First details of COVID-19 relief for businesses, unemployed

MOSES LAKE — For businesses in the Columbia Basin, struggling with the continuing effects of COVID-19-related restrictions and closures, help is on the way.

On Sunday, President Donald J. Trump signed the nearly 6,000-page, $900 million COVID-19 relief act, which includes $284.5 billion for another round of loans under the Paycheck Protection Program (PPP), $120 billion for “enhanced” unemployment insurance, $13 billion in payments to farmers, and $600 “stimulus” checks to individuals.

Speaking during an online webinar organized by the Moses Lake Chamber of Commerce and the Grant County Economic Development Council (EDC) on Tuesday afternoon, Chera Anderson — vice president for commercial lending at the Washington Trust Bank branch in Moses Lake — said the latest round of PPP loans is fairly similar to those authorized in April.

The original PPP program allowed small businesses worth $15 million or less with 500 or fewer employees to borrow up to 2.5 times a single month’s payroll (up to $10 million), payable over a period of 24 weeks. The loans, which are guaranteed by the federal government, but made through private banks, are eligible for forgiveness if borrowers spend 60% on payroll.

However, Anderson said businesses that have spent all their loan money can apply for a second PPP loan if they can demonstrate a 25% decline in revenue based on the same period in 2019. Second loans are limited, however, to $2 million.

“There are no details in how you have to prove that (loss) at this point,” she said.

Under the new law, restaurants — which have been hardest hit by the latest round of closures nationwide — will be allowed to borrow up to 3.5 times their monthly payroll, Anderson said. Also, the second round of loans can also be spent on software and cloud computing as well as property damage caused by public disturbances.

The forgiveness process for PPP loans of $150,000 or less has also been simplified to a “one-page certification,” Anderson added.

However, while the deadline for the next round of PPP loans has been extended to March 31, 2021, Anderson said banks aren’t ready to take loan applications.

“The actual rules are expected to come out next week, and it takes a little bit of time to get the system up,” she said. “We probably won’t have a lot of information until next Wednesday at the earliest.”

Todd Wurl, with the Washington State Employment Security Department, said the new law extends the additional $300 per week in special unemployment compensation through March 14, and increases the number of weeks an individual may claim unemployment benefits to 50.

In addition, Wurl said Gov. Jay Inslee has authorized an additional $54 million — made in one-time payments of $550 — to nearly 95,000 unemployed Washingtonians.

Wurl also said Inslee has a proposal to roll back some of the proposed unemployment tax increase for 2021, saving employers $790 million, and limiting further tax increases through 2025. However, Wurl said the governor is also proposing to increase the weekly minimum unemployment benefit to $270 from $201 in July.

However, like Anderson, Wurl said his department was waiting for guidance from the federal government.

“Policy experts need to resolve some of the complexities before we create that extension,” he said.

According to Cody Parish, an accountant with Clifton Larsen Allen in Moses Lake, companies that can show a loss of gross revenue of at least 20% can now also apply for employee payroll tax credits that will cover up to $7,000 of payroll costs per quarter for two quarters, and can apply for those credits even if they have also applied for and received a PPP loan.

“It’s a big credit,” Parish said. “It’s actually money in the company’s pocket for paying wages to their employees.”

Also, Parish said PPP loans and stimulus payments are not considered taxable income. And regular expenses paid for with PPP money are now tax deductible under the new law.

“For tax purposes, it is a non-taxable event,” she said.

Business owners looking at taking out a PPP loan should talk with their banker, or their accountant if they are considering tax credits.

Debbie Doran-Martinez, executive director of the Moses Lake Chamber of Commerce, advised everyone to keep at it and not lose hope.

“Hang in there. We’re going to make it,” she said during the webinar. “It’s tough, but we need to hang in there.”

Charles H. Featherstone can be reached at [email protected].