As of April 16,2020, twenty- two million Americans are out of work and have applied for unemployment benefits. The Coronavirus crisis has hit many industries hard: restaurants, bars, airlines, hospitality, live music, sports, movie theaters. Stay at home orders and the closure of non-essential businesses have taken an enormous toll on our economy with the goal of "flattening the curve" and preventing additional deaths from COVID-19. If you have been struggling financially because of the Coronavirus crisis, there are a number of ways both the federal government and the New York State government have sought to provide relief. Read More...

Over 1 million small businesses across the U.S have been significantly negatively affected by the Coronavirus Crisis. This economic devastation is particular severe locally in the New York City area with its high number of diverse small business. From restaurants, to small shop owners, to startup businesses, the economic pain is being felt throughout the region. The economic consequences of the Coronavirus pandemic are hitting small businesses especially hard as customers practice social distancing and states require what are deemed to be non-essential businesses to remain closed. This is causing an economic domino effect as businesses are forced to then lay off workers and also effects vendors that these businesses normally do business with. In addition to the immediate public health crisis, many economists expect the COVID-19 pandemic to lead to a recession that could further impact many small businesses. Read More...

Due to threat of COVID-19 to public health, Governor Andrew Cuomo said he is placing New York State on "PAUSE,” which stands for Policies Assure Uniform Safety for Everyone. According to the governor, while in effect, 100 percent of all non-essential workers must stay at home, and all non-essential businesses must close. This is approximated to be 75 percent of the workforce in New York. This very drastic measure is intended to prevent COVID-19 from overwhelming the state's health care system and “flatten the curve”. This executive order has had a massive negative effect on New York’s economy and led to dire financial consequences for many New Yorkers.

The order contains even more stringent rules are for New Yorkers who are age 70 or older. They must wear masks in the presence of others, check the temperatures of any essential visitors or aides, and they must remain at home except for solitary exercise. All other contact is prohibited.

The order contains the following restrictions:

• All non-essential gatherings are prohibited.
• New Yorkers must remain 6-feet from one another when leaving their homes to get essentials like food and medicine.
• Sick New Yorkers should remain at home unless they need urgent medical attention.
• Only solitary exercise is permissible.

The Governor announced that these rules would be enforced. He stated that there would be a civil fine and mandatory closure for businesses in violation of the order, but he declined to mention penalties for individuals. The New York State PAUSE order took effect 8 p.m. on Sunday, March 22, 2020 and has recently been extended to, at least, April 29, 2020. While some New Yorkers will be able to continue working from home, the mandatory closure of “non-essential” businesses are unfortunately causing grave financial harm to many residents and local, small businesses.

Congress passed three bills to provide for COVID-19 relief. The first bill provided $8.3 billion in emergency funds to ensure federal agencies, states and localities have the resources to respond to the COVID-19 health crisis. Congress passed the second relief bill, the Families First Coronavirus Response Act, which allows for the following:

• Paid sick leave and paid family and medical leave for Americans impacted by this virus with a tax credit for the employers’ portion of the Old-Age, Survivors, and Disability Insurance (OASDI) component of payroll taxes to help companies afford cost of the paid leave. The bill provides for 2 weeks of paid sick leave if are unable to work because you are subject to quarantine or are experiencing symptoms of COVID–19 or if you are caring for a family member that is impacted. Plus, it gives 12 weeks paid sick leave if you are caring for a child while their school is closed. This paid sick leave applies to Americans who work have been employed for at least 30 days and work for either a small- or mid-sized company, or for the government;
  
  
• Free coronavirus testing for all Americans regardless of health insurance status. Please note, this does not cover the cost of treatment only the cost of the test;
  
  
• $140 billion to boost funding for unemployment insurance and nutrition assistance for children, seniors, and low-income families;
  
  
• Allocates a large amount of money for New York, including more than $6 billion for the state's Medicaid program, additional $1 billion for New Yorkers' unemployment benefits and $15 million for senior meal assistance.

The following is an outline of the third bill, a $2 trillion economic relief package called The Coronavirus Aid, Relief, and Economic Security Act or “CARES” Act:

• Direct payments to individuals - the stimulus legislation provides for a direct payment to lower and middle-income Americans of $1,200 for each adult, plus $500 for each child in the household. The payments start to phase out at the $75k income level and would be cut off at the $99k level. These income amounts would double for married couples. Individuals will use the income listed in their 2019 tax returns to qualify, or the income in their 2018 return, if they have not filed their 2019 return yet. If the Internal Revenue Service already has an individual’s bank account information, it would transfer the money to their bank account via direct deposit. These payments have started to go out to eligible recipients. Individuals on fixed income such as social security will also be entitled to these benefits.
• Expansion of unemployment benefits - The legislation extends unemployment insurance an additional 13 weeks to a maximum of 39 weeks. In New York, unemployment benefits are covered for 26 weeks, so New Yorkers would get benefits for the maximum under the Act, 39 weeks. Regular unemployment benefits will be boosted by an additional $600 weekly. The maximum benefit here in New York is now $504, so the maximum benefit that New Yorkers could see under this legislation is $1104 a week. Eligibility for unemployment insurance would also be expanded to cover more workers, such as freelance independent contractors, gig workers and the self-employed. However, due to the enormous number of claims being filed and unemployment departments being overwhelmed, many Americans who need to file unemployment claims, still have not been able to do so.
• Student loan relief – While President Trump had announced previously that interest on federal student loans would be temporarily suspended, the relief package defers all federal student loans until November 2020. This relief is not automatic and student loan borrowers should contact their servicer to request to defer their payments. Borrowers with private student loans who are unable to make their payments should also contact their servicers to see if they are any options for them.
• Relief for companies - the relief package allocates $500 billion that will be used to guarantee loans and assistance to large companies, including $50 billion for loans to U.S. airlines. The bill provides a tax credit for companies who retain employees even if they have been mandated to close or seen a significant drop-off revenue.
• Relief for small business - The bill would also give $350 billion to aid small businesses. Loans can be used for payroll, paid sick, medical, or family leave, health care benefits, mortgage payments and rent, utilities, and other debt. No collateral or personal guarantee would be required. Loans are potentially eligible for forgiveness. Additional information on the various lending programs follows.

The aid to small business funded by the CARES Act will be handled by the U.S. Small Business Administration (SBA) however some of the loans will be processed by SBA-approved lenders and not directly by the SBA itself. There are three different loan programs that small businesses may want to consider if they have been impacted by Coronavirus.

The Paycheck Protection Program (PPP) provides loans designed to provide a direct incentive for small businesses to keep their workers on the payroll. The program is intended to help small businesses (fewer than 500 employees) by lending them up to two months of payroll costs, with each loan capped at $10 million. No collateral or personal guarantees are required for PPP loans. Sole proprietors, independent contractors, and self-employed persons may also qualify for these loans. The PPP loan will be forgiven if all employees are kept on the payroll for eight weeks and at least 75% of the loan amount is used for payroll. The other 25% can be used for certain other expenses, such as rent, mortgage interest, utilities or employer covered health benefits. Forgiveness is based on the employer maintaining or quickly rehiring employees and maintaining salary levels and the amount of forgiveness will be reduced if the number of full-time employees declines, or if wages decrease. The loan portion not forgiven will have a maturity period of 2 years and an interest rate of 1%. Under the program, neither the government nor lenders will charge small businesses any fees. The SBA recommends contacting your local lender to see if they are participating in the program. These loans are made by banks, credit unions and other regulated lenders that have been approved by the SBA. Please note that PPP loan may not be well suited for businesses, such as bars and restaurants, that do not know they will be able to return to normal operations. The Paycheck Protection Program will be available through June 30, 2020.

Unfortunately, the rollout of the PPP has been fraught with problems and now the program is likely to run out of money soon unless Congress authorizes additional fudding which is presently being negotiated. Considering their great need and attractive terms, there has been a mad rush to submit applications and because of that, the portals of some lender websites could not handle the volume and would crash. It is now recommended that businesses submit their applications off hours. Over 725,000 loans have been approved as of April 11, 2020, however it is not clear whether business have received the money they requested. Some business report that they have received much less than the amount needed to get through the crisis. Other businesses are in limbo and are still waiting for a response on their application. Making it more frustrating for small business owners, it is that it is difficult to obtain the status of an application. Compounding the problem with obtaining these loans, many lenders restricted the application to current customers and even with that, the customer needed an existing loan with the lender. However, recently, some non-traditional lending institutions, such as PayPal, Cabbage and other non-conventional lenders have been approved by the SBA and are now accepting loan requests. Businesses have reported that these companies have been able to process the loans faster than traditional banks.

PPP Information: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program-ppp

SBA Economic Injury Disaster Loans (EIDL) are offered through an existing program with the SBA. They are intended to help provide the necessary working capital for small businesses to financially survive until normal operations resume after a disaster (such as the Coronavirus crisis). EIDL assistance is available only to small businesses when SBA determines they are unable to obtain credit elsewhere. Traditionally, EIDLs can provide up to $2 million to help meet financial obligations and operating expenses that could have been met had the disaster not occurred. The SBA states that the loan amount will be based on the actual economic injury and the company's financial needs. The interest rate on EIDLs will not exceed 4 percent per year. The term of these loans will not exceed 30 years. The repayment term will be determined by the company’s ability to repay the loan. The loans are made directly by the SBA through their website.

Applicants for EIDL can request a $10,000 advance on their loan in form of a grant which does not need to be paid back. EIDL advances funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. According to the New York Times, more than 400 applicants have reported to them that this has not happened, and we suspect that there are many more businesses in this same situation.

In the face of the pandemic, the loan program has been overwhelmed by requests. Many applicants have waited weeks for approval, with little to no information about the status of their applications. Some businesses have reported that they are being told that they will receive only a fraction of what they requested. The EIDL program is supposed to offer loans of up to $2 million, but according to the New York Times, many recent applicants said the SBA help line had told them that loans would be capped at $15,000 per borrower, only $5,000 more than the advance amount.

EIDL Program Information: https://disasterloan.sba.gov/ela/

EIDL Advances Information: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/economic-injury-disaster-loan-emergency-advance

The Express Bridge Loan Pilot Program (EBL) is a recent program from the SBA that allows small businesses who have an existing business relationship with an SBA-approved lender to access up to $25,000 quickly. The program is intended for small businesses in communities suffering from presidentially declared disasters or SBA-declared disasters. These loans are meant to “bridge” the gap while applying for a direct SBA Economic Injury Disaster loan. These loans are repaid in full or in part by proceeds from an EIDL loan. As of March 25, 2020, SBA expanded its program eligibility to small businesses across the country that have sustained financial loss because of the Coronavirus crisis. In addition, EBL lenders must document that EBL applicants had an operating business as of March 13, 2020 and that the applicant was adversely affected by COVID-19, according to SBA’s guidelines. If the coronavirus crisis has affected the normal operations of your business, you may qualify for government help. However, given that the EIDL is reportedly been restricted to $15,000, it is unclear whether an EBL can be made for more than that amount.

Express Bridge Loan Program Guide: https://www.sba.gov/document/support--express-bridge-loan-pilot-program-guide

Last month, President Trump directed the Department of Housing and Urban Development (HUD) to suspend evictions and foreclosures through April as result of the massive job losses that have been caused by the coronavirus. The HUD foreclosure moratorium applies only to homeowners with mortgages insured by the Federal Housing Administration. This moratorium stops new foreclosures from being filed, existing cases from moving forward and foreclosure sale sales from proceeding.

The Federal Housing Finance Agency (FHFA) also announced that it would suspend foreclosures and evictions for homeowners with mortgages owned by Fannie Mae or Freddie Mac. Furthermore, mortgage borrowers who have loans owned by Fannie Mae and Freddie Mac will be able to defer two months of mortgage payments. A new “payment deferral” option is now available that will allow borrowers facing a hardship to defer two months of their mortgage payments until the end of their mortgage. An eligible Borrower will be brought current by deferring delinquent principal and interest payment, and creating a non-interest bearing balance that will become due at the earlier of following: the Mortgage maturity date, the payoff date, or upon transfer or sale of the property. Even if your loan is not backed by Fannie Mae and Freddie Mac, if you are facing financial hardship, you should contact your servicer to see if there are any options to suspend your mortgage payments during the COVID-19 crisis.

As a result of the Coronavirus crisis, unemployment has rapidly spiked. In the last four weeks more than 22 million Americans have become unemployed. This is approximately one out of eight people in the workforce. This has essentially wiped out all the job gains since the last recession. Over the past few years, people would often not file a claim for unemployment insurance because there was an opportunity to find another job. That is simply not the case presently. People who never filed for unemployment previously are pursuing it at this time because they have no other choice. To make matters worse, many people have been struggling for weeks to file for unemployment benefits via overwhelmed unemployment insurance systems and outdated websites. As a result, there are long delays in obtaining these needed benefits. These delays, in getting the money to households, will undoubtedly exacerbate the crisis.

If you have been laid off as a result of the coronavirus, New York State is presently waiving the 7-Day waiting period for applying for Unemployment Insurance. The system has seen more than 800,000 applications in the last 30 days. Due to the large amount of claims that are being processed, the Department of Labor is requesting that if you are filing a new unemployment insurance claim, the day you should file is based on the first letter of your last name. Last names that start with A - F, should file claims on Monday. Last names that start with G - N, should file claims on Tuesday, and last names that start with O - Z, should file claims on Wednesday. If you missed your filing day, file your claim on Thursday, Friday or Saturday. If you file later in the week, your payment will not be delayed, since all claims are effective on the Monday of the week in which they are filed. You should be able to file a claim online or by telephone, although the state is recommending the online system for filing new claims. Many New Yorkers have had problems filing their unemployment claims and the state just revamped the online filing system. If you submit your application online, it is recommended that you submit off hours.

The Department of Labor has also extended the telephone filing hours as follows:

Monday through Thursday, 8 am to 7:30 pm.

Friday, 8:00 am to 6:00 pm.

Saturday, 7:30 am to 8:00 pm.

Department of Labor Unemployment Hotline: 888-209-8124

Department of Labor Online Unemployment Application:
https://applications.labor.ny.gov/IndividualReg/

Department of Labor Unemployment Website:
https://labor.ny.gov/unemploymentassistance.shtm

Last month, New York Governor Andrew Cuomo has announced a directive to the New York Department of Financial Services that will require mortgage servicers to suspend mortgage payments for 90 days based on the financial hardship for borrowers who have loss of income due to the coronavirus. According to Governor Cuomo, “we’re not exempting people from their mortgage payments, we’re just adjusting the mortgage to include those payments at the back end.” The directive also includes a 90-day grace period for borrowers making loan modification payments. Plus, the directive would ensure the suspension would not have a negative effect on borrowers’ credit reports. Mortgage borrowers should contact their servicers because not all mortgage servicers are regulated by the Department of Financial Services in New York. Servicers who are not regulated by NYDFS may have alternate programs to those listed above. While these measures will help mortgage borrowers, there is presently no relief to suspend rental payments that has been announced.

Furthermore, Governor Cuomo has temporarily postponed all foreclosure sales and suspended all foreclosure proceedings. All eviction proceedings are also suspended until further notice. This will help ensure that New Yorker’s risk of becoming homeless during the COVID-19 crisis is significantly reduced. New York State Courts have postponed, until further notice, all non-essential court functions and clerks are have directed to not accept non-essential court filings. No existing foreclosure case can presently move forward, and no new filings will be accepted.

Finally, the Governor has asked DFS to instruct state-chartered banks to waive ATM fees, late fees, overdraft fees and fees for credits cards to help lessen the financial hardship of the COVID-19 pandemic on New Yorkers. If you are experiencing a financial hardship caused by COVID-19 you should also contact your credit card lenders and auto lenders (if applicable), as they may be offering programs to lessen the financial impact of this crisis.