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CARES ACT Emergency Funds for SMBs

(UPDATED 4/01/20; Originally published 3/30/20 using information compiled and provided by the U.S. Chamber of Commerce)

4/1/20 Updates – Paycheck Protection Program

From the SBA information site.

  • You can apply through any existing SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will be available to make these loans once they are approved and enrolled in the program. You should consult with your local lender as to whether it is participating in the program.
  • Lenders may begin processing loan applications as soon as April 3, 2020.
  • If you wish to begin preparing your application, you can download a sample form to see the information that will be requested from you.

The Coronavirus Aid Relief and Economic Security (CARES) Act allocated $350 billion to help small businesses keep workers employed amid the pandemic and economic downturn. Known as the Paycheck Protection Program, the initiative provides 100% federally guaranteed loans to small businesses who maintain their payroll during this emergency. These loans may be forgiven if borrowers maintain their payrolls during the crisis or restore their payrolls afterward.

Am You Eligible?

You are eligible if you are:

  • A small business with fewer than 500 employees
  • A small business that otherwise meets the SSA’s size standard
  • A 501(c)(3) with fewer than 500 employees
  • An Individual who operates as a sole proprietor
  • An Individual who operates as an Independent contractor
  • An Individual who is self-employed who regularly carries on any trade or business
  • A Tribal business concern that meets the SBA size standard
  • A 501(c)(19) Veterans Organizati0n that meets the SBA size standard

In addition, some special rules may make you eligible:

  • If you are in the accommodation and food services sector (NAICS 72), the 500-employee rule is applied on a per physical location basis
  • If you are operating as a franchise or receive financial assistance from an approved Small Business Investment Company the normal affiliation rules do not apply

What Will Lenders Want to See?

In evaluating eligibility, lenders are directed to consider whether the borrower was in  operation before February 16. 2020 and had employees for whom they paid salaries and payroll taxes or paid independent contractors.

Lenders will ask you for a good faith certification that:

  1. The uncertainty of current economic conditions makes the loan request necessary to support ongoing operations
  2. The borrower will use the loan proceeds to retain workers and maintain payroll or make mortgage, lease, and utility payments
  3. Borrower does not have an application pending for a loan that duplicates the purpose and amounts applied for here
  4. From Feb. 15, 2020 to Dec. 31, 2020, the borrower has not received a loan that duplicates the purpose and amounts applied for here (Note: You may be able to fold emergency loans received since Jan. 31, 2020 into this loan)

If you are an independent contractor, sole proprietor, or self-employed individual, lenders will also be looking for certain documents, such as payroll tax filings, Forms 1099-MISC, and income and expenses from the sole proprietorship.

Please also note that lenders will NOT look for:

  • That you sought and were unable to obtain credit elsewhere
  • A personal guarantee (not required for the loan)
  • Collateral (not required for the loan)

How Much Can You Borrow?

Loans can be up to 2.5 times your average monthly payroll costs, not to exceed $10 million.  You Payroll Cost is the sum of included payroll costs less excluded payroll costs, as follows.

Included Payroll Costs for Employers: the sum of payments of any compensation with respect to employees that is a:

  • Salary, wage, commission, or similar compensation
  • Payment of a cash tip or equivalent
  • Payment for vacation, sick, or family medial leave
  • Allowance for dismissal or separation
  • Payment required for the provisions of group health care benefits, including insurance premiums
  • Payment of retirement benefits
  • Payment of state or local tax assess on the compensation of the employee

For Sole Proprietors, Independent Contractors, and Self-Employed Individuals: the sum of  payments of any compensation to, or income, that is a wage, commission, income, net earnings from self-employment, or similar compensation, and that is an amount that is not more than $100,000 in one year, as pro-rated for the covered period.

Excluded Payroll Costs:

  • Compensation of an individual employee in excess of an annual salary of $100,000, prorated for the period of Feb. 15 to June 30, 2020
  • Payroll taxes, railroad retirement taxes, and income taxes
  • Any compensation of an employee whose principal place of residence is outside the United States
  • Qualified sick leave wages for which a credit is allowed under Section 7001 of the Families First Coronavirus Response Act

Note that special rules apply for businesses not in operation for all of 2019 and for calculating average wages for seasonal employees.

Will This Loan be Forgiven?

Borrowers are eligible for loan forgiveness equal to the amount the borrower spent on the following items during the 8-week period beginning on the date of the origination of the loan.

  • Payroll costs (see above for criteria)
  • Interest on the mortgage obligation incurred in the ordinary course of business
  • Rent on a leasing agreement
  • Payments on utilities (electricity, gas, water, transportation, telephone, or internet)
  • Additional wages paid to tipped employees

The amount of the loan forgiveness will be reduces if there is a reduction in the number of employees or a reduction of greater than 25% in wages paid to employees. Staffing and wage reductions occurring in the period starting Feb. 15, 2020 and ending 30 days after the enactment of the CARES Act shall not reduce the amount of loan forgiveness IF the staffing or wage reductions are eliminated by June 30, 2020.

What are The Next Steps?

The SBA needs to identify lenders that will facilitate the program. As such, this program is not yet on the SBA’s COVID-19 Resource Center.

You can download the US Chamber of Commerce’s guide here.

We do recommend that you contact your current SBA lender, if you have one, or your business banker. Get on their call list once the program is up and running.  Your accountant and bookkeeper will need to pull financial information, so give them a heads up as well.

COVID-19 Resources for SMBs

Updated 03/30/20; Additions in italics.

As a service to our clients and to small and midsize businesses, we are collating resources to help you mitigate the economic and business impact of the COVID-19 emergency.

Some of these resources are informational, others are tools that can help you adapt your business to current conditions. This post covers the following topics and will be updated regularly.

  • Tools & Services for Remote / Virtual Work
  • Informational Webcasts
  • Emergency Financial Assistance (updated 3/3o)
  • Customer Engagement Tools
  • HIPAA Compliant Video Conferencing in G Suite
  • Free / Discounted Phone and Communication Services

Tools & Services for Remote / Virtual Work

Informational Webcasts

  • We are posting information webcasts from multiple sources in our News & Events calendar. Please check the calendar for dates and times.
    • Open Office Hours — Cumulus Global
    • COVID-19: General FAQs for Employers — Massachusetts Health Council (MHC) & Associated Industries of Massachusetts (AIM)
    • The Remote Worker: Effective Virtual Meetings – Brainstorm, a Cumulus Global partner in learning
  • NOTE: While some events may be from organizations in our area, we expect the information to be useful to all small and midsize organizations.

Emergency Financial Assistance:

  • In Massachusetts:
    • The Massachusetts Growth Capital Corporation has halted its disaster loan program to avoid conflict with the SBA Economic Injury Disaster Loan (EIDL) program (see below)
  • In ALL States:
    • With the passage of the CARES Act, additional loan programs will be available.  See this post for info on the loan/forgiveness program.
    • The U.S. Small Business Administration’s (SBA) Economic Injury Disaster Loan (EIDL) program is available to most businesses nationally.  Start here: https://disasterloan.sba.gov/ela
      • The Small Business Administration (SBA) has made an important adjustment to the terms of its Economic Injury Disaster Loan Program (EIDL). Moving forward, EIDL loans will defer payments for the first year (twelve months) of the loan.
    • The SBA launched an Express Bridge Loan Pilot Program offering emergency loans up to $25,000. Click here for information.

Customer Engagement Tools

  • Live Chat
    • Adding live chat to your website can help you facilitate sales and customer service, and can provide a role for your sales team.
    • Contact us to discuss solutions
  • Phone Services
    • Providing remote workers access to your business phone system helps facilitate customer interactions.
    • Contact us if your current phone system does not let you easily extend to employee laptops, tablets, or phones.
    • We have affordable ways to improve communications, often by augmenting your current phone services.
  • Webcast Services
    • Webcasts and video meetings and want to engage customer, employees, and other face-t0-face.
    • If you are running G Suite or Office 365, you have the ability to run video meetings and broadcasts without additional costs.
    • Contact us if you want to learn more or need assistance running a meeting.
    • We can also assist with more advanced web/video meeting services.

HIPAA Compliant Video Conferencing in G Suite

  • Hangouts Meet, the new video meeting service in G Suite can be used for HIPAA compliant video sessions
  • Hangouts named video calls are not covered by G Suite’s HIPAA Business Associate Agreement (BAA)
  • For best practices, administrators should make Meet the default for video meetings and disallow use of classic Hangouts and chat.  These settings can be limited to specific groups of users, if appropriate.
  • Contact us for assistance with these settings and/or user training.

Free/Discounted Phone and Communication Services

  • Several VoIP and online meeting providers are offering free or dramatically discounted services for up to 90 days.
  • These services can be configured to work with your existing phone services to extend access and features to employees that do not normally work remotely
  • Contact us to discuss your needs, workflows, and options.
Best Practices

Cyber Protection: Time for New Best Practices

Best PracticesAccording to a recent survey* of IT service providers, ransomware attack downtime costs 23 times more than requested ransom. The average ransom for small and midsize businesses (SMBs) victims jumped 37% to $5,900 from 2018 to 2019.  The average cost of ransomware downtime jumped from $46,800 to $141,000, and increase of more than 200%.

To add to your concerns, SMBs fall victim to cyber crime and ransomware attacks even when they have traditional antivirus, email/spam, ad/pop-up blockers, and endpoint protection in place.  67% of IT service providers report their SMB customers fall victim to phishing emails; 30% report that most customers still rely on weak passwords and access management.

Traditional cyber security solutions are no match for many cyber attackers. We need a new approach to ransomware, with business continuity at the core.

Using business continuity as a guiding principle drives new best practices for preventing and responding to cyber security attacks. With a business continuity mindset, you focus on what is needed to keep the business running, and how quickly you can “return to operations”.  When we discuss business continuity, we understand that we need to take steps to prevent disruption, mitigate the scope of potential disruptions, respond effectively when disruptions happen, and have the systems and processes in place to recover quickly.

For over a year, we have promoted and refined our CPR model:

Communicate and Educate: Involve everybody in the solution by educating your team on the risks, how to spot and report fraudulent content, and how their behavior can prevent or help an attack.

Protect and Prevent: Implement multi-layer, multi-vector protections that focuses on your people (identities), data, applications, and systems. Our data, our businesses, no longer sit comfortably hidden in a computer room behind a firewall.

Respond and Recover: No defense is perfect. Have services in solutions in place that let you recover and return to operations within a time frame that protects the health of your business. More than getting data and systems back on line, put in place the forensics, legal, public relations, and customer service resources you will likely need in a cyber attack emergency.

Time for Action

Here are 10 Actions you can initiate today to improve your cyber protection:

  1. Ensure your computing environment is protected across multiple attack vectors: Identity, Endpoints, User Data, Cloud Apps, and Infrastructure.
  2. Deploy multi-factor authentication, advanced threat protection, next-gen endpoint protection, and DNS/web protection across your ecosystem for a comprehensive baseline or protection.
  3. Encrypt your data at rest and in transit.
  4. Educate your team on the risk and how their actions can impact the business.
  5. Actively manage your cloud and “as-a-Service” subscriptions, standardize on-boarding and off-boarding of staff and contractors based on role, application needs, and appropriate access to data.
  6. Understand how your team uses your business and unauthorized (“shadow IT”) applications and services.  Reign in shadow IT by ensuring your business systems provide staff with the necessary capabilities.
  7. Test your staff’s behavior related to cyber attacks and follow up with additional coaching and guidance. Discipline and, if needed, terminate those who are unwilling or unable to adapt to the current realities of behavior and risk.
  8. Upgrade from data backup/recovery to a business continuity solution that will get you up and running in minutes or hours, instead of days, should an attack get past your defenses.
  9. Arrange in advance for the legal, forensic, PR, communications, and customer service resources you need to respond to an attack with a potential or actual data breach.  Prepaid breach response services give you nearly instant access, reducing your risks and liability while bundling in baseline cyber insurance coverage.
  10. Get cyber insurance, either a baseline policy bundled with Breach Response services and/or a fully underwritten policy from your business insurance provider.

Please contact us for more information about your cyber protection, available assessments, and solutions. We are happy to schedule a free, no obligation Cloud Advisor Session.

* Global State of the Channel Ransomware Report. Datto, Inc. Oct. 2019.


 

Feb 16, 2018

Cumulus Global Sponsorship of Economic Forecast Forum Helps Area Businesses Adapt to Changing Economic Conditions

Click to RegisterSmall and midsize businesses in central Massachusetts face new challenges as new tax codes, low unemployment, changing regulations, shifting trade agreements, and inflationary risks impact the regional economy in unpredictable ways. The economy is changing and businesses need to adapt and transform to survive and grow.

Cumulus Global, an award-winning managed cloud service provider based in Westborough, MA, is proud to co-sponsor the Worcester Business Journal’s annual Economic Forecast Forum on February 16, 2018 at the Beechwood Hotel in Worcester, MA.

“With a sound understanding how national, regional, and local issues effect the business climate, area SMB’s are better prepared to thrive and grow,” stated Allen Falcon, CEO of Cumulus Global.

As a supporting sponsor, Cumulus Global is helping empower owners and leaders to make timely, effective decisions. Forum attendees will hear from Jeffrey C. Fuhrer, Executive Vice President & Senior Policy Advisor at the Federal Reserve Bank of Boston, along with a panelist of area business and government leaders. Cumulus Global will be on hand to discuss the changing role of technology how businesses can draw more value from existing IT systems and new cloud services.

3 IT Shifts for Small Business: Mobile-Social

Shifter
The nature of computing and how it’s used by business is changing – rapidly.  You have heard the buzzwords … mobile, social, cloud, big data, analytics, and others.  You probably have thought about your own business and thought the these changes are just for the enterprise.

Three major shifts in technology, however, can and will impact your organization:  Data; Cloud; and Mobile-Social.

Shift 3: Mobile-Social

Why do we combine Mobile and Social? Social would not exist without Mobile.  Before the mobile revolution, social was limited to “Other who viewed this also viewed …” cues like those on Amazon.com. Social works because it is quick, easy, convenient, and immediate.

And while mobile technology lets us stay connected to the office and provides us access to information, the real transformation with mobile and social technologies is engagement.

Engagement, driven by mobile and social technologies, lets you build trust and establish value. And, if done properly, lets you build trust and value in a secure manner.

Mobile-Social lets you expand the nature of your engagement. You can easily move beyond 1:1 conversations with your customers. The #hashtag and the @mention let you “listen in” on the conversations you customers are having with their friends, and can give you the opportunity to join the conversation.

While there are examples of social media posts going viral and shaming companies into better behavior. The real opportunity lies with this type of communication:

“We saw you post about X. We were not aware of this issue and will fix it quickly. A customer rep will call you shortly to assist you directly.”

And via communications like this:

“Thank you for mentioning your great experience with our service. We are sending you a small token or our appreciation for your business and support.”

Most small business, like yours and ours, could never afford the infrastructure necessary to facilitate, monitor, and act on social media interactions.  Cloud-based services, however, have the horsepower and economy of scale to enable us to leverage social-mobile technologies. And, make it possible to integrate our social-mobile applications with our operational and line of business systems.

 

3 IT Shifts for Small Business: Cloud

Shifter
The nature of computing and how it’s used by business is changing – rapidly.  You have heard the buzzwords … mobile, social, cloud, big data, analytics, and others.  You probably have thought about your own business and thought the these changes are just for the enterprise.

Three major shifts in technology, however, can and will impact your organization:  Data; Cloud; and Mobile-Social.

Shift 2: Cloud

Not everything labeled “cloud” is actually “cloud computing”.  For our purposes, that’s okay.  Whether meeting the strict definition of cloud computing or a hosted service, the cloud is transformational.

Virtualization, one of the underlying mechanisms of building cloud services, is the entry point for most businesses doing it themselves.  Virtualization, however, is only the baseline.

The real power of the cloud is that IT and business processes transform into digital services.

Filing an auto insurance claim, for example, used to be a time-consuming process with paper forms, phone calls, visits to repair shops, and meeting with adjusters.  Today, filing a claim is digital service available to the policy holder by mobile app that instantly puts the information in the hands of the broker, adjuster, and back-office.

Cloud technology has the power to transform business models. Small businesses are less limited by geography than any other time in human history. Scalable, affordable resources empower companies to experiment and development without prohibitive capital investment. The pace of innovation accelerates and time to market drops.

While some small businesses may deliver cloud-based solutions to customers, for your business, the impact on the customer may be indirect. Better relationship management and systems enhance the way we sell. Better support systems scale with our customer base, enable self-help, and improve communications. Even simple abilities, like secure calendar sharing, make it easier for your customers to make appointments to speak with you and your team.

The cloud makes it easier for us to select specific applications and services. And we can integrate these applications and services into a single computing ecosystem without huge investments in middleware, custom programming, and infrastructure.

Where you start with the cloud depends on how you want your business to evolve. We recommend beginning with a platform that enables communications and collaborations, and can serve as the integration point for CRM, ERP, and other applications, as well as line of business systems.