3 Things We Think All Philadelphia Family Child Care Providers Should Know During the COVID-19 Crisis
By the Family Child Care Coalition (FC3)
This information is changing quickly. Stay tuned for updates. Last updated 4-15-2020
1) You Likely Qualify for Unemployment, But It Will Take A While
Early on we heard that family child care providers wouldn’t qualify for unemployment unless their state had ordered them to close. However, we now hear that providers are eligible even if they chose to close or remain open but with substantially lower enrollment.
Currently Pennsylvania is telling newly eligible groups like family child care providers not to apply using the online or phone based systems for regular unemployment (UI). Providers will be eligible for a new program called Pandemic Unemployment Assistance (PUA). Pennsylvania has create an FAQ about this new benefit but does not have an application page available yet. We are following this situation closely and will provide an update as soon as we know more. Assistants and other employees should apply now. If you set up your child care as a corporation from which you draw a salary, you can apply through the online or phone systems.
Unemployment checks for self-employed providers will be based on the income you reported on your last tax return, or they will produce an estimate if you have not filed in recent years.
The CARES Act, signed on Friday March 27th, adds an additional $600 a week to your unemployment check for 39 weeks. Expect your weekly check to equal roughly 50% of your average weekly income + $600 dollars. Even if you file for income reduction (because of lower enrollment), you will still be eligible for the full $600 dollars. This is a huge, never-before-seen benefit that you don’t want to miss out on. The $600 bonus pay will not impact your eligibility for CHIP or Medicaid. It is unclear how this benefit will impact TANF and SNAP payments.
These rules have changed quickly and you may be denied your claim. If so, you can appeal. Because so many people are applying for UI right now, you will likely not get your first check for a month or more from when you are able to file your claim. Once you start filing continue to do so bi-weekly, even if you haven't received a check yet. Your unemployment will be back paid.
2) Talk with Your Creditors Before Taking on Debt to Pay Bills
What should you do if you need money faster than an unemployment check will arrive? Especially before taking out a loan, talk to your bill collectors (your mortgage holder/landlord, car note, utility providers, credit card companies, etc.) and see who can work with you. Many companies are deferring payments, offering special discounts, or other solutions. You may need to say specifically that you cannot pay right now due to a loss of income because of COVID-19.
3) Apply to all the Grant and Loan Programs that Meet Your Needs
Private charities, the city of Philadelphia, the state, and the federal government are all offering grants and loans to small businesses right now. These programs are each different, and it can get confusing. We’ve listed some of the programs we think are most helpful for providers below.
Providers should apply for all the programs that seem like they could be helpful to your business. Think of it as comparison shopping. It’s similar to how you might try to find the best deal on a car loan. Once you get grant and loan offers, you’ll pick and accept funds from the program that offers the best benefit to you. Be careful accepting multiple loans. Just like you can’t take out two different loans to buy the same car, you won’t be able to participate in two loan programs to cover the same business expenses.
Grants and Loans Available Now
The Philadelphia Emergency Fund for Stabilization of Early Education (PEFSEE)Tiered grant awards are available to provide immediate relief to eligible organizations with operations located in the city of Philadelphia. Family child care providers are eligible for grants of up to $5,000. Group providers are eligible for grants of up to $7,500.
Philadelphia COVID-19 Small Business Relief Fund – Micro-enterprise grant
A $5,000 grant for businesses in Philadelphia with under $500,000 in annual revenue. Among other requirements, this program prioritizes businesses that have lost 50% of more of their revenue due to COVID-19.
Economic Injury Disaster Loans (EIDL)
Providers are eligible for EIDL loans. Additionally as part of the process to request the loan you can request an advance on that loan, in the form of Emergency Grants. You should still apply for these grants although payments are not being made as quickly as initially promised. These emergency grants do not need to be repaid. Emergency Grants offer an advance of up to $1,000 per person to maintain payroll, provide paid sick leave, meet increased costs to obtain materials, make rent or mortgage payments, and/or to repay obligations that cannot be met due to revenue losses.
The PPP is a loan backed by the federal government, most or all of which does not need to be paid back as long as 75% of the money is spent on wages. The profit you report in your taxes will be used to calculate your monthly wage. You can receive 2.5 this amount or more if you have assistants on payroll. Contact your bank to apply. Many providers have been turned away from this loan program because they do not have business bank accounts with their bank or they have low credit scores. This is a decision made by individual banks, not a rule from the federal government. Tom Copeland has some good suggestions about how to fight back if you are denied.
Do you know about a program not listed here, that could benefit Philadelphia child care providers?
Does any of this info need to be updated? Please contact us at: email@example.com