The COVID-19 pandemic has caused problems all around the world, and Alaska, despite its relative remoteness, has not been spared. The lives of both individuals and businesses in the Last Frontier State have been impacted by the pandemic and the economic downturn that has accompanied it. During and after this crisis, consider working with a financial advisor as a way to plan your future and make sure you are protected against future economic downturns.
Alaska Coronavirus Relief for Individuals
The Alaska legislature passed a bill at the end of March that included a number of measures aimed at providing relief for individuals impacted by the crisis.
Alaskan landlords cannot evict a renter for failing to pay rent as long as the person responsible for payment has been negatively impacted financially by the pandemic. Similarly, a utility company cannot turn off a service and a bank can’t foreclose on a house. The person who owes the money will eventually have to pay, and they must sign a sworn statement that they’ve been negatively impacted by the crisis. Car, truck, boat and plane repossessions have also been suspended. This measure lasts through June 30.
Alaskan businesses cannot raise the price of a good more than 10% from what they charged before the governor declared a state of emergency on March 10. This excludes fuel.
Some state tax deadlines have been moved to July 15, following the example set by the IRS for federal tax returns.
Alaska Coronavirus Relief for Small Businesses
Alaska also has programs in place to help small businesses that have been impacted by the financial downturn.
Alaska Economic Stabilization Team
The state has a task force dedicated to helping protect Alaska’s economy. There have been no concrete plans to come out of this task force yet, but it continues to meet.
Alaska Industrial Development and Export Authority Loan Guarantee Program
The AIDEA created a loan guarantee program for businesses borrowing money to make it through the crisis. $50 million is available right away and, subject to authorization, the cap will increase to $1 billion. The program will cover up to $1 million per borrower, working with banks and lenders in Alaska.
Federal Programs for Individuals
The federal government is also helping people deal with the hardships caused by the economic crisis and pandemic. The program getting the most attention is the personal stimulus checks most Americans are getting. These checks were authorized as part of the CARES Act, which became law in March. The program is means tested, so the amount of money you get is dependent on how much income you claimed on your last tax return.
The maximum check for an individual is $1,200, while married couples filing taxes jointly can get up to $2,400. Those amounts are for individuals earning less than $75,000 and married couples earning less than $150,000. Your check amount goes down as your income goes up, with the program cutting off at $99,000 for individuals and $198,000 for couples. Many people have already gotten their checks, while some will be delayed for a few weeks.
The CARES Act also enhanced unemployment benefits got anyone who loses a job due to this crisis. This includes 39 weeks of guaranteed unemployment payments, 13 weeks more than most states guarantee, plus a $600 federal booster for unemployment checks through July 2020. Paid sick leave for anyone who misses work because of the crisis is also included.
Federal Programs for Businesses
The federal government is also looking to help businesses impacted by the pandemic and economic crisis. The most notable program is the Paycheck Protection Program, which allows businesses with less than 500 employees to borrow up to 2.5 times their payroll (deducting excess salary over $100,000 for any employee earning more than that), with a $10 million maximum loan. These PPP loans are guaranteed at 100% by the Small Business Administration. They are also forgivable for the equivalent of eight weeks of payroll, mortgage interest, rent and utilities, provided a firm’s full time headcount and payroll stay the same as they averaged between February 15, 2019 and June 30, 2019 (January 1, 2020 and February 15, 2020 if the business was founded this year.) That means this amount essentially becomes a grant if these provisions are met. The initial money set aside for PPP loans has been used up, but an additional $310 is expected to be available soon. You will be able to apply for these loans through a local PPP lender.
Another option are Economic Injury Disaster Loans (EIDL). These loans, administered by the SBA, are for up to $2 million and are available in any area where an economic disaster has been declared. The interest rate is 2.75% for nonprofits and 3.75% for businesses. The loan term can be for up to 30 years. The well for EIDL loans has also been run dry, but you can apply here as new funds will soon be available.
Anyone with an existing SBA loan will be getting automatic debt relief for six months. During this time all payments including principal, interest and fees will be covered by the SBA. Check with your lender to see if this applies to your loan.
Express bridge loans are available to help a business that has been granted an EIDL make it until that money comes in. The EIDL is then used to pay back the express loan. Apply for an express loan with a local lender.
All existing loan options, including 7(a) loans, express loans, 504 loans, Community Advantage loans and microloans, are still available.
The Bottom Line
Alaska has not been immune from the COVID-19 pandemic, and neither have its families and businesses. The state and the federal government, though, have programs available to help make sure the state’s residents can get through as smoothly as possible. Consider all your options to help yourself.
Tips for Business Owners During the Coronavirus Crisis
- Many financial advisors specialize in working with business owners. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in five minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
- For a comprehensive list of the programs available to small businesses, check out our guide to coronavirus relief for small businesses.
Photo credit: ©iStock.com/bgblue, ©iStock.com/Chilkoot, ©iStock.com/Oleksii Liskonih