Santa Clara County Business & Workplace Updates
PPP Direct Forgiveness Portal
The U.S. Small Business Administration (SBA) has launched a Payment Protection Program (PPP) Direct Forgiveness Portal, which will help streamline the forgiveness process for loans of $150,000 or under, and allow small business owners to apply directly through the SBA. The new forgiveness platform will begin accepting applications from borrowers on August 4, 2021 and is currently operating under an invite-only pilot period.
Small business owners who applied for a PPP loan should be aware of the processes and requirements to apply for PPP loan forgiveness. Taking the following steps to complete the loan forgiveness process will give you peace of mind.
Here are some key facts to consider as you navigate the process.
About the PPP Direct Forgiveness Portal
- Only some lenders will be participating in the SBA portal. Lenders may opt in to using the portal instead of handling the forgiveness process themselves.
- Only PPP borrowers with loans under $150,000 may use the SBA portal. If your loan is larger, you will need to apply for forgiveness through your bank. The SBA portal uses an electronic form equivalent to SBA Form 3508S.
- Upon receipt of notice that a borrower has applied for forgiveness through the portal, lenders will review the application and issue a forgiveness decision to the SBA, all within the portal.
- The SBA will be issuing more detailed guidance regarding
- the process for lenders to opt-in to the direct forgiveness portal,
- the process for borrowers with loans of $150,000 or less to access the portal and submit their loan forgiveness applications directly through the portal, and
- the process for lenders to access the applications in the portal to perform reviews of their borrowers’ applications, issue forgiveness decisions to the SBA, and request forgiveness payments from the SBA.
- During the transition period after the launch of the direct forgiveness process, lenders that opt-in will be expected to complete the processing of any applications that have already been submitted by borrowers to the lender and should inform such borrowers not to submit a duplicate loan forgiveness application through the portal.
After the launch of the portal, borrowers will continue to submit loan forgiveness applications to their lenders, rather than through the portal, under the following circumstances:
- The PPP lender does not opt-in to use the direct borrower forgiveness process;
- The borrower’s PPP loan amount is greater than $150,000;
- The borrower does not agree with the data as provided by the SBA system of record, or cannot validate their identity in the portal (for example, if there is an unreported change of ownership); or
- For any other reason where the portal rejects the borrower’s submission.
You can only apply through the SBA’s portal if you have not already submitted a forgiveness application with your lender..
Get in touch with your lender
The SBA began accepting forgiveness application forms on August 10, 2020. But while the SBA released its own form, borrowers may complete the forgiveness process through their lender, as they may have their own forms and requirements to process the application. Please note that some lenders have opted in to process the forgiveness process through the PPP Direct Forgiveness Portal, so make sure to get in touch with your lender to confirm their unique loan forgiveness process.
Some additional documents you may need to submit are:
- Payroll records
- Receipts and agreements for approved non-payroll costs (mortgage interest, rent, utilities)
- Other documents deemed necessary by the SBA
Be aware of the timeline
Small business owners may apply for PPP loan forgiveness at any time before the loan is due, but experts advise borrowers to initiate and complete the application forms within 10 months of having received the loan. After the initial 10 months pass, the PPP funding converts to a loan (at 1% interest rate) so you still have some time to get your application in.
You may not need to complete the loan forgiveness application
PPP loans under $150,000 borrowers are only required to sign and submit a one-page SBA-approved certification to the lender. Borrowers will also need to provide a description of the number of employees retained due to the loan, and the estimated amount of the covered loan spent on payroll costs and the total loan amount. Borrowers must attest that they complied with PPP loan requirements, including that at least 60 percent of the funds were spent on payroll.
The SBA announced on July 6, 2021 that it would eliminate the loan necessity review for PPP loans of $2 million or more, and said further guidance would be forthcoming.
Who qualifies for the EZ Forgiveness Form?
Certain borrowers are eligible to fill out the EZ Form, which is a simplified loan forgiveness form. Borrowers are eligible to fill out the EZ form if they meet one of the following criteria:
- Are self-employed and have no employees; OR
- Did not reduce the salaries or wages of their employees by more than 25%, AND did not reduce the number or hours of their employees; OR
- Experienced reductions in business activity as a result of health directives related to COVID-19, AND did not reduce the salaries or wages of their employees by more than 25%.
For more information and to see the frequently asked questions on loan forgiveness, visit the U.S. Small Business Administration’s FAQ about PPP Loan Forgiveness.
Business Grants and Loan Information
City of Gilroy Small Business Relief Program Now Open! Businesses operating within the city limits of Gilroy may qualify for a one-time business relief grant using federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding.
Partners available to help prepare loan paperwork:
Service Corp of Retired Executives SCORE
Minority Business Development Agency MBDA
Gilroy SBDC Rep: Business Advisor Mary Castillo Avalos, email@example.com or cell (831) 535-3705.
Please note that this situation remains fluid and information about programs is still evolving. These are the known resources available to businesses currently.
The State of California Treasurer’s Office Small Business Resources Page has a great deal of information available for businesses including grants and other programs by County and City.
The Restaurant Revitalization Fund, with $28 billion in relief funds, is now open to provide relief for food-based businesses and the professionals that work with them.
The Shuttered Venue Operators (SVO) Grant will provide $15 billion in emergency assistance for eligible venues affected by the COVID-19 pandemic and be administered by the Small Business Administration’s Office of Disaster Assistance.
City of Gilroy Small Business Relief Program: Businesses operating within the city limits of Gilroy may qualify for a one-time business relief grant using federal Coronavirus Aid, Relief, and Economic Security (CARES) Act funding.
California Rebuilding Fund– 3 or 5-year term loans with a fixed annual interest rate that is currently 4.25%, businesses who employed 50 or less full-time equivalent employees (FTEs) and had gross revenues of less than $2.5 million or below in 2019 are eligible to apply.
Intuit QuickBooks and GoFundMe– Small Business Relief Initiative
Accion Opportunity Fund- Supporting the Resilience of Hard-Working Entrepreneurs, providing loans in a range of sizes through Opportunity Fund, as well as educational resources, coaching, and support networks in English and Spanish.
CDC Small Business Finance- Low-interest loan with affordable terms.
Lift Fund- Provided over $300 million in small business financing loans to more than 20,000 business owners.
Access + Capital- Their mission is to grow businesses and jobs in underserved communities.
California Treasurers Office- The California Capital Access Program (CalCAP) is a loan loss reserve program supporting small business lending.
Federal Disaster Loans for Businesses, Private Nonprofits, Homeowners, and Renters (Federal Declaration)-Injury SBA Loan.
Federal Tax Credits
Paid Leave Credit for Vaccines — The American Rescue Plan Act of 2021 (ARP) allows small and midsize employers, and certain governmental employers, to claim refundable tax credits that reimburse them for the cost of providing paid sick and family leave to their employees due to COVID-19, including leave taken by employees to receive or recover from COVID-19 vaccinations. The ARP tax credits are available to eligible employers that pay sick and family leave for leave from April 1, 2021, through September 30, 2021. For more Information see the IRS fact sheet.
Employee Retention Credit — New law extends coronavirus tax credit for employers who keep workers on payroll: New law extends coronavirus tax credit for employers who keep workers on payroll. The Taxpayer Certainty and Disaster Tax Relief Act of 2020, enacted December 27, 2020, amended and extended the employee retention credit (and the availability of certain advance payments of the tax credits) under section 2301 of the CARES Act.
Sick and Family Leave Credits — COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses: COVID-19-Related Tax Credits for Required Paid Leave Provided by Small and Midsize Businesses. The COVID-Related Tax Relief Act of 2020, enacted December 27, 2020, amended and extended the tax credits for paid sick and family leave under sections 7001-7005 of the Families First Coronavirus Response Act.
EDD Employer Resources
Latest News for Employers
- Pandemic Unemployment Assistance (PUA) is one of the federal provisions that helps unemployed Californians who are not usually eligible for state Unemployment Insurance (UI) benefits. This includes business owners, self-employed workers, independent contractors, and those with a limited work history who are out of business or have significantly reduced their services as a direct result of the pandemic.
- Federal assistance provided additional weekly unemployment benefits to unemployed workers. These benefit payments are 100 percent federally funded and will not impact your state unemployment tax contribution rate.
- State and local governmental entities, certain nonprofit organizations, School Employees Fund employers and federally recognized Indian tribes that have elected the reimbursable method of paying for unemployment benefits will receive partial credits (generally 50 to 75 percent) for all payments made to the state’s unemployment trust fund starting from March 13, 2020.
- Federal funds are available to help businesses in the Los Angeles region facing layoffs and closures and their affected workers. For more information, visit COVID-19: Additional Assistance Funds for Workers and Businesses.
Workplace Health and Safety
For information on protecting workers from COVID-19, refer to the Cal/OSHA Guidance on Coronavirus.
Visit the Centers for Disease Control and Prevention website for help with planning and responding to COVID-19.
Reduced Work Hours
If you are experiencing a slowdown in your businesses or services as a result of the coronavirus impact on the economy, you can apply for the Unemployment Insurance (UI) Work Sharing program.
Work Sharing Program
This program allows employers to seek an alternative to layoffs — retaining their trained employees by reducing their hours and wages that can be partially offset with UI benefits. Workers of employers who are approved to participate in the Work Sharing program receive the percentage of their weekly UI benefit amount based on the percentage of hours and wages reduced, not to exceed 60 percent. The Work Sharing program also helps employers rehire laid-off employees as business conditions improve.
To learn more about Work Sharing benefits for you and your employees, and how to apply, visit Work Sharing Program.
Potential Closure or Layoffs
If you are planning a closure or major layoffs as a result of the coronavirus, you can get help through the Rapid Response program. Rapid Response teams will meet with you to discuss your needs, help avert potential layoffs, and provide immediate on-site services to assist workers facing job losses. For more information, refer to the Rapid Response Services for Businesses Fact Sheet (DE 87144RRB) (PDF) or contact your local America’s Job Center of CaliforniaSM.
Governor Newsom issued Executive Order N-31-20 (PDF), which temporarily suspends the 60-day notice requirement in the California WARN Act for those employers that give written notice to employees and satisfy other conditions. The suspension was intended to permit employers to act quickly in order to mitigate or prevent the spread of coronavirus. The Executive Order does not suspend the California WARN Act in its entirety, nor does it suspend the law for all covered employers. The Executive Order only suspends the California WARN Act’s 60-day notice requirement for those employers that satisfy the Order’s specific conditions. Employers should continue to file a WARN per the legislation requirements regardless if the 60-day notice timeframe is not met. For more information, visit COVID-19: WARN FAQs.
If you are experiencing a hardship as a result of COVID-19, you may request up to a 60-day extension of time from the EDD to file your state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return.
For questions, call the EDD Taxpayer Assistance Center.
- Toll-free from the US or Canada: 1-888-745-3886
- TTY: 1-800-547-9565
- Outside the US or Canada: 1-916-464-3502
Unemployment Tax Relief
Tax-rated employers are employers who pay Unemployment Insurance taxes each year. Federal assistance and state legislation is providing some unemployment tax relief. For benefits paid between January 27, 2020, and September 4, 2021, all COVID-19-related charges will be removed from your reserve account, minimizing the impact to your experience rating, unless you or your agent were at fault. Also, you will not be charged the costs of the additional weeks of FED-ED benefits.
Federal assistance provided emergency unemployment tax relief to state and local governmental entities, certain nonprofit organizations, and federally recognized Indian tribes. The law allows a 50 percent credit for Unemployment Insurance (UI) benefit charges for benefit weeks between March 13, 2020, and April 3, 2021. With the most recent federal relief package, the law allows a 75 percent credit for UI benefit charges for benefit weeks between April 4, 2021, and September 4, 2021. This credit is available even if the former employee is not unemployed as a result of COVID-19. This relief also applies to School Employees Fund employers.
The Protecting Nonprofits Act, S. 4209 allows states to reduce the amount reimbursable employers must pay. With this change, employers are no longer required to pay the reimbursable charges in full in order to receive the credit. No action from employers is needed at this time.
If you are experiencing financial difficulty as a result of COVID-19 and are unable to make payments on time for charges shown on your Notice of Amount Due (DE 6601) or Statement of Account (DE 2176), you can request a penalty waiver for late payments. You can also request an installment agreement if you need to make payments over time.
To request a penalty waiver or installment agreement, call 1-888-435-4990 to speak with a Tax representative.
Small Business Relief Payment Plans for Sales and Use Tax
Effective December 15, 2020, small business taxpayers with less than $5 million in taxable annual sales, can take advantage of a 12-month, interest-free, payment plan for up to $50,000 of sales and use tax liability only. All payment plans must be paid in full by April 30, 2022, to qualify for zero interest. Businesses with $5 million or more in annual taxable sales in sectors particularly impacted by operational restrictions due to the pandemic may also apply for this 12-month interest-free payment plan. Please note: This relief only applies to sales and use tax due on returns with original due dates between December 15, 2020 and April 30, 2021. A business that previously took advantage of the 12-month, interest-free payment plan that must be paid in full by July 31, 2021, may also request to participate in this new 12-month interest-free payment plan.
Payment plan requests can now be made through our online services system. The small business relief payment plan application will be available for you one business day after you file your return(s). You must log into your online services account using your username and password to make the request. Once logged in, select the appropriate sales and use tax account, then select “Request an Interest Deferred Payment Plan” under the “I Want To” section to begin your request. If you need help logging in, please watch one of our video tutorials or call our customer service center at 1-800-400-7115 (CRS:711).
Customer service representatives are available Monday through Friday 8:00 a.m. to 5:00 p.m. except state holidays.
Guidelines for the Commercial Eviction Moratorium
Information for Landlords of Small Business Tenants
If you are a landlord of a small business tenant that qualifies under the County’s eviction moratorium ordinance and you initiate an eviction for non-payment of rent during the moratorium, you must:
- Provide small business tenants with this written notice of the reason for the eviction and notice of the tenants’ rights when serving the notice of termination; and
- Provide resources for rental assistance programs.
You still have a right to collect rent if the small business tenant qualifies for protection under the moratorium. However, the protected small business tenant has 6 months after the moratorium ends to repay at least 50% of the past-due rent and 12 months after the moratorium ends to repay in full the past-due rent. You cannot charge a late fee. Before initiating any repayment plan with a small business tenant protected under this moratorium, you must first inform the small business tenant of these repayment protections. The ordinance prohibits negotiations between a landlord and small business tenant that result in the tenant’s waiver of its rights under the ordinance. You may risk being subject to civil fines and penalties, monetary damages and injunctive relief if you do not comply with the moratorium.
This moratorium does not apply to otherwise lawful or at-fault evictions for reasons other than nonpayment of rent due to a substantial loss and/or out-of-pocket medical expense as a result of COVID-19.
Information for Small Business Tenants
If you are a small business tenant, you can use this form to provide your landlord with documentation of substantial income loss and/or substantial out-of-pocket medical expenses that is directly related to your failure to pay rent as a result of the COVID-19 pandemic as soon as possible.
Examples of substantial loss of income due to COVID-19 include:
- Temporary closure of or reduction in operating hours of a place of business or substantial decrease in business income
Examples of documentation you can provide include:
- Bank statements or financial documents showing your business’ financial situation before and during the COVID-19 pandemic
You may be able to take your landlord to court if they do not comply with the moratorium or use their non-compliance in any eviction proceeding.
For more information about the eviction moratorium, please see our list of frequently asked questions.
"Joining the Gilroy Chamber of Commerce is one of the best business decisions I have made."
Anita Bedoya, Owner, Lapels Dry Cleaning
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Ryan and Larissa Dickerson, Owners of Bitter Taphouse
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James Gargiulo, Spectrum Small Business Advisor
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Jaime Rosso, CEO, Rosso’s Furniture
"We have been actively involved in the Chamber for 20 years. We continue to stay involved because of the critical information they provide."
Bruce & Audrey Haller, Cafe 152 Bread Co.
"As a Gilroy Chamber of Commerce member, I’ve met more people, been able to give back to the community and be involved in decisions that affect our local economy."
Maria Cid, Farmers Insurance