Welcome to 2021! We hope that all of you enjoyed some much deserved time off to recharge and get ready for a new year. In reality we flip the page on a new month and year, but the same issues remain. We’ll undoubtedly face many new issues as well, although I think we all can agree we should be prepared for anything these days.
With that said, today we jump right into things with some information on what’s happening in DC, closer to home in the state, vaccine news, and look at some issues looking President-elect Biden in the face.
*Daily Coronavirus update brought to you by Silver Cross Hospital
No Application Date Announced Yet, but Get Ready for PPP
You can soon apply for a new PPP (forgivable) loan, whether you received one before. This can be your first or second PPP loan. We hit on some of the highlights quickly before the break, so here is a little deeper of a dive.
• Your income – gross receipts – must have declined by 25% or more in any quarter of 2020 compared to 2019. It appears that this loss will need to be measured by quarters, not just a three-month period. Gross receipts are likely to exclude funds from PPP loans or other loans or grants.
• You must have been in business prior to Feb. 15, 2020.
• You must have used, or will use, all of your previous PPP loan if you received one.
• You must have fewer than 300 employees.
• Qualified businesses can be corporations, LLCs, sole proprietors, self-employed, independent contractors.
• No loan can be greater than $2 million.
How much can you get?
• Most businesses: As in the first round of PPP, you can get up to your average monthly payroll in 2019 times 2.5. In other words, if your total 2019 monthly payroll cost averaged $10,000, you can apply for $25,000. Keep in mind that “payroll” expenses include all costs for W-2 employees (not independent contractors), including wages, commissions, bonuses, health insurance, retirement, state, and local taxes.
• Accommodation and food service businesses (hotels and restaurants): Recognizing how hard hit these industries have been, Congress upped the amount to 3.5 times average 2019 monthly payroll costs. In other words, if your restaurant’s 2019 monthly payroll averaged $10,000, you can now apply for $35,000.
You can get forgiveness for this PPP loan by spending at least 60% on payroll expenses (wages, salaries, retirement, group health insurance, etc.) and a maximum of 40% on other qualifying expenses during an eight or 24 week period. More expenses now qualify (see below).
PPP set aside for certain small businesses
Because the smallest businesses and those located in low- and moderate-income areas were often shut out of the first round of PPP funding, this bill includes set-asides for small businesses with fewer than 10 employees, those in low/moderate income areas, and funds for small community banks, credit unions and community-based lenders. This will hopefully level the playing field, making it easier for smaller, needier businesses to get these loans.
New treatment of PPP expenses
Expenses used for PPP forgiveness are now tax deductible. When Congress passed the CARES Act, lawmakers indicated that PPP funds should not be taxable. However, Treasury Secretary Steve Mnuchin decided businesses could not deduct expenses used to qualify forgiveness – thus making an equivalent amount to PPP funds taxable. This legislation reverses that decision.
Simplified form for forgiveness
If your PPP loan was for $150,000 or less, there will be a new, simple, one-page form to apply for forgiveness. Your lender should provide you a link to a form soon in the new year.
More expenses qualify for forgiveness
While you still need to use at least 60% of PPP funds on payroll expenses, qualifying non-payroll expenses are much broader, now including payment for software, cloud services, accounting and human resources, property damage due to civil unrest, personal protective equipment, and COVID-19-prevention equipment and, importantly – supplier costs that were contracted or ordered for before you got the loan or costs of perishable goods ordered before or during the life of the loan.
Not PPP, but grants, changes for Economic Injury Disaster Loan
When EIDL (Economic Injury Disaster Loan) grants were passed by Congress, they allowed for a $10,000 “Advance” to be treated as a grant, not a loan. The SBA unilaterally scaled back that grant to only be $1,000 for each employee, counteracting congressional intent. This addresses that issue.
• Businesses in low-income communities that received an EIDL can get a grant equal to the difference of what they received and $10,000.
• Eligible businesses in low-income communities that did not get EIDL/Advance grants because funds had run out can now get $10,000.
Also, if you previously received both an EIDL Advance grant and a PPP loan, you had to deduct the advance from your PPP forgiveness amount. You now no longer have to deduct that amount from forgiveness.
What you should do immediately
- Act fast. What small businesses learned the last round of PPP funding was that if you snooze, you lose. You should be prepared to apply for everything the very first day it becomes available.
- Figure out your income by quarters this year versus 2019. Many small businesses have lousy records, but you’re going to have to certify at least a 25% drop in gross revenues.
- Contact potential lenders. Contact local banks, community lending institutions, credit unions. Ask whether they’re going to participate in the next round of PPP lending. Find a couple lending sources, even if you received a PPP loan before.
- Try to connect with an individual lending officer. You’ll have a better chance of getting a PPP loan if you have a relationship with a person.
- Set up business banking. If you don’t already have a business bank account, get one.
- Pay attention. Keep a close out eye for application openings and deadlines. Apply DAY ONE for everything you even potentially qualify for.
- Don’t pass this opportunity up! This may be the last congressional help that comes to small businesses.
Visit our covid resource page for documents that have been added that review the relief package as well as the PPP changes in particular: https://jolietchamber.com/2020/03/covid-19/
U.S. Jobless Claims Post Surprise Drop
U.S. claims for unemployment benefits unexpectedly fell to a one-month low, though the recent increases in coronavirus cases and business closures threaten to keep layoffs elevated through early 2021.
Initial jobless claims in regular state programs declined by 19,000 to 787,000 in the week ended Dec. 26, according to a Labor Department report Thursday. That was less than the 835,000 median estimate in a Bloomberg survey of economists. The figures are often volatile around holidays and last week included Christmas. Without adjustments, claims dropped by 31,736.
Continuing claims for state programs, which roughly correlates to the total number of people receiving state unemployment benefits, also decreased, to 5.22 million in the week ended Dec. 19. Economists projected an increase to 5.37 million.
Illinois, which reported a drop of more than 28,500 applications from the prior week, accounted for the lion’s share of the overall decline in unadjusted claims. Pennsylvania, Georgia, and Texas also recorded sizable declines in filings. New York and California, among states with more pandemic-related restrictions, reported increases in jobless claims.
In addition to regular state claims, more than 308,000 initial applications were filed last week under the Pandemic Unemployment Assistance program, which provides funds for those not eligible for the state programs such as gig workers. In total, 8.46 million weeks of benefits were claimed for that program in the period ended Dec. 12.
There were also 4.77 million total weeks of claims in the Pandemic Emergency Unemployment Compensation, a separate program that provides additional weeks of benefits to Americans who have exhausted the regular state program.
Illinois Lame Duck Session
The Illinois House plans to convene Jan. 8 in Springfield for a “lame-duck” session that could last until Jan. 13 — the date a new legislative session will be convened.
State senators have been told to prepare for a similar schedule.
Jessica Basham, chief of staff for House Speaker Michael Madigan, D-Chicago, sent an email to House lawmakers and staff members Wednesday afternoon that suggested they make arrangements to be in Springfield for a session at the Bank of Springfield Center “under substantially the same protocols as were followed in May 2020.”
The Illinois Senate has informed its members that a lame-duck session may be convened, but a formal decision hasn’t been made, according to John Patterson, spokesman for Senate President Don Harmon, D-Oak Park. The Senate in May conducted business in the Senate chamber in the Capitol, less than a mile from where the House met.
Basham’s email didn’t outline any issues to be dealt with during the lame-duck session. That session will bring together lawmakers who were re-elected in November, those newly elected and those who won’t be returning for the 102nd General Assembly session. The 102nd session begins with a noon swearing-in ceremony Jan. 13.
Madigan spokesman Steve Brown said it’s possible that the General Assembly’s Legislative Black Caucus could take the opportunity during the lame-duck session to introduce and try to pass a package of potential bills the caucus has been holding public hearings on regarding criminal-justice reform, police accountability, workforce development and health care.
Covid-19 Vaccine Made by AstraZeneca, Oxford Is Authorized by U.K.
The U.K. authorized a Covid-19 vaccine developed by the University of Oxford and AstraZeneca PLC, opening the door for the rollout of millions of doses in a country where infections have surged amid a more infectious variant of the virus.
U.K. health officials also recommended a delay of up to three months between both doses of the vaccine, guidance that also applies to the shot developed by Pfizer Inc. and BioNTech SE that was authorized in the U.K. earlier this month. The delay will allow inoculations to reach more people more quickly as the new variant pushes new cases to records and hospitalizations soar. The green light represents the third emergency-use approval of a Western-developed vaccine this month.
The Oxford-AstraZeneca vaccine stands out on price, convenience, and global ambition. AstraZeneca has promised to make as many as three billion doses available in 2021—more than any other Covid-19 vaccine maker—and at a cheaper price. The U.K. company says it won’t profit from the shot during the pandemic, or ever in the case of poorer countries. The vaccine also can be transported and stored for months with normal refrigeration, making it easier to distribute where people and health-care networks are sparse or underfunded. The two other Western vaccines in use require ultracold temperatures for all but a few days or weeks.
AstraZeneca’s shot—less effective in clinical trials than its rivals’ injections—won’t be available in the U.S. until the Food and Drug Administration reviews large-scale trials still being conducted there and decides whether to authorize its use.
Novavax Starts Late-Stage Trial of Covid-19 Vaccine in U.S., Mexico
Novavax Inc. said it is starting a new clinical trial of up to 30,000 people in the U.S. and Mexico to test whether its experimental Covid-19 vaccine safely protects people from the disease.
Novavax’s shot will become the fifth Covid-19 vaccine to enter final-stage testing in the U.S., and if results are positive it could receive authorization sometime during 2021. Public-health officials say that despite the introduction of the first two Covid-19 vaccines in the U.S., additional vaccines will be needed to meet demand and control the pandemic.
“We’ve come this far, this fast, but we need to get to the finish line,” said Francis S. Collins, director of the National Institutes of Health, which is helping to fund the Novavax study. “That will require multiple vaccines using different approaches to ensure everyone is protected safely and effectively from this deadly disease.”
The company didn’t say when it expects to generate results from the new study, but it will likely be spring at the earliest. Studies of the first two vaccines from Pfizer Inc. and Moderna Inc. took nearly four months for results to become available.
Novavax’s vaccine contains proteins resembling the “spike” proteins found on the surface of the coronavirus, which are supposed to trigger an immune response to the virus once injected. Novavax manufactures the proteins in insect cells. It also contains an adjuvant, a substance designed to enhance immune responses. Novavax’s adjuvant is derived from the bark of an evergreen tree native to Chile.
This approach of combining a protein with an adjuvant is similar to that of vaccines against some other diseases, including GlaxoSmithKline PLC’s shingles vaccine, Shingrix. But it is a different mechanism from the Pfizer and Moderna Covid-19 vaccines, which use gene-based technologies, and those from Johnson & Johnson and AstraZeneca, which use viral-vector technology.
Novavax, of Gaithersburg, Md., has previously reported positive results from early-stage testing of its Covid-19 vaccine, showing that it could induce immune responses and was generally safe. The company was originally planning to start a large Phase 3 trial of the vaccine in the U.S. in the fall, but it has experienced manufacturing issues that delayed the start.
The study will be conducted at about 115 sites. About two-thirds of the study volunteers will receive the vaccine in two doses, three weeks apart, while one-third will receive a placebo. Researchers will then keep track of how many people in each group contract Covid-19 with symptoms, starting seven days after the second injections.
It is being funded with some of the $1.6 billion that Novavax was awarded in July by the federal government. That funding, part of the Operation Warp Speed initiative, also covers establishing large-scale manufacturing and delivering 100 million doses of the vaccine for use in the U.S.
Other studies of the Novavax vaccine outside the U.S. are continuing. The company said it has completed enrollment of 15,000 people in a late-stage, Phase 3 trial in the U.K. Interim results from this study could become available in the first quarter of 2021, though timing depends on coronavirus transmission rates in the U.K.
Main Deadlines Awaiting President-elect Biden
- Unemployment benefits: March 14/April 5
The most important deadline Biden faces will likely be when extended, expanded unemployment benefit programs expire in mid-March. One of the main reasons Congress acted this month was the Dec. 31 expiration of two CARES Act programs, one that made the self-employed and gig economy workers eligible for benefits, and the other that extended the overall time benefits could be received.
Had the bills expired, an estimated 12 million people would have found themselves with no incomes at all, but the benefits have only been extended for 11 weeks, until March 14, though that deadline only bars new people from signing up. People already on the program can continue receiving benefits for another three weeks, until April 5.
Though the “soft cliff” will give people some additional benefits into April, the additional $300 in weekly payments will run out on March 14.
- Eviction moratorium: January 31
The latest COVID-19 relief bill extended the Centers for Disease Control and Prevention (CDC) eviction moratorium from Dec. 31 until Jan. 31. Nearly 13 million Americans say they are having trouble paying rent, and the only thing keeping a roof over many of their heads is the evictions ban, which will expire just 11 days after Biden’s inauguration.
“If Biden doesn’t act quickly, the minute there’s an opportunity we’re going to see a massive wave of filings,” said John Pollock, a staff attorney at the Public Justice Center.
The CDC moratorium was put in place through executive action after the original eviction’s moratorium included the massive CARES Act signed into law in March expired. The most recent legislation was intended to simply see it through into the Biden administration without lapsing, meaning he could easily renew it without help from Congress.
But Pollock and other housing activists have been critical of the CDC moratorium, saying it requires too much preemptive action on the part of renters, who often are not aware that the protection is available. Even with the CDC ban, many informal evictions have taken place, and advocates have documented cases of landlords turning off electricity or water to shoo away tenants behind on rent.
The $25 billion fund Congress approved to help people pay accumulated rental debts could go a long way, but it is only a fraction of the $70 billion in rental debt Moody Analytics estimated will accrue through the crisis.
- Small-business loans: January
Business groups around the country hailed the revival of the Payment Protection Program (PPP) in the new legislation. When Congress approved the first $349 billion round of PPP, the fund went dry within about two weeks, requiring another injection of funding from Congress. Just over half of the second, more targeted round of $310 billion was spent, leaving $134 billion in the bank when the program expired.
The latest round of PPP loans only has $284 billion, just over half the total that went out in the first two rounds, raising questions as to how long it will last. Stephanie O’Rourk, a partner at accounting firm CohnReznick, says she wouldn’t be surprised if the money ran out by the end of January.
“This was needed 3 months ago. People were making decisions whether to shut down or remain open based upon this passing,” she added. Many businesses that were able to turn to their cash reserves early on in the pandemic have now run those down, and winter conditions have added strain on those businesses that turned to outdoor adaptations in the summer and fall.
If the money runs out quickly, there will likely be calls for Congress to act again. “I do believe that this whole bill is a Band-Aid, maybe through the first quarter. There is going to be, once the Biden administration comes in, the need for another CARES-type Act,” O’Rourk said.
- Student loan forbearance: February
The CARES Act put in place a policy of student loan forbearance, allowing borrowers to delay payments without accruing more interest or fees. The Trump administration extended the policy in August, most recently pushing the deadline until February.
While the latest relief bill did not reinstate the policy, Biden will likely continue it through executive actions. He’s floated the idea of forgiving up to $10,000 of student loan debt through executive action, an idea progressives say can be taken even further.
- State and local budgets
Democrats failed to win $160 billion in aid to state and local governments in the latest bill and have cited it as one of their top priorities moving forward.
While it’s hard to put a specific deadline on action for Congress, many states reconvene their legislatures in January and have to adjust their annual spending based on updated budget conditions, which could lead those facing severe crunches to pull back services and cut more jobs. Already, 1.3 million jobs have been lost from state and local cuts alone, mostly in education.
Most states also are required to approve new, balanced budgets by the end of their fiscal years in June. Without aid, more cuts could be set in motion.
Biden Building Team to Get Aggressive on Regulation
President-elect Joe Biden is building a team of seasoned government professionals who can help him embark on an aggressive regulatory agenda once he takes office.
Biden will face a divided Senate when he takes office that could be controlled by Majority Leader Mitch McConnell (R-Ky.) depending on the outcome of two Jan. 5 runoff elections in Georgia.
This will make moving legislation difficult and will almost certainly force Biden to lean on executive actions and regulatory. Under the Trump administration, various departments have rolled back a suite of environmental laws, set up barriers to immigration and weakened a host of discrimination protections at various agencies.
Meanwhile, Biden has pledged to move forward with policies to expand health care, address racial injustice and undo the Trump administration’s immigration agenda and environmental rollbacks. Biden’s first 100 days are likely to be focused on addressing the coronavirus pandemic, as his administration takes over the vaccine distribution process and he pushes for Congress to pass more legislation to address the pandemic.
Democrats are pushing Biden to waste no time in beginning a regulatory process that can take years. “The regulatory agenda is going to be critical — and that has to be an agenda that is aggressive and swift enough to meet the moment,” said Amit Narang, a regulatory policy advocate with Public Citizen, a left-leaning advocacy group.
“In the beginning that’s going to be mostly about dealing with the last-minute Trump actions and seeing how much of that can be blocked right up front at the beginning of the administration,” he said. “The rollbacks that have been on the books longer will take longer to undo, so time is going to be of the essence.”
Program Notices & Reminders
U.S. Chamber Guide to New Pandemic Relief Package
How Do These Changes Impact My Existing PPP Loan?
I Exhausted My Initial PPP Loan, How Does This Help Me?
What If I Never Received a PPP Loan?
Which Changes to Other Programs That May Help My Small Business Have Been Changed?
- Expanded Employee Retention Tax Credit
- EIDL Grants
- Grants for Shuttered Venue Operators
- SBA Loan Debt Forgiveness
Here is the link to the Monday 12/21 update that contained full information on the relief package:
SBDC at JJC Update
21 Topics in 21 Minutes for 2021 Growth
Date: Scheduled one-on-one session
In less than 30 minutes, the Illinois Small Business Development Center at Joliet Junior College will help you prioritize key 2021 business plans whether it is for your people, your product, your marketing, your sales, your money, or the impact of this crisis. In this short, one-on-one exercise, we will help you determine up to three of the biggest opportunities for growth in the year ahead. We will offer no-cost tools to develop your strategy for success in those areas. Email us at SBDC@JJC.edu and we will send you a link for registration.
Selling for Non-Salespeople
Date: 1/7/21 Time: 2pm
Is your B2B product or service really awesome – BUT – you aren’t confident in your ability to sell it? Most of us feel like introverts at times, but you can join us for a simple session to act like an extrovert. Hear tips on how to do the prospecting, presenting, and closing to help you get new customers to say YES! Join Mike Wilczynski for the no-cost webinar by registering at: https://ilsbdc.ecenterdirect.com/events/33822
Starting Your Business in Illinois
Date: 1/14/21 Time: 9am
Thinking about starting a business in Illinois? This informative workshop helps entrepreneurs understand many of the steps and requirements. In this no-cost overview of Starting Your Business in Illinois, we will touch on many aspects of your business plan, including legal, accounting, banking, marketing, and sales.
Advanced Business Data Research (with Shorewood Library)
January 21st at 6pm
Already familiar with Reference Solutions (formerly Reference USA)? Learn how to utilize this data even more! In this session, learn higher level search techniques, how to use the additional functionality (like the mapping, summary, and chart options), and how to combine searches within modules to get a more in-depth level of data.
Register at: https://ilsbdc.ecenterdirect.com/events/33678
Government Certification Process (with Rita Haake at COD)
January 28th at 9am
Certifications: Interpreting the alphabet to pursue profits! Which small business certification is the best one for you?
• Federal: 8(a), EDWOSB, HUBZone, SDB, SDVOSB, WOSB, VOSB
• State: DBE, FBE, FMBE, MBE, PBE, VBE
• Local: DBE, MBE, WBE, VBE
You will learn the details of the application process, documentation requirements, certification options, and how to market and leverage certifications for the growth of your business.
Register at: https://ilsbdc.ecenterdirect.com/events/33909
Will County Residents Behind on Mortgage or Rent Can Access Funds
Funds are available to those at least one month behind on rent. utility assistance is also available for those who qualify. Renters having difficulty working with their landlords and facing eviction are encouraged to contact Prairie State Legal, another HUD CARES funded program, at (815) 727-5123.
Owners behind on their mortgages are encouraged to work with their mortgage companies on forbearance options. If those options are not available or exhausted, assistance is available for families behind on mortgage payments as well.
The local agencies helping are:
- Will County Center for Community Concerns, (815) 722-0722
- Spanish Community Center, (815) 727-3683
- Catholic Charities, (815) 774-4663
- Community Service Council, (815) 886-5000
Finally, as we move into 2021 please keep in contact and send your feedback on the issues your business faces, the aid you may need dealing with IDES or the Business Interruption Grant, and questions you may have moving forward.
Joliet Region Chamber of Commerce & Industry Staff and Board of Directors
Vice President – Government Affairs
Joliet Region Chamber of Commerce & Industry