Updates to federal loan assistance to horsemen
Horsemen: The Kentucky and National HBPA want you to be aware of federal assistance for which you may qualify during the coronavirus health and economic crisis. It’s a constantly changing landscape as the federal government makes updates. The initial applications are fairly simple to fill out, though more information may be required.
Here’s what we know now:
Updated application for PPP forgivable loan
The U.S. Treasury has issued an updated application that you should use in applying for a zero-free, potentially 100-percent forgivable Payroll Protection Program loan designed to cover two months of payroll and other expenses if you keep your workers on the payroll at regular pay rate.
Click here for the new application
Please know that even though the new application seems to suggest you can include as payroll workers who receive 1099 tax form, that is not the case. Those receiving a 1099 tax form are regarded as independent contractors. They are eligible to apply on their own, but you cannot count them on your payroll, only those receiving a W-2.
Apply now before funding runs out!
There were more than 3 million applications on the first three days, so you can expect potentially lengthy delays. That makes it even more urgent to apply ASAP to get in the pipeline before the funding runs out. Apply through your bank or credit union.
Who’s eligible:
Many, if not most trainers, will qualify for the zero-fee, 100-percent forgivable loans offered to encourage small-business owners to keep their employees on the payroll at their regular pay rate. Your training operation should qualify as a small business, defined as 500 or fewer employees. Self-employed individuals, sole proprietorships and independent contractors also are eligible.
The $350 billion Paycheck Protection Program will provide zero-fee loans that can be up to 2 1/2 times your average monthly payroll costs, capped at what computes to $100,000 per an employee’s annual pay. The loans are designed to cover up to eight weeks of average payroll and specified other costs such as mortgage or rent. The loan will be forgiven if you retain your employees at their regular pay rate. The program is retroactive to Feb. 15, 2020. So you can still be eligible if you’ve laid off employees but you must bring them back or replacement employees if you plan to count their salaries. To emphasize: Your employee head count that must be the same, even if some of the employees change.
The application process has already started – get in now!
Many banks and credit unions are participating. The deadline is June 30, 2020. Because of anticipated high demand, it’s urgent that you apply early before the funding runs out.
Contact your bank or credit union as additional information may be needed. If you’ve already filed with the prior application, check with your bank to see if you need to fill out the new application.
Here again is the link to the new application: https://bit.ly/
NEXT STEPS:
a. Have a plan specifying how you’re going to use these funds for their allowed purposes;
b. Document use of funds in preparation of loan forgiveness application;
c. Keep all documentation used to support your application (in event of audit).
The interest is 0.50% fixed rate, due in two years, with no collateral required. To request loan forgiveness with your lender, you must include documents to verify the number of employees and pay rates, as well as the payments on eligible mortgage, lease and utility obligations.
Forgiveness will be reduced if the headcount declines or if salaries or wages for employees decrease.
Visit SBA.gov/Coronavirus for more information on the Paycheck Protection Program and the EIDL program detailed below:
Another option: Economic Injury Disaster Loan advance
Trainers (and owners) can also apply for an Economic Injury Disaster Loan (EIDL) and receive an emergency advance of up to $10,000. Our understanding is that the advance up to $10,000 will not have to be repaid. You apply online directly to the Small Business Administration for these loans.
Click here to apply online for an EIDL loan
The EIDL program provides small businesses, including trainers, with working capital loans of up to $2 million to help overcome the temporary loss of revenue you may be experiencing. If the loan is approved for smaller than $200,000, no personal guarantees or fees are required and can be paid back over 30 years at a 3.75-percent interest rate.
This option might be a better fit for trainers who use independent contractors (such as freelance exercise riders) and issue them 1099s.
After you apply online, you’ll be assigned a case/reference number, and then it could be several weeks to hear more because of the overwhelming number of applications.
Trainers can apply for both a PPP loan and an EIDL loan.
Ask your financial adviser if you’re also eligible for employer tax credits or employer tax deferrals.
Have questions or need help filling out an application?
Contact the Kentucky HBPA by calling the main office at 502-363-1077 or emailing kentuckyhbpa@gmail.
