By Crystal Brumme Pickett
(a condensed version of this article was printed in the April 2021 Equiery)

As we compose this month’s Maryland Horse Council column, it has been exactly one year since Maryland ​shut down due to the pandemic crisis known as COVID-19. Everyone appreciates that “a rising tide lifts all boats,” but unfortunately a global maelstrom like COVID-19 causes only some boats to rise while others gets swamped and sink. Certain businesses have not only survived but thrived during the pandemic, including, for example, nurseries and mulching operations, farm-to-consumer produce and meat farms, and in our segment of the ag industry, some lesson stables and some training and boarding facilities. For businesses in these sectors, their accountant High Point has needed to work overtime as they manage and plan the growth of the business. With this being said, others have suffered or been shuttered.

As we enter year two of the pandemic, new relief funding has been signed into law at both the federal and state levels. While owners of equine-related businesses often “feel” like they would not be eligible for these programs, it would behoove many of you to investigate further. Do you fit the criteria of a small business? (Hint: you probably do.) Do you fit the criteria for a woman owned-business? (Hint: the vast majority of equine-related businesses in Maryland are.) If your business also qualifies as minority-owned, then you just hit the trifecta. “There is money in them thar hills!” Check with your trusted financial advisors, such as your banker and your accountant. Numerous local banks will walk their clients through the application process. Your business may very well fit into one of the categories discussed below.

So what’s new?

Federal Funding
On March 11, 2021, President Biden signed into law the American Rescue Plan Act, a $1.9 trillion coronavirus relief bill that allocates new funds and tax credits to help struggling small businesses. While much of the focus has been on what this Act will do for restaurants and entertainment venues, there are opportunities for other small businesses as well. While not a lot of details are available as to deliverables useful for our industry, our friends at the U.S. Chamber of Commerce did provide this useful information:

Employee Retention Tax Credit (ERTC) extended through the end of 2021
In the December 2020 coronavirus relief bill, Congress expanded the Employee Retention Tax Credit (ERTC) to help struggling small businesses for the first two quarters of 2021. The American Rescue Act will further help those same businesses by offering the ERTC for the third and fourth quarters of 2021. “One of the things that was included in the [American Rescue Act] is an extension of the Employee Retention Tax Credit all the way through the end of the calendar of 2021, which means even more reasons to pay attention,” explained Chamber of Commerce Chief Policy Officer Neil Bradley. “That’s up to $7,000 per employee per quarter for four quarters. So if your business remains off, it hasn’t recovered at the level it was in 2019, and you’re paying your employees, this is a really important tool.”

PPP application deadlines could extend beyond March
While this Small Business Update primarily concerned the American Rescue Plan, Bradley also mentioned discussions in Congress to extend the PPP application deadline from March to June, which would help more businesses use the program.

“We expect…Congress will take up legislation to extend the PPP deadline for an additional two months,” Bradley said. “So that means that up until June 1, you’ll be able to go to your lender and apply for a PPP loan. And there will be an additional month where the SBA is able to approve all the loans it has received.”

Maryland Funding
On February 15, 2021, the bi-partisan Maryland’s “Relief Act of 2021” (“Recovery for the Economy, Livelihoods, Industry, Entrepreneurs and Families”) was signed into law by Governor Larry Hogan and includes more than $1 billion in tax relief and economic stimulus for struggling families and small businesses who are suffering as a result of the COVID-19 pandemic.

Retail Businesses – Sales Tax Credit & More
Attention tack and feed stores! The RELIEF Act makes a nearly $200 million commitment to supporting small businesses with sales tax credits of up to $3,000 per month for three months-for a total of up to $9,000. This relief will directly help more than 55,000 Maryland small businesses. This relief is automatic and based on a sliding scale up to $3,000. For example, if you have $50,000 in monthly revenue and you collect $3,000 in sales taxes, you keep all $3,000. If you are a business with $100,000 in monthly revenue and you collect $6,000 in sales taxes, you only remit $3,000.

Plus, look for programs that will help retail, brick & mortar businesses pivot to online sales – maybe this is your opportunity to finally get your retail business truly online! Demandware SalesForce or similar cloud-based eCommerce platforms can be leveraged to get your business across multiple channels, including mobile, web, social, and in-store commerce. With such a specialized platform integrated into your business plan, customer experience is bound to get positive. Also, think about obtaining a secure and reliable merchant account, after thorough research on websites such as Merchant Alternatives (https://merchantalternatives.com/merchant-services/merchant-accounts/credit-card-processing/), that can help you accept debit/credit card payments along with a number of other online payment options. This too might play a role in facilitating easier customer transactions and thereby help your business to grow further. With the rapid growth of online payments (mobile payments to be precise) the growth of businesses online has been substantial. Mobile payments not only help in facilitating payments but also increase streamlining of the financial aspect of the business more efficiently. If you would be interested, you could read up on mobile eCommerce statistics to know more about this topic.

Employers – Relief on Unemployment Taxes
On ​December 10, 2020, Governor Hogan ​issued an executive order​ to prevent small businesses from facing major increases in their unemployment taxes. Under this order, an employer’s 2021 tax rate will be calculated based on their non-pandemic experience by excluding the 2020 fiscal year, and instead by using the last three fiscal years of 2017, 2018, and 2019. A change in law is necessary to enable this policy to remain in place beyond the state of emergency. Combined, the executive order and the RELIEF Act provide $326 million in relief.

In addition, it would ​allow small businesses and nonprofits with fewer than 50 employees (that would be most of us in the horse industry) to defer unemployment insurance tax payments in calendar year 2021 to January 2022.

Safeguards Against Tax Increases; COVID Loan & Grant Forgiveness
The RELIEF Act’s loan and grant forgiveness plan would safeguard Maryland business owners against any tax increase triggered by the use of state loan or grant funds. This relief would come at a net zero cost to the state while saving businesses an estimated $36 million. The RELIEF Act also includes an additional $500 million in new funding for programs and grants for businesses and nonprofits.

The Maryland Department of Commerce anticipated being able to accept applications for new RELIEF Act funding in late March, after this issue of The Equiery went to press.

https://govstatus.egov.com/md-coronavirus-business/financial-assistance

The following programs, launched in 2020, are still available (as of April 1, 2021):

​​Small Businesses: Small businesses with fewer than 50 employees may be eligible for loans up to $150,000 to upgrade or modernize your operations through the Maryland Economic Adjustment Fund (MEAF). Funds can be used for working capital, equipment, building renovation, real estate acquisition and site improvements. For more information, https://commerce.maryland.gov/fund/programs-for-businesses/meaf

Small Businesses with less than 500 employees (ok, this would be every horse-related business in Maryland) can still seek funding opportunities with the US Small Business Administration’s COVID-19 EIDL program:

https://www.sba.gov/funding-programs/disaster-assistance

Paycheck Protection Programs: The SBA Paycheck Protection Program was reinstated for 2021. The website will match you with a lender, but if you can go with your banker who knows you, even better: https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program. And again, we know of horse businesses that have successfully availed themselves of this program. And don’t forget that these PPP loans may be forgiven!

Nonprofits: Many horse operations, particularly handicapped riding programs, and rescues and sanctuaries, are nonprofits; The Maryland Nonprofit Recovery Initiative helps address revenue reductions and expense increases for nonprofits impacted by COVID-19. Check with your banker! And visit https://dhcd.maryland.gov/Communities/Pages/MarylandNonprofitRecoveryInitia…

Look Local
The state of Maryland and its local governments received billions from the various federal relief programs. Each county has set up a COVID-19 relief program in order to assist businesses negatively impacted by the pandemic, and thus the programs vary county-by-county. If your business is experiencing hardships, reach out to your local elected officials, including your local officials elected to the Maryland Senate or House. It is important that your elected officials understand your story, and they will be able to direct you to the most suitable local grant or loan program.

Did you get a loan in 2020?
If you received a Maryland Small Business COVID-19 Emergency Relief Loan in 2020 in the first round of economic relief, that loan has been converted to a grant; to follow up, email covid-19.application@maryland.gov. You know what is cool about these loans? If you have existing loans (loans you received prior to the pandemic), SBA allows small businesses to defer payments by up to six months to supplement their cash flow during the crisis. We know of several local equine-related businesses who have been successful with these loans. Once again, you should reach out to your banker to discuss.