From promises of healing elixirs to email scams, the uncertainty of the Coronavirus pandemic has proven to be a breeding ground of exploitation and misinformation. When every news cycle brings more fresh concerns and shifting timelines, it is important for people and business owners to have clear facts and resources to help them navigate a path toward a new normal. Read on to debunk some of the circulating myths and misinformation.
Myth: Can you trust every lender for the Paycheck Protection Program small business loan?
Since the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was passed in late March, many small businesses are eager to apply for much needed funding to keep their business afloat. With $376 billion allocated for American workers and small businesses, fraud rates for the U.S. Small Business Administration (SBA) loans are expected to be $10-20 billion according to Inc. magazine interviewee, Hicham Oudghiri, co-founder and CEO of Enigma. Small business owners and sole proprietors have become vulnerable targets for scammers. Here are three red flags to look for when applying for an SBA loan:
- Calls or emails asking for any personal information
- A company or agency ensuring a faster loan process for a fee
- Being approached by an unknown lender. Use a traditional SBA lender or a federally backed bank or credit union.
Myth: The Paycheck Protection Program can be used for any cost related to your business
The Paycheck Protection Program loan’s primary focus is to help bridge costs for employer payroll to prevent any employee layoffs or furloughs. Payroll is one of the largest business costs. If you use 75% of the PPP loan for payroll, up to 25% of the loan may be used for other costs related to your business—which may allow this loan to be forgiven.
Myth: Everyone will get a $1,200 check from the government
The CARES Act released $300 billion for individuals, married couples and families. Here is the breakdown:
- Individuals making $75,000 or less a per year are eligible for a one-time payment of $1,200; married couples earning less than $150,000 (combined) are eligible for one $1,200 check per person
- Adults with dependent children are eligible for a one-time payment of $500 per child that is 17 years old or younger
Here’s who receives less than a $1,200 check:
- Individuals earning between $75,000 and $98,999
- Married couples earning between $150,000 and $197,999
Here’s who is not eligible for stimulus checks:
- Individuals earning more than $99,000 and married couples with a combined income of more than $198,000
Myth: COVID-19 testing will cost thousands of dollars
Since the Families First Coronavirus Response Act (FFCRA) was passed in mid-March of 2020, this allows for no-cost-sharing under an employee-sponsored group insurance plans and some individual coverage for those who qualify for Medicare/Medicaid. Even though initial diagnostic testing may be free for most, medical treatments related to COVID-19 have a cost. Individuals may be covered for treatment costs under insurance policies or may have to pay out-of-pocket. Look into your company’s insurance policies to help inform your staff about health costs associated with COVID-19.
Myth: Once you’ve tested positive for the Coronavirus, you can’t get it again
According to TIME, the World Health Organization is investigating patients who have tested positive for the COVID-19 after recovery. As the outbreak evolves around the world, experts are still learning about the immune response from the virus.
Myth: There is no “true” information during the COVID-19 pandemic
For on-going updates on about the COVID-19 outbreak and what it means for your business, check out these trusted sources for more information: