IVCA COVID-19 Updates

COVID-19 ALERT

April 3, 2020

 

IVCA is working to provide updates to our members on resources and government updates for companies suffering from the economic effects of COVID-19.

 

Today's Update:

PPP Loan Application is Available: Monies will be disbursed on a “first come, first served” basis. Download here. (4/3/2020)

You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating. All loans will have the same terms regardless of lender or borrower. A list of participating lenders as well as additional information and full terms can be found at www.sba.gov.

COVID-19 ECONOMIC INJURY DISASTER LOAN APPLICATION (EIDL) Can be found HERE  (4/3/2020)

The Chicago Small Business Resiliency Loan Fund is now open for applications ! This $100 million fund will provide low-interest grants to thousands of Chicago small businesses suffering due to COVID-19. (4/3/2020)

Due to the high expected demand, the number of Resiliency Fund loans will be limited. Applications will be reviewed on a rolling first-come, first-served basis. We therefore recommend applying as soon as possible.  Please visit chicagoresiliencyfund.com  to start your application and for more information about loan terms, business requirements, application information requirements and required attestations.  In the event the website is overwhelmed, we recommend checking back often to submit your application. 

The Resiliency Fund has a team of trusted experts at your service to guide you through the application, underwriting and closing phases of your loan. Questions can be submitted in  English  and  Spanish . Additionally, the City of Chicago has a network of  Neighborhood Business Development Centers  to provide free remote/virtual assistance to business owners interested in applying for the Chicago Small Business Resiliency Loan Fund.

The City is committed to leveraging every dollar available to business owners from any source in order to provide as much funding as possible to Chicago's small businesses. The Resiliency Fund is structured to complement the new federal  Paycheck Protection Program  that the Small Business Administration (SBA) has launched. The City and its partners will seek to provide all Resiliency Fund loan applicants with the best offer available, including from the SBA's new program. 

In the event that you/your business does not qualify for this program, please look at the  City’s resource website  to find other programs that may meet your needs. Additionally, please visit  www.chicago.gov/BACPCOVID19  for resources specific to businesses, consumers and employees.

 

Latest Updates:

Illinois Delegation Reps Krishnamoorthi, Schneider, Rush, and LaHood advocate for clarity on "Affiliation Rules”. Our sincere thanks to Rep. Raja Krishnamoorthi and his staff for leadership on this critical point. (4/2/2020)

“Without clear guidance enabling startups and other small businesses supported by equity investment to access the 7(a) loan facility, many of these companies will be rendered ineligible causing them to fail.”  Read their letter of support here.

Speaker Pelosi supports VC/PE backed companies’ access to PPP (4/2/2020)

Read her letter of support here.

NVCA request to Treasury on Affiliation Rules (4/1/2020)

"It is imperative startups and the banks who will service the loans understand that these small businesses will be eligible for PPP. We request that you update the application before businesses can apply and include in guidance clear rules that take into account the real-world role of minority investors. Rather than requiring them to make representations and certifications on actions they do not control, we request instead that minority investors be empowered to support SBA’s efforts for taxpayer protections by providing clear application of the affiliation rules that allows them to conduct appropriate oversight of the company, while avoiding requirements that these investors create criminal legal exposure for actions over which they have no control. Congress has created an incredibly powerful job retention program that, if effective, will save millions of jobs across America. Immediate clarity to the questions raised in this letter are critical to the ability of startups to preserve jobs through the economic crisis created by COVID- 19."

Read NVCA letter to The Honorable Steven Mnuchin, Secretary of the Treasury and The Honorable Jovita Carranza Administrator, U.S. Small Business Administration here.

UPDATE - Forgivable Loans:  SBA Paycheck Protection Program (PPP Loans) - (4/1/2020)

From Kutchins, Robbins & Diamond:  In our initial alert regarding the SBA Paycheck Protection Program (PPP Loans) on Monday of this week, we noted that guidance would be forthcoming from the SBA, the Treasury Department, and participating lending institutions. The SBA has released an information sheet for borrowers and a draft copy of the loan application, both of which can be found below. We expect banks to release their lists of required documentation shortly. Please carefully review the documents below and let us know if you have any questions.

From IL DCEO (4/1/2020):

  • Paycheck Protection Program – The U.S. Small Business Administration (SBA) will provide $349 billion in loans through the Paycheck Protection Program to small businesses and non-profits. Portions of these loans will be forgiven to the extent that recipients maintain their existing workforce or rehire. Loans can be up to $10 million and interest rates are maxed at 4% for portions of the loan that do not qualify for loan forgiveness. Learn more here.
  • Economic Injury Disaster Loan – The 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. Borrowers can request an emergency advance of $10,000 within 3 days of submitting the application and do not have to repay the advance if they are denied a loan. Learn more here.
  • Subsidy for Current Loan Payments – The SBA will cover up to 6 months of principal and interest payments that are owed on most existing SBA loans. Learn more here.
  • Training and Advising for Existing Businesses – Additional funds are provided to SBDCs, Women’s Business Centers, and Minority Business Centers for education, training and advising to small businesses. Small Businesses can take advantage of this now.
  • Aid to Midsize Businesses and Nonprofits – $454 billion will be available from the U.S. Treasury to provide financial assistance through loan programs established by the Federal Reserve. As part of that, a special fund is dedicated to midsize businesses and nonprofits with 500-10,000 employees to provide financing to banks and other lenders to make direct loans to these entities. The interest rate on those loans would be capped at 2%, with no payments due for the first six months. These loans cannot be forgiven.
  • Significant restrictions will be placed on the midsize business and nonprofit assistance, such as prohibiting paying out dividends while the loan is outstanding. More guidance will be forthcoming from the U.S. Treasury on additional criteria and funding access.  
As previously announced, there are additional small business grants and loans available including the Hospitality Emergency Grant (applications due April 1), Illinois Small Business Emergency Loan Fund and Downstate Small Business Stabilization Program . Learn more here

City Level Resources
To further provide relief for businesses over the coming weeks, the City of Chicago is also extending due dates for tax payments until April 30, 2020 for the following City taxes: (3/23/2020)
  • Bottled Water tax 
  • Checkout Bag tax 
  • Amusement tax 
  • Hotel Accommodation tax 
  • Restaurant tax 
  • Parking tax

County Level Resources

Cook County Tax Relief (3/23/2020)
The Cook County Department of Revenue is taking measures to support businesses in Cook County who are experiencing slowdowns or financial operational issues during this time of great uncertainty.  We are offering tax relief options by request. If any individual or business needs additional time to file and pay Home Rule Taxes, please email [email protected] and request and extension. 

State Level Resources

Durbin, Duckworth Outline Illinois Priorities Included In Senate-Passed Bipartisan COVID-19 Pandemic Relief Bill - (3/27/20)

Illinois Small Business Emergency Loan Fund - (3/25/2020)

DCEO and the Illinois Department of Financial and Professional Regulation (IDFPR) are establishing the Illinois Small Business Emergency Loan Fund to offer small businesses low interest loans of up to $50,000.

Businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 will be eligible to apply. Successful applicants will owe nothing for six months and will then begin making fixed payments at a below market interest rate for the remainder of a five-year loan term. Starting this Friday, March 27th, interested businesses will be able to express interest at a form that will be posted here.

Who is eligible?  Small businesses located outside of the City of Chicago with fewer than 50 workers and less than $3 million in revenue in 2019 can apply. Small businesses within the City of Chicago can apply to a similar loan program here.

.What can loan funds be used for?  Loans can be used to support working capital.

How do businesses apply?  Businesses will be able to complete an interest form on this web page on Friday, March 27, 2020.  The form is available at https://www2.illinois.gov/dceo/SmallBizAssistance/Pages/EmergencySBAIntiatives.aspx

How much money is available?  Businesses can receive up a low interest loan of up to $50,000 with a 5-year repayment period with no payments due for the first six months.

How soon will businesses receive funds?  Eligible businesses will be invited to submit a full application beginning on April 1. Once submitted, we will strive to make a loan decision within 10 days, and make funds available within two days of receiving bank information from a business.

Update from Office of the Governor:  Matching a move at the federal level, Gov. J.B. Pritzker delayed for three months, until July 15, the deadline for filing annual state income-tax returns.  Pritzker said any refunds that are owed still will go out on time. (3/25/2020)

Gov. Pritzker to File for Statewide Eligibility for Small Business Administration Loans – (3/17/2020)


Federal Level Resources

Our friends at NVCA organized a broad national letter asking for clarification to ensure that small businesses with equity investors are eligible for the small business loan facility created by the recently-passed CARES Act. Read Full text - (3/31/2020)

Paycheck Protection Program Frequently Asked Questions - (3/31/20)

Small Business Administration Illinois Office (3/23/2020)

Business owners can apply for a loan now at https://disasterloan.sba.gov/ela/ 

The Illinois Disaster Loan Declaration allows all Illinois small businesses (according to SBA’s size standards) and private non-profits with a substantial economic injury related to COVID-19 to apply for loans of up to $2M. These loans can go toward working capital to meet needs including payroll, accounts payable, and fixed debt payments until the situation improves. Interest rates are 3.75% for small businesses and 2.75% for non-profits. 
  
We expect small business owners and stakeholders will have some questions. The Illinois District Office is hosting twice daily webinars on the Economic Injury Disaster Loans starting Thursday, March 18. You can find details and register for these training events at  https://disasterloan.sba.gov/ela/ 

Add the SBA Illinois District < [email protected]> to your safe-senders list to make sure you’re getting the information. Follow them on Twitter @SBA_Illinois. 
The SBA also arranging one-on-one assistance via telephone (312-353-4528) and email ([email protected]). Phone hold times last between 30 minutes and an hour, he said. The agency also plans to counsel businesses about how to reapply if their applications are rejected.
Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount owed - (3/23/2020)
 
Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave (3/23/2020)
 

The IRS has established a special section focused on steps to help taxpayers, businesses and others affected by the coronavirus. This page will be updated as new information is available. For other information about the COVID-19 virus, people should visit the Centers for Disease Control and Prevention (CDC) (https://www.coronavirus.gov) for health information. Other information about actions being taken by the U.S. government is available at  https://www.usa.gov/coronavirus and in Spanish at  https://gobierno.usa.gov/coronavirus. The Department of Treasury also has information available at  Coronavirus: Resources, Updates, and What You Should Know. (3/23/2020)

News Releases

  • IR-2020-58, Tax Day now July 15: Treasury, IRS extend filing deadline and federal tax payments regardless of amount (3/23/2020)
  • IR-2020-57, Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave (3/23/2020)
  • Treasury News Release: Treasury and IRS Issue Guidance on Deferring Tax Payments Due to COVID-19 Outbreak (3/23/2020)
  • IR-2020-54, IRS: High-deductible health plans can cover coronavirus costs (3/23/2020)
Statements 
Guidance
  • Notice 2020-18 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic (3/23/2020)
  • Notice 2020-17 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic (3/23/2020)
  • Notice 2020-15 (PDF), High deductible health plans and expenses related to COVID-19 (3/23/2020)

Guidance for Banks:

Guidance for Banks from Office of the Comptroller of the Currency (3/24/2020)

For Lending Institutions – IL State Treasurer (3/23/2020)  Business Invest - Illinois Small Business COVID-19 Relief Program (“Program”). The program is an impact investment loan program under which the Illinois State Treasurer would make up to $250 million in deposits available to financial institutions throughout the state, at near-zero rates, to assist Illinois small business and non-profits negatively affected by the COVID-19 pandemic.  The purpose of this funding is to provide vital economic support to small businesses and non-profits throughout Illinois to help overcome the loss of revenue they are experiencing.  
  
Through this program, the Treasurer's Office would partner with approved financial institutions to provide loans -- either lower rate loans, or loans to a business or non-profit that would not otherwise qualify -- to Illinois small businesses impacted by the COVID-19 pandemic.
https://illinoistreasurer.gov/Invest_in_Illinois/Small_Business_COVID-19_Relief_Program

IVCA correspondence from March 14, 2020


Illinois Venture Capital Association | 312/241-1618