As individuals and businesses adapt to major changes due to the coronavirus and current state of our economy, Congress has provided several programs and initiatives to small businesses through The CARES Act. I want to highlight a few key provisions that were created with the intention of assisting business owners financially. Below, I have laid out a basic overview of three main provisions.
Paycheck Protection Program (PPP)
- The Paycheck Protection Program is a Small Business Administration (SBA) program designed to provide capital to help small businesses cover the cost of retaining their employees and can be used for payroll costs (including benefits), interest on mortgage obligations, rent, and utilities.
- These are loans that are granted by the Federal Government and would be forgiven if employers meet certain requirements, most notably, maintaining their employees.
Small Business Debt Relief Program
- The Small Business Debt Relief Program was put in place to help small businesses by providing immediate relief with non-disaster SBA loans.
- For 6 months, the program will cover all loan payments on the SBA loans (including principle, fees, and interest payments).
- There are three types of loans which include:
- 7(a) ($5 million max),
- 504 ($5.5 million max),
- microloans ($50,000 max).
- Each loan type is structured towards different types of business needs and the loan amounts will vary based on the loan type and serving purpose, as well as small business eligibility.
- Borrowers are able to apply for both the Small Business Debt Relief Program, as well as the PPP.
Economic Injury Disaster Loans and Emergency Economic Injury Grants
- Grants will provide an emergency advance to small businesses and non-profits that are impacted and harmed by the coronavirus in amounts up to $10,000.
The SBA provides a variety of resources and additional detailed information for additional questions regarding these provisions as well as any other provisions included in The CARES Act for the relief of small businesses.
For more details on any of these programs, please go to www.sba.gov or https://www.sbc.senate.gov/public/_cache/files/2/9/29fc1ae7-879a-4de0-97d5-ab0a0cb558c8/1BC9E5AB74965E686FC6EBC019EC358F.the-small-business-owner-s-guide-to-the-cares-act-final-.pdf