$2 Trillion U.S Stimulus Set to Help VRM's, STR Cleaners, Home Owners and Airbnb Hosts
Finally some good news for the vacation rental industry. An unprecedented $2 Trillion stimulus bill has been passed by the Senate and House, and is on it's way to the president to sign off on today.
What happens in Washington is often lost on the rest of the country. But this rescue package is the largest in American history, and has the potential to help individuals and small businesses - not just too-big-to-fail corporations. This bill will be able to help VRMs, employees, cleaners, and Airbnb Hosts. This article explains exactly what to expect, and how VRMs, cleaners, employees, and self-employed hosts can take advantage.
Free Money for VRM's with W-2 Employees
High Level Summary: All businesses with W-2 employees will be eligible for a one-time grant of 250% of one month's Payroll. If the money is used to retain at least 90% of employees, then the money will be completely forgiven and won't be paid back. If it's not used to retain employees, then the amount will turn into a loan with 4-5% interest in one year.
High Level Details
"Loan" Amount = 250% of One Month's Payroll
"Loan" will be 100% forgiven IF you do not lay off more than 10% of your employees from February 15th, 2020 through June 30, 2020.
This proposal would be retroactive to February 15, 2020 to help bring workers who may have already been laid off back onto payrolls
Unlike traditional SBA loans, There will be NO SBA fees and NO personal guarantees on these loan
There is the ability to re-hire employees who have been laid off
Loans will be facilitated through the existing SBA partner banks
Additionally, you may be able to qualify for an SBA Disaster Loan
Since this isn't written into law yet, these are tentative details only. More to come.
Here are the full details of what is expected to pass
Caution: It may take a long time for small businesses to get these loans. It can take several weeks to several months, says Ami Kassar, CEO of Multifunding, a small business loan advisor. That’s why the bill also includes $10 billion in emergency grants of up to $10,000 to provide immediate relief for small-business operating costs.
How to be proactive on this: There are expected to be long lines for the grants/loans mentioned in this post. I would recommend contacting your bank ASAP to get the SBA lender contact's info and express your interest in the Paycheck Protection Program. Have everything you need ready for when the application process opens (likely next week). The existing SBA infrastructure will most likely not be able to handle the initial demand of these grants/loans, so make sure to get ahead of the masses of businesses applying!
Additionally, start planning for creative ways to utilize your employees while they are on payroll. Now is a great time for continued education, maintenance on houses and online training. For example, it will be a great time to fix and automate your accounting system to save $1,000's in the future. 😉
Expanded Unemployment Benefits for Freelance Airbnb Hosts, Cleaners, and Part-Time Workers
$260 billion of the Stimulus bill is set to be dedicated to emergency unemployment insurance. This emergency funds will cover part-time, self-employed, gig economy workers. Weekly benefit increase of $600 for four months. It includes extra 13 weeks of coverage for people who have exhausted existing benefits.
Applicants should check with their state’s department of labor, as well as the U.S. Department of Labor for more information at the federal level. To apply for these expanded unemployment benefits once the stimulus bill is passed, people will need to visit their state’s unemployment website. The information you will need includes your Social Security number, your driver’s license or state ID, and Social Security numbers of any dependents you are claiming.
How to be proactive on this: The exact details of how this will be written into law and administered by each state aren't 100% clear yet, but the fact this bill is set to covered part-time, self-employed and gig economy workers is a big win. We will be following the topic like a hawk so subscribe below for more updates on how you and/or people in your business can take advantage.
Mortgage Pauses for Selected Home Loans
According to Fortune, here is how some home owners will be able to get relief during the coronavirus.
"Borrowers with loans insured by government agencies such as the Federal Housing Administration and the Department of Veterans Affairs would be eligible for forbearance. Consumers whose mortgages are backed by Fannie Mae and Freddie Mac would also be eligible to skip payments. U.S. regulators have already mandated forbearance to borrowers facing financial hardships due to coronavirus, in addition to suspending foreclosures and evictions through the end of April and in some cases longer. Under the Senate bill, borrowers would be eligible for 60 days of forbearance if they can demonstrate virus-related financial stress. The relief can be extended for 30 days up to four times. Mortgage servicers, who collect homeowners’ monthly payments, couldn’t demand documentation proving economic hardship. Instead, borrowers would just have to attest that they’re struggling, according to the text of the legislation." - Fortune
One-Time Payments For All U.S Adults
The stimulus bill includes one-time payments of $1,200 per adult, $2,400 per couple, $500 per child. Amounts begin phasing out for individuals who earn more than $75,000 on their last tax returns and at, $150,000 per couple.
According to initial reports those income numbers will be based on 2019 tax returns if you have filed one by the time checks go out. Otherwise if you haven’t yet filed for 2019, the 2018 tax return would be used (Final details haven't been confirmed yet). Benefit checks will be sent to the address listed on your tax return.
How to be proactive on this: Send this article to people you work with that may not have at least filed their 2018 taxes. That's critical in order to receive one of these checks. Additionally, if the address is outdated on your most recent tax return, make sure to update that with the IRS, ASAP! Your cleaners, employees, and family would appreciate receiving a friendly reminder about this so that they receive the stimulus check.
SBA EIDL Emergency Loan
If you've filed a 1099 for a cleaner for your business you may be eligible for a low interest disaster loan starting at $10,000. Here is the link to apply. Note: These funds are limited and the SBA systems are already being overwhelmed with server errors.
Thanks for reading. Feel free to share this post with your team or comment below. We will following this stimulus like a hawk and sending out the information in the coming days.