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Small Business Owner’s Guide to the CARES Act

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April 3rd, 2020

Posted in Business Law

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act was just passed by Congress.  The CARES Act totaling $2 trillion provides for individuals, families, governments, large corporations, and small businesses.  As to small businesses, below are some important links to Resources to help.  The first link is a guide by the U.S. Senate Committee on Small Business & Entrepreneurship, which outlines the various aspects of the CARES Act that apply to small businesses.  The second and third links are to the Treasury Department and SBA, which provides important updates on the CARES Act.

Small Business & Entrepreneurship

Treasury Department

Small Business Guidance & Loan Resources

The most critical consideration for small business owners are the Payment Protection Program (PPP) loans.  It is recommended that you consider applying for a PPP loan as soon as possible because there is a funding cap, which is expected to run out.  The application is not cumbersome, and you should contact your banking institution or another lender if your bank cannot help.  Business owners should calculate the projected loan amount, which is 2.5 times your average monthly payroll costs with a maximum cap of $10 million.  The projected loan amount can help you determine whether the PPP loan is right for you as opposed to one of the other programs.

Of importance, there is no personal liability for the PPP loan if you are incorporated.  Further, the loan carries low interest, zero loan fees, zero prepayment, and can be forgiven so long as the proceeds are used for payroll costs incurred during the covered 8 week period.  More specific details are contained in the Resources above. 

Andrew Jackson, Esq.
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