Federal Disaster Loans are available for small businesses or private, nonprofit organizations.
In response to the current COVID-19 pandemic, federal, state and local governments are ushering in an array of programs and tax relief measures to help mitigate the adverse economic impact of COVID-19 on business and nonprofit entities.
This Alert identifies and provides an overview of available economic programs, tax relief measures and deadline extensions for applicable Pennsylvania and Philadelphia organizations affected by the COVID-19 pandemic and closures.
Economic Programs: Grants and Loans
Small Business Administration Economic Injury Disaster Loan Program
Federal Disaster Loans are available for small businesses or private, nonprofit organizations that suffer substantial economic injury as a result of the declared disaster, regardless of whether the entity sustained physical damage.
Small Business Administration Paycheck Protection Program
The Paycheck Protection Program is a loan designed to provide a direct incentive for small businesses to keep their workers on the payroll.
The COVID-19 Working Capital Access Program (CWCA)
This working capital loan (now closed) is for any for-profit businesses located in Pennsylvania and with 100 or fewer employees worldwide. These businesses are eligible to apply for disaster relief loans for previously incurred expenses.
Loan Amount: Lesser of $100,000 or: (1) three months of working capital generally; and (2) for retail and service companies, one-half of six months of working capital or $100,000.
Interest Rate: Zero percent for all business types except agriculture producers, defined as “a business involved in the management and use of a normal agricultural operation for the production of a farm commodity,” which have a 2 percent interest rate. Loans have 12-year amortization.
Term: Three years principal, and if applicable, interest payments will be due monthly for years two and three; and a balloon payment will be due and payable at the end of the third year.
Eligible Uses: 100 percent of working capital costs incurred in the last three months for most businesses, or incurred in the last six months for retail and service businesses provided only 50 percent of those costs will be eligible (which calculates to three months of business expenses).
Pennsylvania Industrial Development Authority (PIDA) Low-Interest Loans
These low-interest loans and lines of credit are for eligible businesses that commit to creating and retaining full-time jobs and for the development of industrial parks and multitenant facilities.
Interest Rate: Based on current market conditions.
Term: Up to one year (renewable) for working capital and accounts receivables; 10 years for machinery and equipment purchases; or 15 years for land and building acquisitions and construction/renovation projects.
PHL COVID-19 Small Business Relief Fund
This program offers grants or zero-interest loans to certain eligible Philadelphia small businesses impacted by the COVID-19 pandemic (such as losing 50 percent or more of their revenue due to the pandemic), which encompasses three relief programs under a single application process:
Micro Enterprise Grant: Up to $5,000 for business with less than $500,000 in annual revenue.
Small Business Grant: Up to $25,000 for business with between $500,000 and $3 million in annual revenue.
Small Biz Zero-Interest Loan: Loan for $25,000 to $100,000 for business with between $3 million to $5 million in annual revenue; no collateral required.
Tax Measures and Deadline Extensions
Extension of Pennsylvania Personal Income Tax Return Filing Deadline to July 15, 2020
The filing deadline has been extended 90 days to July 15, 2020, consistent with the federal filing extension. Penalties and interest on 2019 personal income tax payments through the new deadline are waived. This extension applies to both final 2019 Pennsylvania tax returns and payments, and estimated payments for the first and second quarters of 2020.
Waiver of Penalties on Accelerated Sales Tax Prepayments
The Pennsylvania Department of Revenue is waiving penalties for businesses that are required to make Accelerated Sales Tax (AST) prepayments by the deadline of Friday, March 20.
Notice on Extension of Tobacco Product Dealer Licenses
The Pennsylvania Department of Revenue has extended all tobacco products dealer licenses that were set to expire February 29, 2020, until further communication is received from the department.
IFTA/MCRT Requirements Temporarily Waived
Certain requirements concerning the International Fuel Tax Agreement (IFTA) and Motor Carrier Road Tax (MCRT) are temporarily waived by the Pennsylvania Department of Revenue for all commercial carriers and vehicles traveling into or within Pennsylvania. This waiver applies to decals, temporary permits and trip permits. The temporary waiver remains in effect from March 19, 2020, until it is determined by Governor Wolf that the emergency no longer exists, or for 30 days, whichever occurs later.
Philadelphia Commercial Real Estate Tax 2020
The due date for 2020 Philadelphia commercial real estate taxes has been extended to April 30, 2020.
Philadelphia Business Income and Receipts Tax and Net Profits Tax
The due date for Philadelphia Business Income and Receipts Tax and Net Profits Tax has been extended to July 15, 2020.
About Duane Morris
Duane Morris has created a COVID-19 Strategy Team to help organizations plan, respond to and address this fast-moving situation. Contact your Duane Morris attorney for more information. Prior Alerts on the topic are available on the team’s webpage.
For More Information
If you have any questions about this Alert, please contact Brad A. Molotsky, Sandra G. Stoneman, Daniel L. Mita, or any member of the COVID-19 Strategy Team or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.