Become a Member

COVID-19 Frequently Asked Questions

The Small Business Association of Michigan is committed to helping business owners navigate the very complex and very fluid issues regarding the COVID-19 crisis.

These FAQs are meant to serve as a guide. Please consult your attorney or HR professional. Members can also utilize the SBAM Ask An Expert hotline or simply email for assistance.

Loans and Finance Options

Click here to apply for the Economic Injury Disaster Loan from the SBA.

Express Loans

The CARES Act increases the maximum amount for a SBA Express Loan from $350,000 to $1 million through December 31, 2020.

Loans FAQs

Can I apply for the EIDL and Unemployment?


SBA Economic Injury Disaster Assistance Loans in Response to the Coronavirus

  • The U.S. Small Business Administration is offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of the Coronavirus (COVID-19). These SBA makes loans are available to small businesses and private, non-profit organizations territory to help alleviate economic injury caused by the Coronavirus (COVID-19).
  • SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.
  • 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 interest rate is 3.75% for small businesses. The interest rate for non-profits is 2.75%.
  • SBA offers loans with long-term repayments in order to keep payments affordable, up to a maximum of 30 years. Terms are determined on a case-by-case basis, based upon each borrower’s ability to repay.
  • For additional information, please contact the SBA disaster assistance customer service center. Call 1-800-659-2955 (TTY: 1-800-877-8339) or e-mail​

If I receive a state grant or loan, can I still receive the SBA funds as a forgiven loan or apply for the PPP? 

Yes, you may still apply for the EIDL and PPP because they are Federal Programs. State Programs do not impact Federal programs.

Are Faith Based Organizations eligible for PPP and EIDL?

Faith-based organizations impacted by COVID-19 are eligible to participate in the Paycheck Protection Program and the Economic Injury Disaster Loan program, without restrictions based on their religious identity or activities, to the extent they meet the eligibility criteria outlined in the CARES Act that was passed by Congress, signed into law by President Trump, and implemented by the Paycheck Protection Act Interim Final Rule.

What are SBA‘s lending criteria?

The applicant (including an Operating Company) must be creditworthy. Loans must be so sound as to reasonably assure repayment. SBA will consider:

(a) Character, reputation, and credit history of the applicant (and the Operating Company, if applicable), its Associates, and guarantors;
(b) Experience and depth of management;
(c) Strength of the business;
(d) Past earnings, projected cash flow, and future prospects;
(e) Ability to repay the loan with earnings from the business;
(f) Sufficient invested equity to operate on a sound financial basis;
(g) Potential for long-term success;
(h) Nature and value of collateral (although inadequate collateral will not be the sole reason for denial of a loan request); and
(i) The effect any affiliates (as defined in part 121 of this chapter) may have on the ultimate repayment ability of the applicant.


On Wednesday, March 25, 2020 and on March 27, 2020, the U.S. Senate and the House of Representatives passed the Coronavirus Aid, Relief and Economic Security (CARES) Act and the President signed it into law. The CARES Act creates several new Federal Small Business Administration (SBA) loan programs or amendments to existing programs that could assist businesses that have been impacted by the COVID-19 pandemic with their day-to-day operating expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.

The application for borrowers can be found HERE (Please note that is processed through your local SBA lender.) We recommend checking with your current financial institution first.

Read a top-line overview of the program

The CARES Act excludes from the definition of payroll costs any employee compensation in excess of an annual salary of $100,000. Does that exclusion apply to all employee benefits of monetary value?

No. The exclusion of compensation in excess of $100,000 annually applies only to cash compensation, not to non-cash benefits, including:

  • employer contributions to defined-benefit or defined-contribution retirement plans;
  • payment for the provision of employee benefits consisting of group health care coverage, including insurance premiums; and
  • payment of state and local taxes assessed on compensation of employees.

PPP Details

The Paycheck Protection Program prioritizes millions of Americans employed by small businesses by directing $349 billion towards job retention and business operating expenses.

The Paycheck Protection Program is designed to provide a direct incentive for small businesses to keep their workers on payroll by providing each small business a loan up to $10 million for payroll and certain other expenses.

Small businesses and eligible nonprofit organizations, Veterans organizations, and Tribal businesses described in the Small Business Act, as well as individuals who are self-employed or are independent contractors, are eligible if they also meet program size standards.

If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable.

Under this program:

  • Eligible recipients may qualify for a loan up to $10 million determined by 8 weeks of prior average payroll plus an additional 25% of that amount.
  • Loan payments will be deferred for six months.
  • If you maintain your workforce, SBA will forgive the portion of the loan proceeds that are used to cover the first 8 weeks of payroll and certain other expenses following loan origination.

When do I need to re-hire my employees with PPP?

Once you receive the loan money, the 8 week period begins. Therefore, you must be at full employment for those 8 weeks. Ex: If I take the loan out on 5/14, then I have to be at full employment for the next 8 weeks in a row.

If a business gets approved for a loan and they don’t set the closing, take the money and get up to full employment before June 30, 2020, the loan will NOT be forgiven.

Can the PPP be used to pay employees even if they have to stay home by government order?

Yes, because the purpose of the loan is to retain employees so if employers retain them and continue to pay them, that is allowable.

Does the payroll calculation include bonuses? 

No, it does not include bonuses. Payroll means for this purpose salary + benefits, as it is explained on page #10 of the interim final decision.

  1. Link to Interim Final Decision/Rule

Payroll calculation in IFR is worded as previous 12 months on page 8 – does this mean we shouldn’t use 2019 numbers which could be easily verified with 941s etc?

Yes, you may use 2019 information.

Does the PPP have a credit rating since it is run through the lenders? which is SBA’s lending criteria.

No, because under the PPP program Lenders will not be required to comply with 13 CFE 120.150

What Documents are Needed for PPP Application:

You’ll have to collect and submit the following information with your application so that they can calculate the size of loan you are eligible to receive:

  • Third party payroll administrator records for the applicable period.
  • List of all employees with their total compensation. For the purposes of this application, any employee with total compensation over $100,000 should be listed as $100,000.
  • Copies of quarterly 941 payroll tax reports filed with the IRS and a copy of W-3 (note 941 statements may not be available for Q1 of 2020).
  • Records of payments made for vacation, parental, family, and medical or sick leave.
  • Records of payments made for employer paid group health care benefits, if applicable.
  • Records of payments made for employer paid retirement plan benefits, if applicable.
  • Records of payments made for state or local taxes assessed on the compensation of employees, if applicable.

Visit our Loans & Funding page for more grants available to small businesses.

Tax FAQs

Penalty and interest waived for 30 days for monthly and quarterly sales, use, and withholding returns due April 20, 2020.

In recognition of the continued disruption of businesses required to file returns and remit sales, use, and withholding taxes, the Department of Treasury is waiving penalty and interest for the late payment of tax or the late filing of any monthly or quarterly return due on April 20, 2020. The waiver will be effective for a period of 30 days; therefore, any monthly or quarterly payment or return currently due on April 20, 2020 may be submitted to the Department without penalty or interest through May 20, 2020. See the full release.

Tax Filing Deadlines Changed

The tax filing deadline has been extended to July 15, 2020 for both federal and state taxes. Maner Costerisan has a full calendar of dates available, including quarterly filing deadlines.

Taxpayers can also defer federal income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations and other non-corporate tax filers as well as those who pay self-employment tax.

Taxpayers do not need to file any additional forms or call the IRS to qualify for this automatic federal tax filing and payment relief.

Penalties and Interest Waived on Michigan Quarterly Filings

The Department of Treasury is waiving penalty and interest for the late payment of tax or the late filing of the return due on March 20, 2020. The waiver will be effective for a period of 30 days; therefore, any return or payment currently due on March 20, 2020 may be submitted to the Department without penalty or interest through April 20, 2020. The waiver is limited to sales, use, and withholding payments and returns due March 20, 2020.

Governor Whitmer Delays Michigan State and City Income Tax Deadlines

Effective immediately, state of Michigan and city of Detroit income tax returns and payments due on April 15 are now due before midnight on July 15. Other state of Michigan cities with income taxes due on April 15 will now be due on July 15, while cities with income taxes due on April 30 will now be due on July 31.

CARES Act Tax Relief Provisions

The Coronavirus Aid, Relief and Economic Security (CARES) Act was passed by the Senate on March 25, 2020, and by the House of Representatives on March 27, 2020. At the time of this writing, President Trump announced that he has signed CARES into law. CARES provides a variety of provisions intended to grant economic relief. Many of the provisions provide tax relief to individuals and corporations. The following is based on the Senate version sent to the House.

The primary tax benefits for individuals include expanded deductions for charitable contributions, relief from early withdrawal penalties for amounts drawn from retirement accounts, relief from penalties for not meeting the minimum required distribution rules and income exclusion for payments from employers for educational expenses. These are in addition to the one-time rebates of $1,200 and $500 per child to individuals based on their income from 2019 tax returns, or in some cases, 2018 tax returns with income less than $99,000 for taxpayers filing as single.

The retirement plan early withdrawal penalty will not apply to distributions up to $100,000 for coronavirus-related purposes made on or after January 1, 2020. This penalty relief provision applies to anyone who contracted, or whose spouse or dependent contracted, the virus or lost work due to the business shutdowns. Income attributable to such distributions would be subject to tax over three years. Taxpayers withdrawing the funds may recontribute the funds to an eligible plan within three years without regard to that year’s cap on contributions. There are favorable loan provisions in CARES as well.

There are many relief provisions for businesses including a refundable credit for employee retention of up to 50% of the wages of certain workers against the FICA obligation of the employer and employee. The credit is provided on the first $10,000 of compensation, including health benefits paid to an eligible employee for the period from March 13, 2020 through December 31, 2020. The credit is available to employers whose: (1) operations were fully or partially suspended, due to a COVID-19-related shut-down order; or (2) gross receipts declined by more than 50% when compared to the same quarter in the prior year. Limitations apply to employers with 100 or more employees. There is no overlap with the tax credits under the Families First Coronavirus Response Act and an employer receiving a paycheck protection loan will not be eligible.

In addition to the employee retention credit, CARES defers payment of the employer share of the Social Security tax, relaxes the limitations on a company’s use of net operating losses, modifies the loss limitation applicable to pass-through businesses and sole proprietors, accelerates the ability of companies to recover those AMT credits, increases the 30-percent limitation on interest expense to 50 percent of taxable income, permits immediate write offs of costs associated with improving building facilities correcting the Tax Cuts and Jobs Act of 2017 providing for refund potential, and waives the federal excise tax on any distilled spirits used for or contained in hand sanitizer.

Many of these provisions have additional requirements and limitations. For more information, please contact a tax law professional.  Thank you to Warner Norcross Judd Tax Law Practice Group for this information.

Unemployment Guidance

Visit our covid resources page for more information on Work Share program, general HR guidance and Unemployment resources.


The owner of our company is considering us essential and reopening on 4/14. He has applied for a PPP. He wants to give employees the option to stay on unemployment if they are not comfortable returning to work. I don’t believe he is able to do this. Correct?​

Businesses are free to give their employees a choice, even if considered essential.

When a business takes out a paycheck protection program loan, technically they can use the proceeds for anything they want. To get that loan forgiven, in other words to make it so that they don’t have to pay it back, they need to employ the same number of people at the same rate of pay that they did before the COVID-19 crisis. They can also spend the money on rent, interest, and utility bills.  If they were to employ fewer people, the forgiveness on the loan would be prorated. Or, they could bring in new employees at the same rate of pay. It doesn’t have to be the exact same employee, but to maximize the amount of debt forgiven, they need to maintain the same headcount and the same rate of pay.

Anything they do not spend on qualified expenses converts into a two-year loan at 1%. Not a bad deal.​

As long as the business owner lays them off, they can file. Voluntary layoffs are not unusual. The only thing that would disqualify the employee from unemployment would be if they quit.

Employees applied for unemployment and already received their check but are interested in applying for the PPP. Do employees already on unemployment need to withdraw from unemployment in order to apply for PPP?

When they get approved for the loan, they will need to call their employees back and put them on payroll to qualify for the forgiveness. The employees should not terminate their unemployment until the business has been approved and received the money. They should not cancel unemployment ahead of the money coming through to add them to payroll.

Beginning March 29, 2020, please use the following guideline to file unemployment claims:

How do I communicate a layoff?

The American Society of Employers has a sample script you can use to speak with your employee(s).

If I have hourly employees that work various hours depending on the work load, how do I calculate their wages?

Whatever their regular rate of pay was before their hours were reduced due to coronavirus and then use the 2/3rd their regular rate that would be capped in the aggregate.

I have owners that are also employees but now cannot work remotely. Can they go on FMLA or are they exempt?

If the owners were reported on the quarterly report of wages they would pass the first qualification test. Secondly the UI applicant must be looking for and available for work. The emergency sick paid act local quarantine or isolation order requires employers to provide that benefit after all paid sick time off benefits apply.

If team members have already filed for unemployment and now should be FMLA, what process do I take to get them on the right path?

FMLA only matters for those with school age kids. For the rest of the employees, UIA is the only answer. I believe that leave of absence without pay is an internal designation. The unemployment filing does not delineate, so as long as your records show them as on leave, they should still qualify, even though they filed for Unemployment.

Can a sole proprietor file for unemployment?

Following are the general rules pertaining to eligibility for unemployment compensation. There may be exceptions or other available unemployment insurance programs that a sole proprietor my elect to participate in. Please contact Michigan’s Unemployment Insurance Agency for more information.

Michigan’s unemployment compensation law provides required coverage to workers that the employer reports on its quarterly wage report to the state.  Only workers reported (as required) are eligible for unemployment compensation benefits upon loss of work. Further, a worker that becomes unemployed and eligible for unemployment benefits must be searching for and available for work.

Sole proprietors that work under a legal corporation structure and are paid by that entity may be eligible for benefits if their wages are being reported (and taxed) under state and federal law and they otherwise qualify (meet the required benefit week and income eligibility level). Sole proprietors that are not reporting their wages  because as sole proprietors they are not necessarily required to do so would  not be eligible to receive benefits. Further, as stated above any claimant that may be eligible for unemployment benefits must also be searching for and available for other employment.  This may be a barrier to the owner that is dedicated to his or her own business while unemployed.

To summarize: 1. The business owner must be an employee of his or her company and have reported (and paid taxes) that they are being paid wages as an employee and 2. Be looking for and available for work. This would have to be work beyond work associated with their own business.

The State is also seeking solutions for self-employed workers and independent contractors who traditionally do not have access to unemployment insurance. The governor has requested that President Trump issue a Major Disaster Declaration so that Individual Assistance and Disaster Unemployment Assistance through FEMA may be made available to additional Michiganders affected by the COVID-19 pandemic.

Guidance Sheet for potential lay-offs

State Provides Guidance to Employers Contemplating Potential Layoffs

Under the Governor’s order, unemployment benefits would be extended to:

  • Workers who have an unanticipated family care responsibility, including those who have childcare responsibilities due to school closures, or those who are forced to care for loved ones who become ill.
  • Workers who are sick, quarantined, or immunocompromised and who do not have access to paid family and medical leave or are laid off.
  • First responders in the public health community who become ill or are quarantined due to exposure to COVID-19.

Under the order, an employer or employing unit must not be charged for unemployment benefits if their employees become unemployed because of an executive order requiring them to close or limit operations.

Families First Coronavirus Response Act/Family Medical Leave Act

Visit the U.S. Department of Labor for a comprehensive FAQ on the FFCRA.


Reopening your business

Can I send an employee home if they are not willing to wear required PPE? What are my rights as an employer? Would they qualify for unemployment?

The direct answer is yes you can send the employee home and tell them that wearing a face mask is a safety policy that must be complied with. If they refuse you may discipline or discharge them. HOWEVER, it is recommended you engage them in a short ADA discussion by asking them why they refuse to wear the mask. If they do not have a reason involving a disability, then you can let them go.

They will be eligible for UI benefits under current qualification guidelines. If however you want to protest the claim you may state they were discharged for not complying with safety requirements and rules. Be sure to document how the termination occurred. UIA will have to decide if failing to wear a face mask under current circumstances amounts to a major safety violation and amounts to a disqualifying reason or not.

Also keep in mind that UI benefits are not chargeable back to the employer under current rules.

With 10(e) in Executive Order 2020-77 allowing for a wider range of outdoor activities and with a recent FAQ limiting golf carts was removed after 2020-70 was issued, we asked about the use of carts. Here’s what we were told by the Department of Labor and Economic Opportunity:

They are allowed, but like with all outdoor recreational facilities there are mitigation measures that need to be implemented under section 11 (h). Additionally, clubhouses and dining halls in golf establishments are still closed under the public accommodation EO.

Health-Related HR issues

If one of our employees is quarantined, what information can we share with our employees? Who can we share it with?

If an employee is confirmed to have COVID-19, employers should inform fellow employees of their possible exposure to COVID-19 in the workplace. Employers should not, however, disclose to coworkers the identity of the quarantined employee due to ADA and HIPAA confidentiality requirements as well as local laws.

There are a number of variations of the issues raised above.  HR needs to consult with their legal counsel to ensure they are not violating any of the various laws.  With the expectation that the Coronavirus spread hasn’t peaked yet in the U.S., HR needs to be vigilant in advising managers not to do anything that would lead to liability during this time period.

Can an employer restrict travel to all locations under a CDC travel advisory?

An employer may restrict business travel. Employers should continue to consult the CDC’s website: “Coronavirus Disease 2019 Information for Travel” for up-to-date travel notices concerning risk.

Health Insurance

Will Blue Cross Blue Shield of Michigan and Blue Care Network allow employers to extend coverage to their employees who are affected during temporary closures or are temporarily laid off or have temporary reduced hours?

Yes, Blue Cross and BCN will allow extension of coverage for all group sizes provided premiums are paid based on current payment policies. Paying the premium is all that is required; no need to submit additional paperwork for current employees. The following would apply: • The employer still considers the individual an employee and therefore eligible for coverage under the group’s plan. • The employer maintains premium payments. • The employer should notify the employee that benefits would be maintained for a specified number of months. • If the employee does not return after the specified period, the group would proceed with the normal loss of coverage/termination process.

What is the standard employer premium payment grace period and are you making any changes to that policy?

Blue Cross and BCN will continue with our current grace periods – for fully insured customers this is a 30-day grace period. We recognize, however, that COVID-19 is rapidly changing our health care ecosystem and we will continue to assess our approach.

Will Blue Cross and BCN allow employers to modify open enrollment, new hire, reinstatement policies after returning from furlough?

Yes, Blue Cross and BCN will allow and is willing to waive waiting periods. Groups can re-add employees through the usual membership processes.

Will Blue Cross and BCN re-rate experience rated insured coverage or stop loss for changes in contracts or other fluctuations in eligibility that are driven by responses to the COVID-19 pandemic?

We realize that there may be several types of unique eligibility changes that occur in the near-term in response to COVID-19. To avoid creating concerns for our group customers we will place a temporary hold on our re-rating practices related to large changes in enrollment until further notice.

For customers that are experiencing a change in membership due to COVID-19, will Blue Cross and BCN allow the employer to self-adjust their bill?

Group customers or agents should not self-adjust the bill. Membership changes will automatically be applied in the group’s next billing cycle. If there is more than a 25% change in the group’s fully insured membership, groups should work with their managing agent or Blue Cross account representative before the due date.