, 2020, at the Statehouse in Topeka, Kan. The new program will make $5 million in no-interest, short-term loans to bars, restaurants, taverns and motels struggling to meet their operating expenses because of steps taken by state and local officials to control the spread of the new coronavirus. (AP Photo/John Hanna)

As the United States begins to grapple with an unprecedented impact to the country’s economy amid the COVID-19 crisis, financial resources for individuals and businesses are beginning to come online.

Congress has passed three economic stimulus packages — the most recent totaling $2.2 trillion — allocating resources to mitigate some of the losses the economy has already suffered.

Here are some of the state and federal resources available to Kansas residents and business owners:

Kansas jobs

In the last two weeks, nearly 80,000 Kansans have filed new claims for unemployment benefits, Department of Labor Secretary Delía García announced Thursday.

In response, the state Department of Commerce has begun aggregating new job postings for essential services across the Sunflower State that need workers during the pandemic.

Job listings can be found on the department website at kansascommerce.gov/covid-19-response/covid-19-jobs-and-hiring-portal.

HIRE emergency fund

In March, Gov. Laura Kelly announced the state would allocate $5 million toward an emergency fund dedicated to assisting Kansas’ hospitality industry, which will almost assuredly be hit the hardest by the need for extended periods of social distancing.

All $5 million was allocated just 48 hours after Kelly announced the fund, and 36 businesses in Douglas County were approved for the bridge loan program, a Department of Commerce spokesperson told the Journal-World Friday.

Though all the money is currently doled out, when Kelly and Commerce Secretary David Toland announced the fund’s creation, they said more could potentially be added.

Paycheck Protection Program

Created as part of federal stimulus efforts, the Paycheck Protection Program provides small businesses with under 500 employees funding to pay up to 8 weeks of payroll costs, including benefits, and is administered through the Small Business Administration. The money received can also be used to pay interest on mortgages, rent, and utilities.

Enrollment in the program began Friday, and eligible businesses are encouraged to apply quickly, as the $349 billion pot is expected to be entirely used up in the coming days and weeks.

To be eligible to receive money and have the loan be fully forgiven, the money must be used for payroll costs, interest on mortgages, rent and utilities. Due to the likelihood of high enrollment in the program, federal officials are recommending businesses use at least 75% of the forgiven amount on payroll.

Forgiveness is based on employers maintaining or quickly rehiring employees and maintaining salary levels, which could disqualify some businesses that have already closed their doors in light of stay-at-home orders.

Furthermore, any loan forgiveness will be reduced if a business’ full-time staff declines, or if salaries and wages decrease, according to federal guidance on the program.

Starting April 10, 2020, independent contractors and self-employed individuals can apply for relief.

Applications can be filled out through any lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System that is participating in the program.

Businesses are encouraged to contact their existing banker to find out if the bank is participating in the new program. Other resources in Douglas County for SBA information include: the KU Small Business Development Center, 718 New Hampshire St., and Wakarusa Valley Development Inc., 4321 W. Sixth St., suite B.

Economic Injury Disaster Loan Emergency Advance

Also created through the federal stimulus packages and administered through the SBA, the Economic Injury Disaster Loan Emergency Advance is available for any small business with less than 500 employees.

The program provides for an advance of up to $10,000 to provide economic relief to businesses experiencing a temporary loss of revenue. Funds will be made available following a successful application. This loan advance will not have to be repaid, according to the SBA website.

Applications can be filled out at covid19relief.sba.gov

In a recent memo to area business owners, Will Katz, director of the KU Small Business Development Center, touted the Economic Disaster Loan program. He said it can be used for much more than just the $10,000 advance. It can loan up to $2 million in funds, and both for-profit and nonprofit businesses/organizations can apply. In the past, loan limits often have been based off of a business’ gross profit, meaning total revenues minus the costs of goods and services. Typically, the SBA has provided loans equal to half of a business’ annual gross profit.

Importantly, this SBA loan can be used for items other than just making payroll. It also can be used to make payments on other loans or other expenses needed to keep a business open. Also importantly, the SBA is the actual lender of the money, rather than a bank. Typically, interest rates have been less than 4% for for-profit businesses and less than 3% for nonprofits. Loan terms generally are for 30 years.

Unlike the Paycheck Protection Plan, this program has been in place for a couple of decades with the SBA, which may cut down on some confusion. Nationally, there are multiple reports of banks being slow to lend money through the Paycheck Protection Program because they are still waiting to receive specific guidance from the federal government.

More coverage: Coronavirus (COVID-19)

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