Questions for Small Businesses

For businesses and employers seeking guidance on paid sick leave and family and medical leave in the Families First Coronavirus Response Act (FFCRA) on the following questions:  

  • How does an employer count its number of employees to determine coverage?
  • How can small businesses obtain an exemption?
  • How does an employer count hours for part-time employees?
  • How does an employer calculate wages employees are entitled to under the FFCRA? 

See the links below from the the U.S. Department of Labor’s Wage and Hour Division: 

To learn more about how to apply for the Paycheck Protection Program (PPP), which will provide 100% federally guaranteed and forgivable loans (grants) to small businesses who retain their employees or restore employees who were fired after February 15, click HERE.  

To learn more about what is made available for small businesses in the Coronavirus Economic Recovery Package, click HERE.   

The U.S. Department of Labor put together a comprehesive list of questions and answers for employers about guidance on what your small business is eligible for, rules for sick leave, employee guidlines and much more. To see the full list, click HERE.  

Frequently Asked Questions   

*New as of 05/08* I am run a restaurant/food retail establishemnts, what guidlines should I follow now that we are reopened? 

  • The FDA issued two documents to help guide Montana retail food establishments with guidlines to reopening. 
  • To see the two documents and for further guidance, click HERE.

*New as of 4/29* How do I calculate the pay period for employees who are seasonal for the PPP loan?

  • Daines helped secured a new guideline under the PPP to allow seasonal employers to incorporate their peak months when calculating their maximum allowable loan size.
  • Previously, seasonal employers calculated their loan size by using their average monthly payroll from 3/1/2019 - 6/30/2019. Now, they can use any consecutive 12 week period from 5/1/19 - 9/15/2019.

*New as of 4/22* When will PPP and Economic Injury Disaster Loans (EIDL) begin accepting applications again? 

  • The Senate unanimously approved $370 billion in additional funding for PPP and EIDL yesterday ($310b for PPP and $60b for EIDL). It is expected that the House will pass this legislation very soon. Once the President signs this legislation into law, both programs will be able to resume accepting applications and disbursing loans.

What types of businesses and entities are eligible for a Paycheck Protection Program loan?

  • Businesses and entities must have been in operation on February 15, 2020.
  • Small businesses and (501(c)(3) and 501(c)(19) non-profits with fewer than 500 employees (includes full-time, part-time, or any other status), or fewer than 500 employees per physical location for franchisees, hospitality, and restaurant businesses, or the applicable size standard in number of employees for the North American Industry Classification System (NAICS) industry as provided by SBA, if higher.
  • Sole proprietorships, independent contractors, gig workers, and self-employed individuals are all eligible.

*New as of 04/29/2020* Where should I go to get a PPP loan?

  • You can apply with any lending institution that is a current 7(a) lender. You should start by contacting the local financial institution you already use to see if they are participating. The Department of Treasury has approved additional bank and non-bank lenders to participate in the program.  
  • Over 5,000 lenders are participating in the program. To find the nearest lender to you, click HERE.

*New as of 04/29/2020* What is the maximum amount I can borrow?

  • Any small business is eligible to borrow 250 percent of their average monthly payroll expenses, up to a total of $10 million. This amount is intended to cover 8 weeks of payroll expenses and any additional amounts for making payments towards debt obligations. This 8-week period may be applied to any time frame between February 15, 2020 and June 30, 2020.
  • Seasonal business expenses will be measured any consecutive 12-week period from May 1st, 2019 through September 15th, 2019.

How can I use the money such that the loan will be forgiven?

  • The amount of principal that may be forgiven is equal to the sum of expenses for payroll, and existing interest payments on mortgages, rent payments, leases, and utility service agreements. Payroll costs include employee salaries (up to an annual rate of pay of $100,000), hourly wages and cash tips, paid sick or medical leave, and group health insurance premiums.
  • If you would like to use the Paycheck Protection Program for other business-related expenses, like inventory, you can, but that portion of the loan will not be forgiven.

What if I already fired my employees?

  • Reductions in employment or wages that occur during the period beginning on February 15, 2020 and ending April 26, 2020 (30 days after date of enactment) shall not reduce the amount of loan forgiveness if by June 30, 2020, the borrower eliminates the reduction in employees or reduction in wages.

When is the loan forgiven?

  • The loan is forgiven at the end of the 8-week period after you take out the loan. Borrowers will work with lenders to verify covered expenses and the proper amount of forgiveness.

What costs are eligible for payroll?

  • Compensation (salary, wage commission, or similar compensation, payment of cash tip or equivalent)
  • Payment for vacation, parental, family, medical, or sick leave
  • Allowance for dismissal or separation
  • Payment required for the provisions of group health care benefits, including insurance premiums
  • Payment of any retirement benefit.
  • Payment of state or local tax assessed on the compensation of employees.  

I’m an employer taking advantage of the 2020 Social Security payroll tax deferral under the CARES Act, but also applied for a PPP Loan. Can I do both?  

  • Yes. According to the IRS, a business that started deferring 2020 payroll tax prior to receiving a PPP loan can continue to do so until the date on which the lender makes a decision on loan forgiveness.
  • Once an employer receives a decision from their lender that the PPP loan is forgiven, the business can no longer defer payroll taxes, and must begin paying on schedule.
  • However, the payroll taxes deferred from March 27 until the date on which the PPP loan is forgiven can be paid at the end of 2021 and 2022 (50% by the end of each year).  

*New as of 04/29/2020* Are taverns eligible for PPP loans? 

  • Yes, all Montana taverns are eligible for the PPP. 

 I am a partner in a partnership. Am I eligible for PPP? 

  • If you are a partner in a partnership, you may not submit separate PPP loan app for yourself as self-employed.
  • Self-employed income of general active partners can be reported as payroll costs (up to $100K/year) on the PPP loan application by the partnership.
  • Partnerships, and LLCs filing taxes as partnerships, are limited to 1 PPP loan for the aggregate of the partnership and individual partners.

Do businesses owned by large companies with adequate sources of liquidity to support the business’s ongoing operations qualify for a PPP loan?   

  • In addition to reviewing applicable affiliation rules to determine eligibility, all borrowers must assess their economic need for a PPP loan under the standard established by the CARES Act and the PPP regulations at the time of the loan application. 
  • Although the CARES Act suspends the ordinary requirement that borrowers must be unable to obtain credit elsewhere (as defined in section 3(h) of the Small Business Act), borrowers still must certify in good faith that their PPP loan request is necessary. 
  • Specifically, before submitting a PPP application, all borrowers should review carefully the required certification that “[c]urrent economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant.” 
  •  Borrowers must make this certification in good faith, taking into account their current business activity and their ability to access other sources of liquidity sufficient to support their ongoing operations in a manner that is not significantly detrimental to the business. 
  • For example, it is unlikely that a public company with substantial market value and access to capital markets will be able to make the required certification in good faith, and such a company should be prepared to demonstrate to SBA, upon request, the basis for its certification. 
  • Lenders may rely on a borrower’s certification regarding the necessity of the loan request. Any borrower that applied for a PPP loan prior to the issuance of this guidance and repays the loan in full by May 7, 2020 will be deemed by SBA to have made the required certification in good faith.