Information for Businesses

If you haven’t already, we encourage you to:

The community can follow updates on the City of Morgan Hill’s website and on Facebook, Twitter, Instagram, and Nextdoor.

Morgan Hill businesses with urgent, non emergency questions or concerns are directed to call or text 408.767.6404. This number will be monitored regularly, Monday - Friday, during the hours of 8:00 AM to 5:00 PM. Messages will be responded to within 24 hours, during weekdays.

We are here for you. We will get through this together. 

In order to slow the spread of COVID-19 to the maximum extent possible, the Santa Clara County’s Public Health Officer, along with the Health Officers of the five adjacent counties and the City of Berkeley, issued a shelter in place order. The order began March 17th and is expected to last through May 3rd.

It is important to know that some businesses and employee functions (refer to Page 7 Item f) can remain operational during this order.  Please note that the March 31st Order has clarified essential businesses.  Please refer to the March 31 order (linked above)

We understand the County’s order to shelter in place for all of Santa Clara County and the impact of the COVID-19 is being felt by businesses within Morgan Hill. We are reaching out to provide information on resources which are available for your business. In response to the COVID-19 pandemic, both the Federal and State government’s have issued disaster declarations paving the way for Federal and State assistance.

Below you will find information on loan programs and  tax assistance.

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Note that this situation remains fluid and information about programs is still evolving.   These are the known resources available to businesses currently.  The information will start with the different loan programs that are available to Morgan Hill businesses along with SBA funding that has recently become available due to Federal and State disaster declarations.

The City in partnership with the Chamber of Commerce, Visit Morgan Hill and Morgan Hill Downtown Association has launched a Business Impact Survey to help identify resources for recovery and resiliency for Small Business.

The State of California Treasurer’s Office Small Business Resources Page has a great deal of information available for businesses including grants and other programs by County and City. 

Business Loan Programs:

Information on SBA Economic Injury Loans

What is an SBA-approved Economic Injury Disaster Loan?

If your business or not-for-profit has suffered substantial economic injury in a declared disaster area, you may be eligible to apply for an SBA Economic Injury Disaster Loan. These loans generally offer up to $2 million in assistance to businesses experiencing temporary loss of revenue. The key terms of these loans are:

  • A 3.75% interest rate for small businesses without credit available elsewhere. (Businesses able to get credit elsewhere are not eligible.)
  • A 2.75% interest rate for nonprofits.
  • A maximum 30-year term, determined on a case-by-case basis, based upon each borrower’s ability to repay.

How does a business apply for an Economic Injury Disaster Loan? 

A business should be able to apply to the SBA either online or by mail. The applicant must provide substantial financial detail to analyze the applicant’s creditworthiness. You can use the services of a CPA or a technical expert, but the SBA will not pay for these services.

Free advice can be sourced from local Technical Assistance providers.
Partners available to help prepare loan paperwork include:

  • Small Business Development Center SBDC.  Morgan Hill’s SBDC rep is Senior Business Advisor Allie Lopez- allie4svsbdc@gmail.com or 408.579.9943
  • Service Corp of Retired Executives SCORE
  • Minority Business Development Agency MBDA

What is the maximum loan amount limit? 

Disaster loans generally max out at $2 million, but if a business is a major source of employment the SBA has the authority to waive that limit.

What can the loan be used for? 

These loans may be used to pay fixed debts, payroll, accounts payable and other bills that can’t be paid because of the disaster’s impact. The loans are not approved to refinance the long-term debts of a business.

What credit requirements does the SBA use to determine the application? 

The SBA typically use the following criteria when considering an application:

  • An acceptable credit history
  • An ability to repay
  • Collateral is required for all loans over $25,000

Does the SBA take into account any insurance policy that may be applicable? 

Yes. If a business has business interruption insurance, or other relevant claims, then the SBA may reduce the amount of the loan.

What evidence demonstrates economic injury? 

Examples can include:

  • Financial statements from the bank and cash flow statements demonstrating the impact on the business prior to and since the onset of the disaster.
  • Written evidence of cancelled orders that have a material impact on the cash flow or profitability of the business since the onset of the disaster.
  • Proof of layoffs or reduced hours for staff as a consequence of a decline in income or cancelled orders.

How long does it take for an Economic Injury Disaster Loan to be approved? 

The SBA’s goal is to arrive at a decision on applications within 2-3 weeks.

TAX ASSISTANCE

IRS Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic (Federal Government)

The Secretary of the Treasury has been instructed “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency".  Please read the grant of relief offered to all taxpayers.

Notice 2020-17 (PDF), Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.

The Governor of California issued an executive order that outlines other programs to assist businesses and employees.

Families First Coronavirus Response Act (FFCRA) 

Emergency Paid Leave and Expanded Family and Medical Leave: the U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor announced that private small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act. Employers are encouraged to visit the U.S. Department of Labor website and IRS website for additional information on purpose, qualification, and frequently asked questions. (Currently not applicable to State and local governmental units).

2019 California tax returns (State of California)

This relief includes moving the various tax filing and payment deadlines that occur on March 15, 2020, through June 15, 2020, to June 15, 2020. This includes:

  • Partnerships and LLCs who are taxed as partnerships whose tax returns are due on March 15 now have a 90-day extension to file and pay by June 15.
  • Individual filers whose tax returns are due on April 15 now have a 60-day extension to file and pay by June 15.
  • Quarterly estimated tax payments due on April 15 now have a 60-day extension to pay by June 15.

The FTB’s June 15 extended due date may be pushed back even further if the Internal Revenue Service grants a longer relief period. For more information visit: https://www.ftb.ca.gov/about-ftb/newsroom/news-releases/2020-2-more-time-to-file-pay-for-california-taxpayers-affected-by-the-covid-19-pandemic.html 

Payroll (State of California)

Employers experiencing a hardship as a result of COVID-19 may request up to a 60-day extension of time from the EDD to file their state payroll reports and/or deposit state payroll taxes without penalty or interest. A written request for extension must be received within 60 days from the original delinquent date of the payment or return. For questions, employers may call the EDD Taxpayer Assistance Center toll-free from the U.S. or Canada: 1-888-745-3886.

Workshare Program (State of California)

Employers can apply for the Unemployment Insurance (UI) Work Sharing Program if reduced production, services, or other conditions cause them to seek an alternative to layoffs.

The Work Sharing Program helps employees whose hours and wages have been reduced:

  • Receive UI benefits.
  • Keep their current job.
  • Avoid financial hardships

More details and forms are available at: https://www.edd.ca.gov/Unemployment/Work_Sharing_Program.htm 

Sales Tax (State of California)

California Department of Tax and Fee Administration (CDTFA) has the authority to assist individuals and businesses impacted by complying with a state or local public health official’s imposition or recommendation of social distancing measures related to COVID-19. This assistance includes granting extensions for filing returns and making payments, relief from interest and penalties, and filing a claim for refund.

For more information please contact CDTFA: https://www.cdtfa.ca.gov/services/covid19.htm

Santa Clara County Property Tax

County Department of Tax and Collections understands and shares the public’s anxiety and concern about the impacts of the COVID-19 pandemic. While we cannot change the April 10 deadline for the Second Installment of Property Taxes because critical county services, schools, and local financial obligations are dependent on those scheduled revenues, we can waive penalties, costs, or other charges resulting from tax delinquency due to reasonable cause and circumstances related to this crisis.

Property owners can take advantage of the partial payment program and make multiple partial payments on the installment due.
https://www.sccgov.org/sites/dtac/tax/Pages/property-taxes-due-april-10.aspx 

City of Morgan Hill water and wastewater services:

To assist our residents and businesses during these uncertain times, Morgan Hill will not assess late penalties nor terminate services due to delinquency during April. We ask customers to reach out to Utility Billing for more information or request a payment arrangement.

Pacific Gas & Electric

PG&E has made service modifications for Impacted Customers.

  1. Suspended service disconnections for non-payment and waive new service deposit requirements for residential and small business;
  2. Implemented flexible payment plan options; and
  3. Provided additional support for low-income and medical baseline customers.

If a customer is experiencing financial hardships and has trouble paying their bill due to the economic impact of COVID-19, they can help. Please call PG&E at 1-800-743-5000.

RELATED TO EMPLOYEES (FOR EMPLOYERS)

Sick Leave

Employers can receive payroll tax relief for providing employees with up to 80 hours for paid sick leave for those unable to come to work due to COVID-19 illness. Employers are compensated through reduced payroll tax payments. In addition, compensation is available to allow employees to take care of a family member or their child due to school closure. Additional information about the caps on compensation amounts, the duration of additional leave, and potential for small business exemptions is available through the Department of Labor www.dol.gov/agencies/whd/pandemic/ffcra-employee-paid-leave.

Telework/ Telecommuting

Many providers of telework applications including local companies Cisco and Zoom are offering free or discounted access to their products which can be accessed through Open For Business. The State human resources website and Federal human resources website may provide good insights into the benefits and limitations of allowing employees to keep productive if they are unable to go to the job site. 

Evictions

The County of Santa Clara recently adopted a moratorium on residential and commercial evictions related to COVID 19. If the eviction is due to financial inability to pay rent or medical issues resulting from the coronavirus, commercial and residential tenants are safe from eviction through May 31 unless extended.