Businesses can look into different types of loans and programs being offered throughout this pandemic with the Rio Rancho Regional Chamber of Commerce.
On April 8, the chamber hosted a Zoom conference with its president and CEO Jerry Schalow and Javier Caltenco from the U.S. Small Business Administration to help guide business owners through this difficult time.
“Quite honestly, it has been a very bumpy road. SBA is going through a lot of challenges,” Schalow said.
This is new territory for everyone, and the chamber is working remotely to help businesses navigate the effects of the COVID-19 pandemic, he said.
The chamber uploaded the presentation that includes all the programs available below and more. It explains what’s available.
Here are the highlights and most-discussed programs from the presentation.
Delays payment of employer payroll taxes that include Social Security until Jan. 1, 2021.
Half of the money saved from not paying this tax will have to be paid by Dec. 31, 2021, and the other half is due Dec. 31, 2022.
This program does not apply to employers who have loans forgiven under the Paycheck Protection Program (PPP), Schalow said.
The tax changes with this program include:
• Net operating loss for 2018, ‘19 and ‘20 can be carried back five years, suspended 80 percent limitation, extends to pass-throughs and sole proprietors;
• Accelerate recovery of alternative minimum tax credits;
• Election to increase the limit on interest deductibility to 50 percent for 2019 and ‘20; and
• Qualified Improvement Property (QIP) fix, according to the PowerPoint presented in the Zoom conference.
“So you’re basically deferring your taxes due this entire year for payroll taxes into the next year and the following. It is a great program,” he said.
Employee Retention Credit
The Employee Retention Credit is available to employers fully or partially shut down or experiencing a 50 percent drop in gross receipts in a quarter, compared to the prior year.
This is a refundable tax credit for 50 percent of wages paid by the employer up to $10,000 per employee.
Employers are not eligible for this credit if they receive a PPP loan, Schalow said.
“This really doesn’t help you today; this program helps you in the future,” he said.
Economic Development Dept. loans
The New Mexico Economic Development Department created this program to assist businesses seeking emergency loans or lines of credit to deal with the economic effect of the global pandemic.
NMEDD can guarantee a portion of a loan or line of credit up to 80 percent of principal or $50,000. An example of this would be with a $60,000 loan, $48,000 is guaranteed by the state.
Loan proceeds are flexible and can be used for things such as working capital, inventory, payroll and more.
NMEDD will guarantee a loan for up to two years. This loan is not limited to an industry, how long a business has been open or number of employees.
Business discloses how it’s negatively impacted in the application.
The borrower approaches the lender; the lender applies for the program; the lender and NMEDD sign an agreement; the lender makes a loan; and NMEDD guarantees the loan in case of default, according to the presentation.
Participating lenders include Rio Grande Federal Credit Union and Sandia Area Federal Credit Union.
“I was very excited to see the state come up with this program,” Schalow said.
Paycheck Protection Program
The PPP was discussed during the Zoom conference, but as of press time, the SBA was unable to accept new applications for the program, based on available appropriations of its funding, according to its website.
This loan was designed for businesses with less than 500 employees and guarantees loans to employers who maintained their payroll through the emergency.
Economic Injury Disaster Loans
The EIDL would be for small businesses, independent contractors and nonprofits.
To be eligible for this loan, organizations must have fewer than 500 employees.
This loan includes:
• Up to $2 million working capital loan up to a 30-year term; 3.75 percent interest rate for small businesses; 2.75 percent rate for nonprofits;
• Payments deferred up to a year;
• Loans based on credit scores;
• Up to $200,000 without a personal guarantee;
• No collateral for $25,000 or less; general security interest instead of real-estate for larger loans;
• $10,000 emergency grant within three days that does not have to be repaid, although as of press time, the SBA was no longer accepting applications for the grant part of the program because no more funding was available for it at the time;
• Interacts with PPP, according to the presentation.
There have been a few drafts of the application for this loan, Schalow said. The chamber has seen a few processes in regards to this program.
“If you haven’t heard anything back and you didn’t use the streamline application, I would go ahead and recommend you apply with the streamline application. It is much simpler,” Caltenco said.
This application is available on the SBA website, sba.gov.
Things are still in the works and the program is changing, Caltenco said.
Schalow said businesses should apply for the program whether or not they think they’ll use it.
To learn more about resources, visit rrrcc.org/covid-19-toolkit/.
SBA is backlogged with applications and has hired more employees to assist. Schalow said SBA is striving to have any problems resolved by Tuesday.
“The SBA is working on this, and they have had challenges,” he said. “Again, as I started out saying, no business, no chamber, city or county organization, or SBA or federal government ever thought we would be in the position we are today where a number of businesses are counting on funding and finance from the SBA and other sources.”