The CARES Act - What Small Business Owners Need to Know

The new Cares Act has a lot of great information and tools that small business owners can use to help survive and maintain employees during these difficult times.  There are 3 specific options that are discussed in this video.  For more detailed information, click here.  These options include...

  • The Payroll Protection Plan (PPP)
    • Who Can Access This?
      • Small businesses in operation as of 2/15/20 with fewer than 500 employees (or are a business that operates in a certain industry and you meet the applicable SBA employee-based standars for that industry) and either had employees for whom you paid salaries and payroll taxes or paid independent contractors, as reported on a Form 1099-MISC.  (You are also eligible if you are an individual who operates under a sole proprietorship, as an independent contractor, or eligible self-employed individual - there are additional requirements if you are in this category).
      • And, you are either of the following...
        • A small business concern as defined in section 3 of the Small Business Act (15 USC 632), and subject to SBA's affiliation rules under 13 CFR 121.301(f) unless specifically waived in the Act.
        • a tax-exempt nonprofit organization described in section 501(c)(3) of the Internal Revenue Code (IRC), a tax-exempt veterans organization described in section 501(c)(19) of the IRC, or a Tribal business concern described in section 31(b)(2)(c) of the Small Business Act
    • How Much Can You Get? 
      • A payroll-based calculation based on your average monthly payroll of a certain specified time period (based on your specific business) multiplied by 250%.  The maximum loan amount is $10,000,000.  More information on the calculation can be found here.  
    • Any Forgiveness Options?
      • Certain portions of the proceeds that are used for certain types of expenses are forgiven under this loan.  The remaining portion will be wrapped into a loan with a 2-year maturity (with a 10-year maximum) and a 1% interest rate.
    • Other Information
      • This is First-Come-First-Served
      • Payback begins 6 months after the funds are disbursed to you (interest accrues during this time).
  • Economic Injury Loans/Grants
    • Who Can Access This?
      • All SBA qualified small businesses and cooperatives with 500 or fewer employees.
      • Private Nonprofit Organizations
      • ESOPs with fewer than 500 employees
      • Independent Contractors
      • Sole Proprietorships
      • Tribal Businesses
    • How Much Can You Get? 
      • Economic Injury Disaster Loans - Up to $2,000,000
      • Emergency Economic Injury Grant - Up to $10,000 (This portion is forgiven and does not need to be repaid)
    • Any Forgiveness Options?
      • The grant portion does not need to be repaid, even if the loan application is denied.
    • Other Information
      • These loans are issued directly by the SBA, not a bank.
      • Collateral required for loans over $25,000.
      • Grants are only available through 12/31/2020.
  • The Small Business Debt Relief Program

As alway, please feel free to reach out if there is anything we can be helping with.  


Stolz & Associates