It’s becoming clearer by the day that every company in California and around the country will feel an economic impact from COVID-19. Businesses that are able are shifting to remote operations, those deemed “essential” are staying open while facing supply chain issues, and those “non-essential” are trying to sort out how long lockdowns could last and how to stay afloat. Newfront supports thousands of commercial clients across the state, and we stand ready to serve you.
To help during this time of uncertainty, we recommend reviewing your policy with your Newfront broker to reforecast your business performance for 2020 and adjust insurance premium expenses where possible. For companies looking for financial support, take note of the Families First Coronavirus Response Act signed into law last week. The program provides for tax benefits for companies with up to 500 employees to provide paid leave to qualifying employees for up to 3 months, with a tax credit equal to 100% of the benefits used through December 31, 2020. On the subject of taxes, the April 15th filing deadline has officially been extended until July 15th of this year, allowing you to defer federal tax payments interest and penalty free.
For immediate access to working capital, the US Small Business Administration is now offering low-interest fixed-rate loans of up to $2M to help small businesses and non-profits in California meet payroll and other financial obligations that are being disrupted due to coronavirus. Applications are now available through December 16, 2020 but we encourage you to apply as soon as possible. California’s IBank Small Business Finance Center disaster relief loan guarantee program is available to companies with up to 750 employees in securing loans of up to $20M. Contact a local Financial Development Corporation for support. For access to micro-loans from $5-20K, San Francisco and Los Angeles have both established programs available to small businesses.
Where possible, we recommend reaching out to your business partners (landlords, suppliers, wholesalers) and asking whether they’d be willing to assist you with a grace period on your existing liabilities, temporarily reduced payments with reinstatement schedules (with or without interest), or relaxed debt to income covenants on your existing contracts. Make sure to follow up on existing accounts receivable and consider offering a discount on immediate payment. Your business credit card may offer interest-free deferred payments and waived fees for up to 60 days.
As always, reach out to your Newfront broker for questions on risk management and policy reviews. We’re here to support you and ensure the longevity of your business through these unprecedented times and into the future.
The information provided is of a general nature and an educational resource. It is not intended to provide advice or address the situation of any particular individual or entity. Any recipient shall be responsible for the use to which it puts this document. Newfront shall have no liability for the information provided. While care has been taken to produce this document, Newfront does not warrant, represent or guarantee the completeness, accuracy, adequacy, or fitness with respect to the information contained in this document. The information provided does not reflect new circumstances, or additional regulatory and legal changes. The issues addressed may have legal, financial, and health implications, and we recommend you speak to your legal, financial, and health advisors before acting on any of the information provided.