Small Business Assistance
The law includes $349 billion in loans for small businesses. The CARES Act allows the Small Business Association (SBA) to serve as a guarantor for 7(a) loans of up to $10 million for small businesses to maintain payrolls and pay off debts.
Paycheck Protection Program
Small employers (business with 500 or fewer employees), self-employed, and gig economy workers are eligible for the Paycheck Protection Program, which provides eight weeks of cash-flow assistance through 100% federally guaranteed loans for small businesses who maintain payroll. The portion of loans used for payroll, mortgage interest, rent, and utilities could be forgiven for small businesses that maintain payroll. Retroactive to February 15, 2020, this allows employers to bring back workers who have already been laid off.
Emergency Economic Injury Disaster Loans
The CARES Act expanded eligibility for access to Emergency Economic Injury Disaster Loans. This includes an increase of eligible businesses and not for profits as well as establishes an emergency grant procedure. In addition, the SBA shall waive personal guarantees on loans below $200,000, the requirement that the applicant needs to be in business for one year before the disaster, and the credit elsewhere requirement.
SBA Express Loans
The Act increases the maximum loan for SBA express loans from $350,000 to $1 million through the end of 2020.
How DHJJ Can Help
On March 27, 2020, President Trump signed into law the latest COVID-19 relief bill: Coronavirus Aid, Relief, and Economic Security (CARES) Act. The bill brings with it several elements of relief for businesses, employees, and families in an effort to maintain livelihoods throughout the crisis and after. The expected cost of the bill is nearly $2 trillion and includes nearly $500 billion in economic distress relief for companies.
For funding dedicated to taxpayers and businesses, the bill currently includes provisions related to taxes, unemployment, small business loans, and a large business lending program. Below is a summary of what we know so far about the bill. The bill is voluminous, so please watch for additional details from DHJJ.
DHJJ is here to help provide guidance and resources during this uncertain time. We are continually getting new information during this ever-fluid time. Please check our DHJJ COVID-19 Tax Resources page for the latest tax information and guidance. If you have other questions, please fill out the form below.