Here's a program that could help your clients. And, maybe, you.
By Lloyd Lofton | April 08, 2020 at 03:13 AM
The coronavirus pandemic has created
uncertainty and stress for many agents and advisors.
The state of Pennsylvania has just banned
in-person sales of insurance products during that state’s stay-at-home period,
which will surely have an impact on commissions and business practices.
Other state departments of insurance will most
likely follow this course.
Everyone is looking for ways to be of service
to their clients and help people protect their family while also adapting for
ways to preserve their business.
The Coronavirus Aid, Relief, and Economics
Security Act, (CARES) that was just passed and signed by the president offers
some relief.
Here are some of the provisions of the CARES
Act.
Sick Leave
Requirements
This provision provides 80 hours (two weeks)
of sick leave for full-time employees. It’s available for immediate use if a
full-time employee:
1.
Is sick or quarantined
(paid at 100% of employer rate, and capped at $511 per day, and $5,110 total);
or
2.
Is caring for someone
who is sick and quarantined, or is caring for a child and has lost child care
due to the public health emergency (paid at 66.7% of the employee rate and
capped at $200 per day, and $2,000 total)
A related Family and Medical Leave Act (FMLA)
expansion provision provides up to 12 weeks of FMLA leave, unpaid during the
first 10 days, and then paid at 66.7% of the employee rate (capped at $200
per day, and $10,000/total). The extra FMLA leave is available after 30
days of employment.
Sick Leave Requirement
Resources
The CARES Act provides employer tax credits to
help cover the cost of the employee leave benefits, computed quarterly.
There are three relevant periods to compute
the amount of the credit:
1.
First
Two Weeks: This credit
relates to qualified sick leave wages paid. The credit amount depends on
whether the employee is sick, caring for a sick family member, or providing
childcare to the employee’s child.
2.
Employee
Sick: The credit is
the lesser of the daily wage or $511 per employee, per day, for 10 days.
3.
Providing
Care for Family Member, or Child Care for a Child: The credit is the lesser of the daily
wage or $200 per employee, per day, with the credit capped at $10,000 per
employee for a given calendar quarter.
Loans
Through one loan program, the Small Business
Loan Relief program, the Small Business Administration (SBA) will pay all
principal, interest, and fees on all preexisting SBA 7(a) loan products for six
months, to provide economic relief.
The CARES Act also provides a Paycheck
Protection Program (PPP) and Economic Injury Disaster Loans (EIDL)
A small business may receive both PPP and EIDL
loans; however, the funds must be used for different purposes.
SBA Paycheck
Protection Program
This program is designed for small businesses,
to preserve the employees’ salaries.
In can provide up to $10 million, payable over
10 years, at an interest rate of 4%.
Loans could equal up to 250% of the average
monthly total payroll costs incurred during the year prior to the loan date.
Payroll costs exclude any compensation made in excess of $100,000 for any
employee, sole proprietor, independent contractor, and self-employed
individual.
The PPP loan can function much like a grant,
given that it can be fully or partially forgivable.
The employers eligible for this program are
employers that have fewer than 500 employees, or that fit into certain special
categories, such as 501(c)(3) organizations, sole proprietorships and
independent contractors.
Small Business Loans:
Emergency
These loans are designed to provide economic
relief due to and emergency or catastrophe. They can be used to pay fixed
debts, payroll, accounts payable and other bills that can’t be paid due to the
epidemic’s economic impact.
This program could help up to 2 million;
payable over 30 years, with an interest rate of 3.7% or 2.75%.
The program provides a $10,000 advance. The
advance need not be repaid.
The borrowers eligible for these loans are
small businesses, as defined by NAICS industry codes, based on revenue or
employees, and nonprofits, including Section (c)(6) organizations of any size.
Employee Retention
Credit
This CARES Act tax credit program provides a
refundable payroll tax credit for 50% of wages paid by employers to employees
during the COVID-19 crisis.
The credit is available to employers whose:
·
Operations were fully
or partially suspended, due to the COVID-19-related shut-down order, or
·
Whose gross receipts
declined by more than 50% when compared to the same quarter in the prior year
Employers taking certain SBA loans, such as a
Paycheck Protection Program loan, cannot use this provision.
Your own business could qualify, and some of
your clients’ businesses could qualify.
More information is available from the
Coronavirus (COVID-19): Small Business Guidance & Loan guidance, which is
available on this SBA website
Lloyd Lofton is
the founder of Power Behind
the Sales and the author of The Saleshero’s Guide To Handling Objections.
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