Business Resources Relating to COVID-19

The Halifax County Economic Development Commission (HCEDC) partners with regional, state and national organizations to provide support to businesses and our economic development efforts. These partners are critical to our community, especially in these uncertain times. This information is provided as an overview of resources available to businesses as we cope with the effects of the COVID-19. Details will be updated regularly as new information is provided.  Please do not hesitate to contact the HCEDC office by calling 252-519-2630 or by email to cathyscott@halifaxdevelopment.com

On December 27th, The Consolidated Appropriations Act, 2021 became law and added $300 to extended weekly unemployment benefits, and provides more than $300 billion in aid for small businesses. It also ensures tax deductibility for business expenses paid with forgiven Paycheck Protection Program (PPP) loans, provides fresh PPP funding, and offers businesses facing severe revenue reductions the opportunity to apply for a second loan. As program information and eligibility criteria become available, you can find it here.

Employee Retention Tax Credit (ERTC)

As of January 31, 2021, recent legislative modifications have expanded the Employee Retention Tax Credit beginning on January 1, 2021. The prior credit was 50% on $10,000 in qualified wages for the entire year (maximum of $5,000 per employee). The new credit is now 70% on $10,000 in wages per quarter (maximum of $14,000 per employee through June 30th).  The credit expires on June 30, 2021.

Eligible employers has also been expanded.  Prior to modifications, the ERTC applied only to an employer experiencing a decline in gross receipts of more than 50% in a quarter in comparison to the same quarter in 2019. Eligibility is now expanded to include employers who experienced a decline of more than 20%. 

The employee cap has been raised to 500 employees from 100 employees. Employers with 500 or less employees can claim the credit for wages paid to employees whether or not the employee is providing services.   Employers can also receive both the Employee Retention Tax Credit and a PPP loan, but not to cover the same payroll expenses. 

This is a refundable tax credit. Please refer to the IRS guidelines at this link:  https://www.irs.gov/newsroom/faqs-employee-retention-credit-under-the-cares-act . Please note that these FAQs DO NOT reflect the recent legislative changes, but please continue to check this link regularly for updates as they are posted.

Economic Injury Disaster Loan (EIDL) & Targeted EIDL Advance

SBA is currently accepting new Economic Injury Disaster Loan (EIDL) applications from all qualified small businesses, including agricultural businesses, and private nonprofit organizations. 

Additionally, the COVID-19 Targeted EIDL Advance was signed into law as part of the Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act. The Targeted EIDL Advance provides businesses located in low-income communities with additional funds to ensure small business continuity, adaptation, and resiliency. Advance funds of up to $10,000 will be available to applicants located in low-income communities who previously received an EIDL Advance for less than $10,000, or those who applied but did not receive funds due to lack of available program funding.

SBA will reach out directly to qualifying businesses. Applicants do not need to take any action at this time.  Detailed information about both of these programs can be found at this link:  https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/covid-19-economic-injury-disaster-loans#section-header-3

Shuttered Venue Operators (SV0) Grant

$15 billion in grants are available to shuttered venues through a new program administered by the Small Business Administration’s Office of Disaster Assistance.

Eligible applicants may qualify for SVO Grants equal to 45% of their gross earned revenue, with the maximum amount available for a single grant award of $10 million. $2 billion is reserved for eligible applications with up to 50 full-time employees.

Eligible entities include: Live venue operators or promoters; Theatrical producers; Live performing arts organization operators; Relevant museum operators, zoos and aquariums who meet specific criteria; Motion picture theater operators; Talent representatives; and each business entity owned by an eligible entity that also meets the eligibility requirements

Other requirements:

  • Must have been in operation as of Feb. 29, 2020
  • Venue or promoter must not have received a PPP loan on or after Dec. 27, 2020

Full eligibility and application information can be found at this link: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/shuttered-venue-operators-grant

Payroll Protection Program (PPP)

The new round of PPP, or PPP2 as some are calling it, contains many similarities to the first round of the PPP but also has several important differences. The following is a high-level view of the PPP provisions.

Eligibility – PPP2 loans will be available to first-time qualified borrowers and, for the first time, to businesses that previously received a PPP loan. Specifically, previous PPP recipients may apply for another loan of up to $2 million, provided they:

  • Have 300 or fewer employees.
  • Have used or will use the full amount of their first PPP loan.
  • Can show a 25% gross revenue decline in any 2020 quarter compared with the same quarter in 2019.

PPP2 also makes the forgivable loans available to Sec. 501(c)(6) business leagues, such as chambers of commerce, visitors’ bureaus, etc., and “destination marketing organizations” (as defined in the act), provided they have 300 or fewer employees and do not receive more than 15% of receipts from lobbying. The lobbying activities must comprise no more than 15% of the organization’s total activities and have cost no more than $1 million during the most recent tax year that ended prior to Feb. 15, 2020.  

PPP2 will also permit first-time borrowers from the following groups:

  • Businesses with 500 or fewer employees that are eligible for other SBA 7(a) loans.
  • Sole proprietors, independent contractors, and eligible self-employed individuals.
  • Not-for-profits, including churches.
  • Accommodation and food services operations (those with North American Industry Classification System (NAICS) codes starting with 72) with fewer than 300 employees per physical location.

The bill allows borrowers that returned all or part of a previous PPP loan to reapply for the maximum amount available to them.

LOAN TERMS – As with PPP1, the costs eligible for loan forgiveness in PPP2 include payroll, rent, covered mortgage interest, and utilities. PPP2 also makes the following potentially forgivable: 

  • Covered worker protection and facility modification expenditures, including personal protective equipment, to comply with COVID-19 federal health and safety guidelines.
  • Expenditures to suppliers that are essential at the time of purchase to the recipient’s current operations.
  • Covered operating costs such as software and cloud computing services and accounting needs.

To be eligible for full loan forgiveness, PPP borrowers will have to spend no less than 60% of the funds on payroll over a covered period of either eight or 24 weeks — the same parameters PPP1 had when it stopped accepting applications in August.

PPP borrowers may receive a loan amount of up to 2.5 times their average monthly payroll costs in the year prior to the loan or the calendar year, the same as with PPP1, but the maximum loan amount has been cut from $10 million in the first round to the previously mentioned $2 million maximum. PPP borrowers with NAICS codes starting with 72 (hotels and restaurants) can get up to 3.5 times their average monthly payroll costs, again subject to a $2 million maximum.

The new COVID-19 relief bill also creates a simplified forgiveness application process for loans of $150,000 or less. Specifically, a borrower shall receive forgiveness if a borrower signs and submits to the lender a certification that is not more than one page in length, includes a description of the number of employees the borrower was able to retain because of the loan, the estimated total amount of the loan spent on payroll costs, and the total loan amount. The SBA must create the simplified application form within 24 days of the bill’s enactment and may not require additional materials unless necessary to substantiate revenue loss requirements or satisfy relevant statutory or regulatory requirements. Borrowers are required to retain relevant records related to employment for four years and other records for three years, as the SBA may review and audit these loans to check for fraud.

Repeals the requirement that PPP borrowers deduct the amount of any EIDL advance from their PPP forgiveness amount.

Includes set-asides to support first- and second-time PPP borrowers with 10 or fewer employees, first-time PPP borrowers that have recently been made eligible, and for loans made by community lenders.

Tax Deductibility – The bill also specifies that business expenses paid with forgiven PPP loans are tax-deductible.

NOTE: Information regarding COVID-19 resources has been obtained from a variety of sources including: Journal of Accountancy, National Law Review and other sources.

OTHER RESOURCES

Business Link North Carolina (BLNC)

Phone:  800.228.8443    www.edpnc.com/start-or-grow-a-business/start-a-business/

BLNC staff are available Monday through Friday, 8:30 am – 4:00 pm.  BLNC staff will connect your business to the appropriate organization for assistance.  All inquiries will receive a response from a confidential business counselor within three (3) business days. 

NC Manufacturing Extension Partnership COVID-19 Resources   https://www.ncmep.org/covid-19-update/

Halifax Community College, Small Business Center
Phone:  252-536-7274       http://www.halifaxcc.edu/SBC/

N.C. Dept. of Health and Human Services: COVID-19 Recommendations for Businesses and Employers https://covid19.ncdhhs.gov/information/business/businesses-and-employers

Centers for Disease Control and Prevention: Interim Guidance for Businesses and Employers https://www.cdc.gov/coronavirus/2019-ncov/community/guidance-business-response.html?CDC_AA_refVal=https%3A%2F%2Fwww.cdc.gov%2Fcoronavirus%2F2019-ncov%2Fspecific-groups%2Fguidance-business-response.html

Halifax County Health Department https://www.halifaxnc.com/182/Health-Department

U.S. Small Business Administration: Coronavirus (COVID-19): Small Business Guidance & Loan Resources https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resources

Lake Gaston Chamber of Commerce   www.lakegastonchamber.com

Halifax County Convention & Visitors Bureau  www.visithalifax.com

OTHER FUNDING RESOURCES

NC Community Development Initiative www.ncinitiative.org

For additional information, please contact: 
Cathy A. Scott, Executive Director
Halifax County Economic Development Commission
260 Premier Boulevard – Roanoke Rapids, NC 27870
Phone:  252-519-2630   Email:  cathyscott@halifaxdevelopment.com
Website:  www.halifaxdevelopment.com

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