As we continue to wade through the COVID-19 epidemic, many of our clubs in the Southwest are going to be needing financial assistance to continue operations.   

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed by Congress and signed by President Trump on March 27, enables golf businesses to obtain relief for disruption to business operations. 

While there isn’t enough room in this column to cover all assistance, two Small Business Administration (SBA) programs stand out for eligible facilities: 

SBA 7(a) Paycheck Protection Program (PPP)

The maximum loan amount from PPP through June 2020 is $10 million and is based on a formula tied to average total monthly payroll costs for a specified period. Up to eight weeks of payroll and other costs will be forgiven if the business retains its employees and their salary levels. Principal and interest are deferred for up to a year and all borrower fees are waived.

Loans are retroactive to February 15 and the bill allows for rehired employees to be included in the loan forgiveness reduction if they are rehired by June 30, 2020.

Costs which are defined as “payroll costs,” and which are therefore eligible for forgiveness, include compensation, healthcare benefits, paid sick and family leave, severance, mortgage interest, rent, and utility payments, among other items. Uses of the loan not eligible for forgiveness include employee compensation above $100,000 and payroll taxes.

The loans will be made through the SBA’s network of 7(a) lenders and will be open through June 30, 2020. This program can also be used in coordination with other COVID-19 financing assistance measures established under the CARES Act or any other existing SBA loan program.

Eligible firms for PPP include small business concerns, as well as businesses with 500 employees or less, veterans, and 501(c)(3) non-profit organizations meeting certain SBA standards.

More info on PPP.

SBA Disaster Assistance Loans

SBA’s Economic Injury Disaster Loans (EIDL) offer up to $2 million in assistance with an interest rate of 3.75% for small businesses and 2.75% for non-profits. The loans may be used to pay for expenses that could have been met had the disaster not occurred, including payroll and other operating expenses.

The CARES Act included $10 billion in funding to expand the EIDL program. This includes a provision allowing an advance grant of up to $10,000 to small businesses and nonprofits within three days of applying for an EIDL loan. The advance EIDL grant does not need to be repaid, even if the grantee is subsequently denied an EIDL, and may be used to provide paid sick leave to employees, maintain payroll, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent, and mortgage payments.

Eligible firms include small business concerns as well as the following businesses with 500 or fewer employees: tribal businesses, sole proprietorships, and independent contractors. Additionally, most private non-profits of any size are eligible.

A business that receives an EIDL by June 30, 2020 as a result of a COVID-19 disaster declaration is eligible to apply for a PPP loan or may refinance their EIDL into a PPP loan. In either case, the emergency EIDL grant award of up to $10,000 would be subtracted from the amount forgiven in the PPP.

More info on EIDL.

Thanks for your support of GCSAA during this time of crisis. If you need any assistance, please feel free to reach out to me or a member of the GCSAA staff. Stay safe and be careful out there!