Minnesota Small Business Relief Grant Application

Minnesota Small Business Relief Grant Application

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The Minnesota Legislature passed the Small Business Relief Grants Program. The program approved approximately $62 million for grants to Minnesota small businesses that have been impacted by the pandemic. 


The Minnesota Small Business Relief Grant Application went live yesterday, June 23, 2020. Businesses may apply for the $10,000 grant if the following are met:

  • Minnesota company with Minnesota owners.
  • Total business revenue between March 1, 2020 and May 31, 2020, declined by 10 percent or more as a result of COVID-19, compared to the same period in 2019.
  • Less than 50 employees.

The grant is based on a lottery system, and businesses do not need to attach any documents to apply. However, if you receive the grant, documentation will be required.

The application must be completed online and is available on the MN Employment and Economic Development Website.

Applications will be accepted until 5:00 pm on Thursday, July 2, 2020. Following the deadline, the state will conduct a lottery to determine which applicants will receive funds.

Additional information needed to apply:

  • Revenue between March 1, 2019 and May 31, 2019
  • Revenue between March 1, 2020 and May 31, 2020
  • Number of full-time employees and the number of part-time employees

Questions about the relief grant application?

Smith Schafer can help you leverage opportunities and make the best decisions for your company. For additional information and guidance, please contact us at [email protected].

PPP: New Interim Final Rules and Forgiveness Applications

PPP: New Interim Final Rules and Forgiveness Applications

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Updates brought on by the Paycheck Protection Program Flexibility Act

The SBA and Treasury have released new Paycheck Protection Program guidance and forgiveness applications.  This new material addresses changes brought by the Paycheck Protection Program Flexibility Act, including those to PPP loan maturity, deferral, and forgiveness.

Interim Final Rule on Revisions to First Interim Final Rule clarifies that spending 60 percent of PPP proceeds on payroll costs is not a cliff requirement.  Put differently, if a borrower spends only 59 percent of PPP proceeds on payroll costs, the borrower will receive partial loan forgiveness, rather than no loan forgiveness, as the text of the Flexibility Act suggests.

Consistent with the Flexibility Act, the Interim Final rule on Revisions to the First Interim Final Rule also provides that:

  • the covered period for forgiveness purposes is now the 24-week period after loan disbursement, or 8-week period, if elected; and
  • loan maturity is 5 years for loans made on June 5 or after, but remains 2 years for loans made before, unless borrowers and lenders agree to an extension (the date SBA assigns a loan number to the PPP loan is the date it is considered “made”).

Released separately, Interim Final Rule on Revisions to the Third and Sixth Interim Final Rules allows self-employed persons to reach complete loan forgiveness.  For self-employed borrowers with a 24‑week covered period, maximum forgiveness now matches their maximum loan amount.  Owner compensation replacement equal to 2.5 months’ worth of 2019 net profit (up to $20,833) may be forgiven.  For borrowers who elect the 8‑week covered period, forgiveness remains limited at 8 weeks’ worth of 2019 net profit (up to $15,385), which may fall short of the total amount borrowed.  For non-owner employees, the wage cap for the 24‑week covered period is $46,154 ($100,000 annualized for 24 weeks), rather than $15,385 for the 8-week covered period.  

The changes are borne out in updated forgiveness applications.  You can find Form 3508, 6/20 edition, here.  The application confirms that owner compensation for the 24-week covered period is capped at $20,833, rather than $15,385 for the 8‑week covered period.   It also provides that the FTE safe harbor restoration measurement date is the day when the forgiveness application is submitted, or December 31, whichever is earlier. 

The SBA also released a new Form 3508EZ, which is about half the length of the full version.  Borrowers that may use Form 3508EZ include those that:

  • are self-employed and have no employees;
  • didn’t reduce salary or wages of any employee by more than 25 percent during the covered period or the “alternative payroll covered period” (a concept we explored here) and who also didn’t reduce the number of employees or the average paid hours of employees; or
  • experienced reductions in business activity as a result of health directives related to COVID–19 and didn’t reduce the salaries or wages of their employees by more than 25 percent. 

Generally, the EZ application requires less math and less paperwork. Form 3508EZ’s instructions come in at only 4 pages, compared to the 7 pages for the non-EZ version.  As always, we expect more guidance and revisions.  

Minnesota Small Business Relief Grants

We are also monitoring Minnesota House File 5, which approves approximately $62 million for grants to small businesses.  Half of this amount will go to businesses outside the metro area. 

A business will be eligible if it is owned by a permanent resident of Minnesota, is located in Minnesota, employs 50 full-time workers or less, is in good standing with the secretary of state and department of revenue, and can demonstrate financial hardship as a result of COVID–19.  Eligible businesses may receive grants of up to $10,000 to use on payroll expenses, rent, mortgage payments, utility bills, and other similar business expenses. 

Certain businesses will have priority based on size or demographics.  At least $18 million must go to businesses that employ the equivalent of 6 full-time workers or less, at least $10 million must go to minority business enterprises, at least $2.5 million must go to businesses that are majority owned and operated by veterans, at least $2.5 million to businesses that are majority owned and operated by women, and at least $2.5 million must go to “operators of a privately owned permanent indoor retail space and food market that has an ethnic cultural emphasis having at least 25 tenants primarily comprised of businesses with fewer than 20 employees.” 

Grants will be approved on a lottery basis.  The application period will last no more than 10 calendar days.  Southern Minnesota Initiative Foundation will be administering a portion of these funds to businesses in this  region, though details are not yet available.


To learn more, visit the COVID-19 Resource section of our website or contact us at [email protected].

COVID-19 Relief for Accounting Standards

COVID-19 Relief for Accounting Standards

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Pandemic Relief for-profit and nonprofit entities

On June 3, 2020, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2020-05, bringing relief for both for-profit and nonprofit entities. The standard allows entities who have not yet issued their financial statements to DELAY the implementation of ASU 2014-09, Revenue Recognition from Contracts with Customers (ASC 606). 

Revenue Recognition

ASC 606 replaces virtually all accounting standards related to revenue recognition. It had been required for non-public entities to implement for years beginning after December 15, 2018, resulting in many entities already undergoing implementation. Note – early implementation of ASC 606 is allowed.

Revenue recognition case studies graphic

FASB had initially proposed ASC 606 be delayed for non-public franchisors only, due to technical issues related explicitly to franchisors. Citing the feedback FASB received, specifically the time and technical difficulties many entities faced to implement this standard, which was amplified by the current business environment due to the COVID-19 pandemic, FASB changed their stance.  

This new Accounting Standard DOES NOT affect revenue recognition changes related to nonprofits or any other entity receiving contributions. ASU 2018-08, Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made (ASC 958) had an original implementation date for years beginning after December 15, 2018, and this date remains. Many nonprofits will ultimately need to implement both ASC 606 and ASC 958 related to their revenue recognition. 

Nonprofits will now need to decide to early implement ASC 606 or spread the change over the next two reporting periods.

Lease Accounting

Also delayed by the new Accounting Standard, for all non-public entities, including nonprofits, was ASU 2016-02, Leases (ASC 842). The lease accounting rules will have a significant impact on companies’ financial statements leasing real property, equipment, vehicles, and other fixed assets. It requires entities to report most leases as both an asset and liability and has been an enormous undertaking for many entities. So much so, FASB had, in late 2019, delayed the effective date from 2020 year-ends to 2021 year-ends.  

Now the effective date has been pushed again, and non-public entities DO NOT need to adopt this standard until years beginning after December 15, 2021, resulting in a December 31, 2022, initial reporting date for year-end calendar entities.

Although these are welcomed delays for many entities (and a little late for others), it is important to remember these standards are NOT going away, and early implementation is available for both Revenue Recognition and Leases. Companies with a change in their revenue recognition calculations related to ASC 606, if not opting to early implement, can use this opportunity to calculate their ASC 606 revenue for the current year-end accurately. This will make the transition in the future easier. 

Entities that will have limited changes and obstacles in implementation can opt to early implement and continue to move forward with ASC 606. Since many entities have completed their December 31, 2019, financial statements, financial institutions, bonding companies, investors, grantors, etc. have become familiar and knowledgeable of this standard. Each entity’s situation is different, and we are here to help guide you through these options and any potential changes.  

Business in the Post-Coronavirus World

Business in the Post-Coronavirus World

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As we slowly start to transition into reopening, many business owners are anticipating significant changes—a new normal. While no one can know how things will turn out, we want to spend some time discussing what the post-coronavirus business world might look like.

What reopening may look like for businesses?

Because of the U.S. government’s governing system, reopening will look quite different—and take place on a different schedule—from one state to another. It will certainly not be like a light switch just flicking back on. Instead, the reopening process will be long and slow, with businesses or services phased in at different times, based on government-guided criteria. Even after the reopening begins, it is a definite possibility that we will experience a second wave of infections. If this occurs, it will likely impact government reopening policies, perhaps even causing the reopening to recede for some time.

How will the workplace look different after post-coronavirus?

There are several areas where a permanent change to the workplace is a definite possibility. These are what we see as some of the likely impacts of the coronavirus pandemic on businesses:

Health & Safety Measures

Companies will need to make safety and cleanliness highly visible in the wake of the pandemic. Business owners and managers should make firm plans for making their place of work more secure for both workers and clients.

Demands for Work Flexibility

As a result of the pandemic, workplace flexibility that was previously considered impossible has been demonstrated to, in fact, be quite possible. This means many employees may call for a continuation of the flexible hours and remote work options they have had for the last few months. Some employers might find the financial benefits of continuing to allow their teams to work from home are well worth it.

Scheduling Policies

If you have not already considered how you might space out your employees once the workplace reopens, now is the time to make a plan. Some employers are implementing split shifts to have fewer people in the office at once. The future may hold fewer jobs with the regular 9-to-5 hours to which many are accustomed.

Demand for Hazard Pay & Sick Leave

The legislation of family and sick leave policies during this pandemic may have a lasting impact. Because a situation such as this is a reality, employees may start to seek employers who put a higher emphasis on policies, including strong leave policies and hazard or premium pay. Employees with particularly high exposure risks (e.g., workers in retail, restaurants, and other service areas) are more likely to demand increased compensation during uncertain times.

We are in uncharted waters, but we are not without direction. In this environment, it is vital to have the right support. While we do not know precisely how the new business world will look, as the U.S. slowly reopens, a clearer picture will start to form. We encourage you to reach out to your Smith Schafer advisor to discuss what you can do to get your business on the firmest footing possible as you approach returning to the workplace. 

Payment Protection Program Flexibility Act of 2020

Payment Protection Program Flexibility Act of 2020

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Yesterday, June 3, the Senate passed the Paycheck Protection Program (PPP) Flexibility Act. This Act makes several significant revisions to the PPP, initially created in the CARES Act. See critical provisions below.


  • Extension of the time to use funds for eligible expenses from eight weeks to the earlier of 24 weeks or December 31, 2020.
  • Reduction in the percentage of qualified expenditures that must be used on “payroll costs” from 75% to 60%. However, the 60% requirement is a cliff requirement; if the borrower does not spend at least 60% of the loan proceeds on “payroll costs,” the loan forgiveness will be zero.
  • Delay in the measurement date for the safe harbor on employee headcount from June 30 in the Cares Act to December 31.
  • Increase repayment term for any remaining loan after forgiveness from two years to five years. However, this will only apply to loans issued on or after the date of the PPP Flexibility Act, unless mutually agreed to by the borrower and lender.
  • Provides an exemption from the loan forgiveness reduction related to employee headcount based on employee availability to fill open positions.
  • Provides an exemption from the loan forgiveness reduction related to employee headcount based on the inability to return to the same level of business activity as the business was operating before February 15, 2020, due to compliance with requirements established or guidance issued by various government agencies related to COVID-19.
  • Changes the loan payment deferment period from six months to the date on which the Small Business Administration remits payment to the lender for the loan amount forgiven.
  • Implements a filing deadline for the loan forgiveness application of 10 months from the end of the covered period.
  • Provides that PPP borrowers are eligible to defer deposits of the employer Social Security tax (6.2% tax) on employee payroll through December 31, 2020. Under the Cares Act, PPP loan forgiveness recipients were ineligible. The deferred deposits are due 50% by December 31, 2021, and the remaining 50% by December 31, 2022.

Questions about how this will affect your business?

Contact us today! Smith Schafer can help you leverage opportunities and make the best decisions for your company.

FASB Delays Revenue Recognition and Leasing Standards

FASB Delays Revenue Recognition and Leasing Standards

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Financial Accounting Standards Board (FASB) voted to delay the effective dates of revenue recognition and leases standards

Following last month’s proposal to defer the effective date of two standards for private companies and nonprofit organizations, the Financial Accounting Standards Board (FASB) voted to delay the effective dates of revenue recognition and leases standards on May 20. The standards extension comes as a response to complications caused by the coronavirus pandemic.  

This is not the first time that the effective dates for revenue recognition have been extended. The revenue recognition standard was initially supposed to go into effect in 2017 for public companies and 2018 for private companies. In 2015, FASB extended the effective dates to 2018 for public companies and 2019 or 2020 for nonprofits (varies with the nonprofit’s reporting period).

Similarly, lease standards have also been delayed prior to this year. While the standards took effect for public companies at the beginning of last year, FASB had already delayed the effective date for private companies and nonprofits to the beginning of 2020. Now the leases standard for private companies and nonprofits will be effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022.