There have been numerous threads sharing information on financial aid available as a result of this crisis, and much great information in different threads – so much so that it takes a lot of research and reading to find the information you are seeking. I figured it would be incredibly helpful to many of you to have a consolidated outline of the financial information shared on ODs on facebook, so I created this concise guide to financial support and information for ODs posted by your colleagues. This is by no means a full “accounting” of everything everyone has posted on the site but it covers about 90% of all shared information on loans, debt relief and financial forgiveness for ODs and students. Please be sure to share this with your colleagues on social media.
Families First Coronavirus Response Act (FFCRA)
The President signed into law the FFCRA on March 18th to assist the burdens placed on the American workforce in the current crisis. This makes paid sick leave available for use by employees immediately, regardless of the length of employment. Benefits are available to people who are temporarily furloughed or “laid off” which is particularly beneficial to employed ODs. Here are some of the details:
- Addition of Emergency Paid Sick Leave Act and making the following changes to the “Family and Medical Leave Act”
- Businesses with under 500 employees required to provide 2 weeks or 80 hours of paid sick leave at the full pay rate
- Time must be taken between April 2 and December 31, 2020
- For employees unable to work the maximum amount of pay is $511 per day up to the 10-day aggregate ($5,110)
- For employees with restrictions in availability to work due to childcare issues the maximum is $200 per day or $2,000 in 10-day aggregate
- Employers cannot require employees to use other earned paid leave before the 10 days are utilized, so employees will use the leave provided by the expanded leave act and then other earned leave if they choose
- Part-time employees leave is prorated based on their average number of hours worked per a two-week period
- Requirements for expanded family and medical leave for those unable to work or telework
- Has imposed on them a federal, state or local quarantine or isolation order related the current crisis
- Has been advised by a doctor to self-quarantine
- Is currently experiencing symptoms and seeking a medical diagnosis
- Is caring for or quarantined with someone suspected of having, actively infected with or being treated for COVID-19
- Those with restrictions in availability to work due to childcare issues
The one caveat that might negatively impact an employed OD or employees of eye care practices is that the emergency paid sick leave is unavailable if the employer’s place of business is closed and employers who fail to pay or terminate employees to avoid having to pay them are subject to penalties outlined in the Fair Labor Standards Act.
Other Important Details of the FMLA
- For employees who need more time off for child care issues or to care for other dependents, 12 weeks of job-protected leave are available for any employees who can’t work or telework and need to take care of a child under the age of 18
- For employees, the first 10 days of FMLA may be unpaid, however, employees may bridge this gap and use other types of earned leave
- After the 10th day, employers required to pay employees at 2/3 employee’s regular rate for employee’s usual and customary work schedules for the next 10 weeks
- Payment limited to $200 per day and $10,000 aggregate per employee for employees who have been employed over 30 days
- Employer’s costs for providing this leave are offset by payroll tax credits, which will equal 100% of the qualified leave payments made under the act
- Self-employed and 1099 employees can claim a credit against your federal income tax liability
To read an excellent article and take a deeper dive Dr. Julie Phan published this article at the ODs on finance blog at this link- https://www.odsonfinance.com/how-does-the-families-first-coronavirus-response-act-affect-me/?fbclid=IwAR0ttxHMzPTgDQVqNUIFQ-WHcOYixotzuIgt4Z7PXEpX5fIoRplG80-3oXg
Small Business Administration Loans (SBA)
The US Small Business Administration offers a number of different loans tailored to the capital needs of growing businesses. It is a government loan. Normally a daunting process (detailed, online application) the SBA is allowing private, local banks to do the programs. Check with your banker before filling out these applications so you can understand the process in the interest of efficiency. It is advised by members to start the application process but not file yet as the details of the government’s economic stimulus are not clear. To fill out the online app you’ll need your last 3 years of taxes. Up to $25,000 can be borrowed if non-collateralized and as high as $225,000 can be provided with collateral, money provided in about 30 days. Remember, you may not qualify for a SBA loan if you have other credit options available so check with your banker before putting too much time into the process.
Home Equity Lines of Credit (HELOC)
If you own your own home or real estate, some members suggest using a home equity line of credit. Advantages of a HELOC include (1) low-interest rate compared to other types of loans (2) you only pay interest when you access the line and only on the amount accessed and (3) getting your line is relatively quick compared to other vehicles. Members mentioned using their local banks and newer options like Kabbage, an online lender reported to have a simple application process. Apparently the down-side to Kabbage and other online lenders is a high-interest rate.
Business Lines of Credit (BLOC)
Small business owners can leverage the equity in their business to get a BLOC. Currently, these loans, like HELOCs have low-interest rates. Check into BLOCs at your local bank. Rates for these loans at the time this article was published was prime + ½%, which is very low. Due to the current situation, it might take a while to get an appointment with a banker, so plan ahead.
Rent and Mortgage Relief Options
Some community members discussed experiences after reaching out to landlords for relief on rent or mortgage companies for relief or deferral of mortgage liabilities. One member who reached out to a landlord got a 25% reduction in rent for the next 3 months with the reduction being added back each month over the subsequent 6 months. Another member’s landlord reached out to them offering a significant discount on rent until they are able to reopen and schedule.
Some lenders have not been so keen on the idea of deferring rent. One member’s landlord responded to their request by “encouraging us (the building tenants) to seek an emergency bridge loan so we can keep paying the rent in full”. If this happens a negotiating point you have is that if you are forced out of the building it’s not likely your space will be filled with anyone; tenants will be difficult to find in the “after COVID” real estate market.
On Monday, March 30th, at 11:30 am, Health Pro Realty Group will be presenting support in a “no-cost to you” webinar from Health-Pro Realty Group’s, Charles Feitel, as well as two partners from the law-firm Whiteford/Taylor/Preston, Phillip Bogart, and David Stevens. We will be addressing immediate real estate relief options as well as options going forward post-pandemic, as well as current and new employer laws. If you click the link below, you are requesting to either join our live webinar or are requesting to get a copy of the recording.
Federal Student Loans
Members advise if you have federal student loans to call your loan servicer asap to temporarily stop payments. Most lenders offer a “disaster forbearance”, meaning no payment is due during a disaster for 90 days. There is no paperwork, but phone times vary so don’t delay. For some of you who pay online, you might be able to go online and suspend your autopay while you go through the process. Most of you have a different form of disaster forbearance called “voluntary forbearance”; for those of you with voluntary forbearance interest would still accrue until the government plan is in place.
How Banks and Credit Card Companies May Be Willing to Assist
Capital One, Citi and Wells Fargo have all issued statements indicating that they are willing to work with customers that experience financial difficulties. Citi issued a statement that for 30 days, small business customers are eligible to have their monthly service fees waived. Wells Fargo donated $6.25 million in aid to help the public relief effort. The bank also encouraged customers that are experiencing financial hardship to contact customer service for assistance. Call all your credit card companies to find out what assistance is available.
Banks members are recommending great programs and customer service includes M&T Bank, PNC Bank, RBC Bank, Chase Bank, and Citizens Bank, Wells Fargo Practice Finance Division. One member mentioned her PNC branch reached out to her proactively with a deferment offer on current loans, an offer to refinance mortgages and an offer for a new line of credit! Some banks people were having problems with include Stearns Bank such as excessive fees and tons of paperwork required.
Facebook Small Business Grants Program
Facebook has announced a grant program to support small businesses. Information is available here https://www.facebook.com/business/boost/grant
Many auto financing companies are offering payment deferral. Members report the ability to defer with some lenders for up to 3 months. Members report some equipment leasing companies have been willing to defer also for up to 3 months.
Other Great Resources
Be sure to check out the Facebook group “ODs on finance”, run by Julie Phan, Aaron Neufeld and Dat Bui which has a plethora of great financial information for ECP’s. Keep perusing ODs on facebook as the information on financial options, advice and recommendations is a moving target, changing by the minute. Please share this guide via social media so your colleagues may benefit. See you on “ODs on facebook!”