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The CARES Act Provides Relief for Small Business

About 70% of small businesses have applied for assistance under the Coronavirus Aid, Relief, and Economic Security Act (CARES). Although the $349 billion fund is officially out of money, Congress is currently debating an expansion of the program that’s expected to receive approval later this week.

* If you missed the opportunity to apply for the initial round of relief, you should prepare your application now so you can file it when additional funds become available as loans are approved on a first-come, first-served basis. Start your Application


The act and associated programs were created to assist individuals and business owners during this time of uncertainty. Two of the resources involved are meant to provide cash-flow assistance to affected businesses:


* Paycheck Protection Program (PPP) – this program was set up to provide small businesses with cash-flow assistance through 100% federally guaranteed loans to employers who maintain their payroll during this emergency. If employers maintain their payroll, the loans would be forgiven (more on this below).


* Emergency Economic Injury Grant – this grant is meant to provide a quick infusion of a smaller amount of cash to cover more immediate business needs.

Many small and independent businesses may qualify for relief under the PPP by applying for a loan through a bank/lender.


PPP features include forgiveness of up to eight weeks of payroll based on employee retention and salary levels, no SBA fees, and at least six months of deferral with maximum deferrals of up to a year.


Small businesses and other eligible entities will be able to apply if they were harmed by COVID-19 between February 15, 2020 and June 30, 2020. This program is retroactive to February 15, 2020, to help bring workers who may have already been laid off back onto payrolls. Loans are available through June 30, 2020.


The government’s additional qualifications for these loans are as follows:

· Businesses and entities must have been in operation on February 15, 2020.

· Small business concerns, as well as any business concern, a 501(c)(3) nonprofit organization, a 501(c)(19) veterans organization, or Tribal business concern described in section 31(b)(2)(C) that has fewer than 500 employees, or the applicable size standard in number of employees for the North American Industry Classification System (NAICS) industry as provided by SBA, if higher.

· Individuals who operate a sole proprietorship or as an independent contractor and eligible self-employed individuals.

· Any business concern that employs not more than 500 employees per physical location of the business concern and that is assigned a NAICS code beginning with 72, for which the affiliation rules are waived.

· Affiliation rules are also waived for any business concern operating as a franchise that is assigned a franchise identifier code by the Administration, and company that receives funding through a Small Business Investment Company.


How can you use the funds?

Businesses can use the funds obtained through the PPP program for a variety of business-related costs including:

· Payroll costs

· Costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums

· Employee salaries, commissions, or similar compensations

· Payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation)

· Rent (including rent under a lease agreement)

· Utilities

· Interest on any other debt obligations that were incurred before the covered period.


How do you get forgiveness on the PPP loan?

To qualify for forgiveness of your loan, businesses must apply through a lender. Your application must include:

· Documentation verifying the number of employees on payroll and pay rates, including IRS payroll tax filings and State income, payroll and unemployment insurance filings

· Documentation verifying payments on covered mortgage obligations, lease obligations, and utilities

· Certification from a representative of your business or organization that is authorized to certify that the documentation provided is true and that the amount that is being forgiven was used in accordance with the program’s guidelines for use.


How do you apply?

All current SBA 7(a) lenders are eligible lenders for PPP. The Department of Treasury will also be authorizing new lenders, including non-bank lenders, to help meet the needs of small business owners. Contact us or for more information this program. We are accepting applications now. Start your Application


The Coronavirus pandemic is a significant business challenge for small business. We hope the information contained in this article will help you overcome the hardships and challenges to your business and its employees. While the immediate future is still uncertain, we remain committed to helping you emerge from this crisis and resume business as quickly as possible.


While we’ve done our best to compile an accurate overview of the CARES Act, we are not and cannot offer legal advice. The guidance provided in this article should be viewed as informational only. Before acting on it, you may want to consult with a financial or legal professional.

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