The United States Congress recently passed the “Coronavirus Aid, Relief, and Economic Security Act” (the “CARES Act”). This legislation is intended to help American businesses during the COVID-19 outbreak. The CARES Act allocated approximately $349 billion for assistance programs for small businesses. An overview of these programs is available here. Below are additional resources on the programs. You may be entitled to apply for relief, but should act quickly.
Eligibility
All businesses, nonprofit organizations, and veterans’ organizations with fewer than 500 employees are eligible for loans under the Small Business Administration (SBA) programs established by CARES. Self-employed individuals, independent contractors and sole proprietors also are eligible. Some businesses with more than 500 employees are eligible if they meet the SBA's size guidelines for certain industries.
Paycheck Protection Program (up to $10 million):
SBA's Paycheck Protection Program (PPP) makes loans available for small businesses for the purpose of keeping employees on payroll. There is a max cap of $10 million for loans. Loans will bear a 1% rate and have a maturity date of two years. SBA will forgive the loans if the business keeps all employees on payroll for eight weeks and 75% of the forgiven funds are used for payroll.
Loans are available starting Apr. 3rd for small businesses and sole proprietors, and Apr. 10th for independent contractors and self-employed. The deadline to apply is June 30, 2020, however applicants are advised to move quickly before the $349bn is absorbed. Small businesses have already applied for billions in loans under this program.
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