ECONOMIC RELIEF FROM THE EFFECTS OF COVID-19 FOR MARYLAND BUSINESSES
Governor Larry Hogan of the State of Maryland enacted an emergency order on March 19, 2020 mandating the closure of all non-essential businesses in the state. In doing so, all employers, whether essential or not, are encouraged to promote work-from-home for their employees. Inevitably, these actions will have drastic effects on the local economy. In order to help small businesses mitigate the impacts of these orders and COVID-19, the State of Maryland has introduced several new relief programs.
Maryland Small Business Emergency Relief Loan Fund:
For-profit businesses are eligible for non-recourse loans up to $50,000 (not to exceed three months of operating expenses) to businesses impacted by COVID-19 with fewer than 50 employees. Payback is over three years, with no interest for the first 12 months, and 2% interest for the remaining two years. Businesses must be in good standing and have W2 employees on payroll. Eligible uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations. To be eligible, businesses must demonstrate either financial stress or disrupted operations, including, but not limited to, notices from tenants closing operations and not paying rent, notice of inability to pay rent or make loan payments due to reduced sales or suspended operations, increased cost of COVID-19 prevention measures, notice of a disrupted supply network, or other circumstances which may be addressed on a case-by-case basis.
Maryland Small Business Emergency Relief Grant Fund:
Grants up to $10,000 (not to exceed three months of cash operating expenses) for businesses including non-profits impacted by COVID-19 with 50 or fewer employees. Businesses must be in good standing and have W2 employees on payroll. Annual revenues cannot exceed $5,000,000. The grant is intended to be used while the business applies for longer-term funding through the bank, SBA, or other source. Eligible uses include working capital to support payroll expenses, rent, mortgage payments, utility expenses, or other similar expenses that occur in the ordinary course of operations. To be eligible, businesses must demonstrate either financial stress or disrupted operations, including, but not limited to, notices from tenants closing operations and not paying rent, notice of inability to pay rent or make loan payments due to reduced sales or suspended operations, increased cost of COVID-19 prevention measures, notice of a disrupted supply network, or other circumstances which may be addressed on a case-by-case basis.
Maryland Layoff Aversion Fund:
The Layoff Aversion Fund provides grants of up to $50,000 per applicant to prevent or minimize the duration of unemployment. The funds are intended to be used to cover the cost of purchasing equipment and software for remote access, sanitizing facilities that are permitted to remain open, paying for liability insurance for restaurants to convert to delivery, providing funds for professional development to avoid employee layoffs, and for other strategies designed to reduce or eliminate the need for layoffs in the small business community. The Layoff Aversion Fund is not to be used for rent or employee wages, unless approved for participation in Maryland’s Unemployment Insurance Work Sharing program. To be eligible, businesses must demonstrate the need for layoff aversion funds.
Maryland Emergency Relief Manufacturing Fund:
The State of Maryland intends to introduce an incentive plan for manufacturers capable of producing personal protective equipment. More details are expected by Friday, March 27, 2020.
Extension of Annual Report Deadline:
The Annual Report and/or Personal Property Return filing deadline for entities registered with the Maryland Department of Assessments and Taxation is extended from April 15 to July 15. To file your 2020 Report, please visit the Maryland Business Express here. If you would like to confirm whether your Report for 2019 (or any other prior year) was filed, you can check your entity’s status here.
SBA Disaster Assistance Loans:
The State of Maryland is designated for SBA assistance. Businesses may apply for Disaster Assistance Loans either through their preferred bank or directly with the SBA.
Additional guidance for businesses and employees, including guidance on compliance with the Families First Coronavirus Response Act and is available on the Offit Kurman COVID-19 Resource Center.
ABOUT JORDAN SAVITZ
As a member of Offit Kurman’s Business Law and Transactions practice group, Jordan Savitz advises clients in all stages of the business life cycle. He assists clients with matters including, but not limited to, choice of entity, complex operating and stockholder agreements, compliance with Rule 506 of Regulation D, real estate leasing, employment agreements, website terms and conditions, trademark filings, complex contract drafting and negotiation, succession planning, as well as stock and asset purchase agreements.
ABOUT OFFIT KURMAN
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