Financial Relief for Childcare Centers Affected by COVID-19
We are in uncertain times due to the spread of the COVID-19 virus. Child Care Centers have also been significantly impacted by measures implemented to prevent the virus from spreading. Thankfully, the government has committed significant resources to aid small businesses in order to help them through these difficult times.
This article provides resources that will assist your child care center with accessing financial relief to help you prevent layoffs and preserve the health of your business. We have provided resources for our customers across North America, so you will notice that they are grouped by country.
Due to the government's recommendations to put much of the country under a “Shelter in Place” many people are out of work. We know this specifically affects those in the childcare business.
Whether your center is closed or still remains open it is important to know the benefits available for you and your staffing team. Check out the changes as of March 12, 2020 released by the Department of Labor Laws.
“Under the guidance, federal law permits significant flexibility for states to amend their laws to provide UI benefits in multiple scenarios related to COVID-19. For example, federal law allows states to pay benefits where: (1) An employer temporarily ceases operations due to COVID-19, preventing employees from coming to work; (2) An individual is quarantined with the expectation of returning to work after the quarantine is over; and (3) An individual leaves employment due to a risk of exposure or infection or to care for a family member. In addition, federal law does not require an employee to quit in order to receive benefits due to the impact of COVID-19.”
Source: U.S. DEPARTMENT OF LABOR
When researching further you will notice that the unemployment benefits have increased as well. “The expanded benefits include an extra $600 per week, bringing California’s max weekly benefit to over $1,000.”
Click here to begin the process to enroll for unemployment benefits. (Information may vary depending on which state you reside in.)
As of March 31, 2020 President Trump has signed a bipartisan $2 trillion economic relief plan.
This plan includes payments to individuals, the expansion of the unemployment benefits mentioned above, student loan changes, retirement rules and so much more.
New York Times is a great reference to this stimulus package and explains how it works. They explain that most adults will get $1,200 and for each qualifying child under 16 years of age the guardian will receive an additional $500.
You might be asking who is eligible for this pay? They explain that:
“It depends on your income. Single adults with Social Security numbers who have an adjusted gross income of $75,000 or less will get the full amount. Married couples with no children earning $150,000 or less will receive a total of $2,400. And taxpayers filing as head of household will get the full payment if they earned $112,500 or less.
Above those income figures, the payment decreases until it stops altogether for single people earning $99,000 or married people who have no children and earn $198,000. According to the Senate Finance Committee, a family with two children will no longer be eligible for any payments if its income surpassed $218,000.
You can’t get a payment if someone claims you as a dependent, even if you’re an adult. In any given family and in most instances, everyone must have a valid Social Security number in order to be eligible. There is an exception for members of the military.”
Source: New York Times
This package is available based on your 2019 tax information. If you have connected your bank account for taxes the money will be deposited directly into your account. If you are a college student and someone else claims you on their taxes you will not be eligible.
Small Business Support
There is no doubt that small businesses play a major role in the economy and that has not gone unnoticed. The CARES Act, which contains $376 billion for Americans and small businesses has been signed as of Friday, March 27, 2020.
This includes these additional funding programs:
Paycheck Protection Program
This loan program provides loan forgiveness for retaining employees by temporarily expanding the traditional SBA 7(a) loan program.
EIDL Loan Advance
This loan advance will provide up to $10,000 of economic relief to businesses that are currently experiencing temporary difficulties.
SBA Express Bridge Loans
Enables small businesses who currently have a business relationship with an SBA Express Lender to access up to $25,000 quickly.
SBA Debt Relief
The SBA is providing a financial reprieve to small businesses during the COVID-19 pandemic.
Canada is doing what it can to prevent massive layoffs in businesses across the country. They have unveiled an $82 billion economic aid package including $27 billion for employees and businesses. This will include items like sickness benefits, unemployment benefits, and wage subsidy.
To prevent layoffs, the government is providing a 75% wage subsidy to eligible small businesses.
Who is eligible?
- Businesses (regardless of the number of employees)
- Individual employers
- Not for profit organizations
- 15% reduction of their gross revenue in March; and/or
- 30% reduction of their gross revenue in April or May
The EI Work Sharing Program has also been launched and provides EI benefits for employees who have agreed to reduce their hours.
Who is eligible?
- All non-profit companies.
- Companies with a business & payroll number as of March 18.
- Companies that pay salaries, wages, bonuses or other forms of remuneration.
- Private companies who earned less than $15 million in revenue last year.
What records do companies need to keep?
- Total remuneration paid between March 18 and June 20, 2020
- Federal, provincial or territorial income tax that was deducted from that remuneration
- Total number of employees paid from March 18 to June 20, 2020
Tax payments that are due between now and September 2020 will be deferred by the CRA.
There will be no post-assessment GST/HST or Income Tax audits for the next few weeks and for many businesses already in audit interactions, they will be temporarily suspended.
Any small businesses that need assistance with understanding their tax obligations can schedule an over the phone meeting with a liaison officer. The officer will be able to provide more information with regards to tax relief available.
The BDC (Business Development Bank of Canada) supports small and medium-sized businesses with loan and advice.
They have launched a Business Credit Availability Program. Through this program there are two options, the Canada Emergency Business Account and SME Loan and Guarantee program.
The Canada Emergency Business Account program provides up to $40,000 with zero interest for the first year. This will be available through your primary financial institution. Visit your banks website for more information on how to apply.
With the SME Loan and Guarantee program, the BDC co-lending option provides up to $6.25 million with a commercial interest rate on a 10-year repayment period. (There is a EDC BCAP Guarantee that also provides up to $6.25 million.)
Contact your primary financial institution for more information.
Things are changing rapidly and we will continue to update this article as new information is released. Please help us keep this page as accurate as possible by sharing any additional resources or updated information that you come across.
We hope that these resources are helpful. If you have any questions don't hesitate to contact our team as we are happy to be a resource to you in this difficult time.
Stay safe, let's get through this together!