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.
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.