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COVID-19 Update for April 24: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, April 24, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.

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Insights  <  COVID-19 Update for April 24: Here’s What Massachusetts Businesses Need to Know

As the news surrounding the global COVID-19 pandemic continues to evolve, our team at blumshapiro is staying focused on answering the local business community’s most pressing questions. As of Friday, April 24, 2020, here are the latest updates leaders in Massachusetts’s business community need to know.

The Latest News 

CARES Act 2.0 on its way

On Tuesday the Senate passed a $484 billion bill with the main goal of injecting more funding ($320 billion) into the Paycheck Protection Program, with $60 billion of that being set aside for smaller banks to reach the smallest and minority-owned businesses, particularly in underserved communities and rural areas.  Additional earmarked aid includes $75 billion to help overwhelmed hospitals (with a significant portion aimed at those in rural areas), $25 billion for expanded coronavirus testing (including $18 billion for states, localities, territories and tribes), $60 billion to replenish the SBA’s Economic Injury Disaster Loan (EIDL) program (which also ran out of funding; expansion of the program would make farms and ranches now eligible), $1 billion to the Centers for Disease Control and Prevention, and $1.8 billion for the National Institutes of Health, with up to $1 billion of that covering the costs of testing for the uninsured.  Among the issues left out of negotiations was an increase in funding for state and local governments. While Senate Majority Leader Mitch McConnell (R-Ky.) opposes the funding, the president and Treasury Secretary Steven Mnuchin have indicated their support for its inclusion in the fifth coronavirus-related package. The House passed the bill late Thursday, and it was expected President Trump would sign it quickly.

Paycheck Protection Program update

A review of the initial round of the Paycheck Protection Program showed the $349 billion was allocated over 1.66 million loans approved through 4,975 lenders, according to the Small Business Association.  California was first both in number of approved loans (112,967) and value of loans ($33.4 billion).  Texas (134,737/$28.5 billion), New York (81,075/$20.3 billion), Florida (88,997/$17.9 billion) and Illinois (69,893/$16.0 billion) rounded out the top five.  Almost 75% of the approved loans were for $150,000 or less, and 88% were less than $350,000.  The construction industry received the most funding at 13% of the total, followed by professional, scientific, and technical services companies (12.7%), manufacturing (12%), and healthcare and social assistance companies (11.7%).  Additionally, we are expecting additional guidance regarding PPP loan forgiveness, and will provide an update as soon as it’s released.

Massachusetts’ businesses received $10.4 billion of the funding spread across 47,000 small businesses, ranking ninth nationally in both number of businesses awarded and the amount awarded.

Update on Main Street New Lending Program 

The Federal Reserve is currently working to create the infrastructure for a Main Street Lending Program to support lending to small and medium-sized businesses that were in good financial standing before the onset of the COVID-19 pandemic.  The program will operate through two facilities:  the Main Street New Loan Facility (MSNLF) and the Main Street Expanded Loan Facility (MSELF). We’ll continue to update you as the program becomes available.

Massachusetts News

Regional approach to reopening the economy 

Governor Baker has appointed three people from his administration to serve on a multi-state council that will coordinate a regional approach to reopening the economy.  This comes after Massachusetts last week joined New York, New Jersey, Connecticut, Rhode Island, Delaware, and Pennsylvania.  Additionally, the governor stated he’s looking for 14 days of steady declines in positive coronavirus tests before the state reopens.

Governor Baker has also expressed interest in speaking with members of the business community as he considers reopening the economy.

Unemployment for gig workers comes 10 days early in Mass.

On Monday, the state began accepting online applications for unemployment benefits for those who are self-employed, independent contractors, freelancers, or “gig” workers, 10 days sooner than originally expected.  The funding comes from the Pandemic Unemployment Assistance program, which was part of the March 27 CARES Act.

Baker signs housing security bill, pausing evictions and foreclosures

Governor Baker signed a housing security bill on Monday after the state legislature passed the bill the previous Friday.  The bill pauses evictions and foreclosures for 120 days, or 45 days after the Governor lifts the state of emergency.  Tenants and homeowners are still expected to pay their rents and mortgages, but protects them from late penalties if they demonstrate their inability to pay is due to a hardship caused by the pandemic.  The bill also prohibits non-emergency evictions of small businesses.

Update on remote notarization 

After an initial attempt to get a remote notarization bill passed failed when it was attached to, and subsequently stripped from, a larger municipal aid bill, a second effort at a remote notarization bill has gained momentum, passing the state Senate and House and then sent to the Governor Thursday night.  Over 40 states already allow for some kind of remote notarization; currently, Massachusetts is the only state in New England that does not.

Department of Revenue issues emergency regulations on telecommuting 

On Tuesday, the DOR issued an emergency regulation that lays out rules that apply to income earned by a non-resident employee who telecommutes for an in-state business due to the COVID-19 state of emergency.  The emergency regulation is effective from March 10 and will end when the state of emergency is no longer in effect.

Schools closed for remainder of 2019-2020 school year 

Also on Tuesday, Governor Baker announced that all public and private schools will be closed through the rest of the academic year.  Day care centers, except for those serving the children of essential employees, will remain closed through the end of June.

Senators proposing $500 billion state and local government rescue 

Democratic Senator Bob Menendez of New Jersey and Republican Senator Bill Cassidy of Louisiana are proposing a $500 billion fund to benefit state and local governments hardest hit by the COVID-19 pandemic.  According to their plan, the money would be distributed based on population, infection rate, and revenue loss.

Massachusetts unemployment claims update

Weekly initial claims in Massachusetts during the coronavirus era peaked at 181,423 between March 22 and March 28. New Massachusetts claims over the past five weeks alone represent more than 17 percent of the state’s labor force. In the midst of five straight weeks of surging unemployment claims, Governor Baker asked the federal government for a $1.2 billion loan to help Massachusetts meet unprecedented needs and ensure that people do not suffer through payless paydays.

Industry News

Education

Education Secretary Betsy DeVos released $6.2 billion of the $14 billion higher education package to colleges that have undertaken rapid changes as a result of the coronavirus pandemic.

While the full impact of the coronavirus pandemic has yet to be realized, some college presidents are optimistic, suggesting that positive change could be the result of all of the adjustments made.

Meanwhile, other colleges are not sure what to expect come fall, with many students choosing to defer their enrollment or even transfer to a closer school.

Healthcare

$7.2 billion in contracts have been awarded by the federal government so far in the fight against the coronavirus, including to Massachusetts biotech firm Moderna, which has been promised more than $400 million to support its development and testing of a COVID-19 vaccine now in an initial clinical trial.

On Wednesday, Governor Baker announced a new partnership between Quest Diagnostics, a private lab, and the Massachusetts League of Community Health Centers, focused on “areas of high need,” including densely populated urban areas.  Quest plans to send 2,200 tests per day to 12 community health centers with the capacity to increase testing, including in Quincy, Brockton, Lowell, Fall River, New Bedford, Worcester, Provincetown, and multiple sites in Boston.

Manufacturing 

Safety, communication, and risk management are three main areas manufacturing businesses should focus on to navigate through this unprecedented time.

Insurance 

Mass Mutual is launching HealthBridge program, which offers free life insurance to healthcare workers across Massachusetts and Connecticut.

Nonprofit Organizations

Legislation that would create a $75 million emergency relief fund for nonprofit cultural organizations was introduced earlier this week before the Tourism, Arts and Cultural Development Committee.  We’ll continue to follow the progress of this bill.

Restaurants and Hospitality 

Earlier this week, the National Restaurant Association wrote a letter to Congress updating them on the devastating impact the coronavirus pandemic is having on the restaurant industry.  As the nation’s second-largest private-sector employer, the association estimates the industry will lose $80 billion in sales and 8 million jobs, more than any other industry.  Given the scale, the association is requesting a restaurant relief and recovery program.

Additionally, plans are beginning to be discussed surrounding when and how to reopen sit-down restaurants.

Also, a survey conducted by the Massachusetts Restaurant Association found that 80% of the state’s restaurants have closed at least temporarily during the crisis.  Some initially tried offering only take-out before deciding to close completely.

Technology 

According to a recent survey conducted by the Mass Technology Leadership Council of more than 30 of the top tech executives, one-third said their organizations are hiring during this time, and only one-fifth are considering or implementing layoffs.  The group also forecasted a stronger reliance on remote work moving forward.

Available Resources for Massachusetts Businesses

How You Can Help

The community-minded response of Massachusetts’ business community has been nothing short of extraordinary. There are plenty of ways to contribute to the statewide effort to navigate this crisis.  Here are few:

Future Updates and Additional Resources

We will be providing regular updates over the next several weeks as new developments are made available.  If you have any questions whatsoever, please do not hesitate to reach out.  We are here to help you with your tax and business advisory needs.

In the meantime, you can refer to the following state agencies and associations for the latest information:

And a Last Good Word…

We all need some good news right now – here’s some from this week:

Polar Seltzer is giving away $2,500 a day to restaurant workers who use Instagram to list the best item on their menus.  As part of the #PolarTips campaign, a $500 tip is given to five people in the restaurant industry who participate daily – servers, chefs, hosts, dishwashers, bartenders, or anyone else in the business.  Now that’s a nice tip!

Based in Boston and founded by best friends and naval architects John Wise and Wombi Rose, Lovepop creates beautiful laser-cut pop-up cards designed on ship-building software and handcrafted in the ancient art form of kirigami.  According to their website, Lovepop is on a mission to create one billion magical moments by making it easy to do something creative and meaningful for the people you love.  But in an effort to answer the call for desperately needed PPE, the founders decided to utilize their expertise and that of their colleagues, pivoting their production toward a goal of making 40,000 face shields daily.  By doing so, they’re ensuring countless more magical moments for so many.

 

COVID-19 Business Resources

Disclaimer:  The contents of this resource are for general informational purposes only.  While every effort has been made to ensure its accuracy, the information is provided “as is” and no representations are made that the content is error-free.  We have no obligation to update any content, comments or other information for retroactive or prospective interpretations or guidance provided by regulators, financial institutions or others.  The information is not intended to constitute legal advice or replace the advice of a qualified professional.  There are areas of the CARES Act where additional clarification from the Treasury Department and the SBA is needed.  Your judgment and interpretation of the act may be needed.  Users should consult with their legal counsel and representatives of the lending institution regarding the proper completion of their application and supporting documentation.

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