Special Issue: CARES Act of 2020
I wanted to give you a short summary of the C.A.R.E.S (Coronavirus Aid, Relief and Economic Security Act) so that if your business is affected by this horrible pandemic, you may be able to get some financial help.
There are two types of disaster aid, one is the Economic Injury Disaster Loan (EIDL) and one is the Paycheck Protection Program (PPP);
Economic Injury Disaster Loan :
This aid is for the covered period from January 31, 2020 – December 31, 2020, and is available to businesses with not more than 500 employees and any individual who operates under a sole proprietorship, with or without employees, or an independent contractor. There are other entities that are covered, but I have not addressed them as they don’t apply to my clients.
This aid is to be used to:
- provide paid sick leave to employees unable to work due to the direct effect of the COVID-19 virus;
- maintaining payroll to retain employees during business disruptions or substantial slowdowns
- meeting increased costs to obtain materials unavailable form the applicant’s original source due to interrupted supply chains;
- making rent or mortgage payments and
- repaying obligations that cannot be met due to revenue losses.
Upon verification, by the SBA (Small Business Administration) you may be eligible for up to a $10,000 advance to your loan. According to Section 1110 of this act “An applicant shall not be required to repay any amounts of an advance provided under this sub-section, even if denied a loan under 7(b)(2) of the Small Business Act.”
There is $10,000,000,000 allocated for this aid, so that means that if every business qualified for the $10,000, there would be 1,000,000 businesses that this aid would help. Since there are probably many times that many businesses in the US, TIME IS OF THE ESSENCE . If you qualify for this, please apply NOW . The funds will likely run out well before the December 31 deadline.
This loan is given and administered by the Small Business Administration
Payroll Protection Plan:
You will need to apply for the EIDL before you can apply for this aid. As of the date of this post, this program is not in full operation.
- You can apply for up to 2.5 times your average monthly payroll over the last 12 months.
- This program is 100% forgivable if you maintain your full-time employee levels through June 30, 2020
- You will need to spend the money on payroll, commissions or similar compensations, payroll taxes, health insurance, utilities, rent, or business loan interest
- Any monies used to cover other expenses will be converted to a loan that will not exceed 4% interest.
These loans will be given and administered by any bank that is an SBA lender. The SBA guarantees these loans 100%, so any default will be covered by the SBA, at no risk to your bank.
This obviously is only a short summary. Below, I am providing links to apply for the loans, as well as other informative sites.
If there is anything that I can do to help with applications, please call me.
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