The CARES Act | Key Takeaways
The CARES Act, which was signed into law on March 27, 2020, provides much needed stimulus to individuals, businesses, and hospitals in response to the economic distress caused by the COVID-19 pandemic. Additional guidance is expected from the Small Business Administration within the week.
For a more comprehensive examination of the CARES Act highlights, please review ThompsonKnight’s summary. Also see the U.S. Chamber of Commerce’s “Coronavirus Emergency Loans Small Business Guide and Checklist.”
Some of the key provisions likely to impact many of the companies we do business with include:
Paycheck Protection Program (PPP)
$350 billion aimed at providing eight weeks of cash flow assistance for small businesses. To qualify, a business must employ no more than 500 employees or meet industry size standards defined by the Small Business Administration (SBA), have been operational on Feb. 15, 2020, and have been paying employees at the time.
Loan Forgiveness Under PPP
CARES allows certain amounts of a PPP loan to be forgiven so long as it is an amount of principal that a lender reasonably expects a borrower to expend during an 8-week period (beginning on the date of the origination of the loan) on the sum of any payroll costs; payments of interest only on any covered mortgage obligation; payments on any covered rent obligation; and covered utility payments.
Continued Availability of Economic Injury Disaster Loans (EIDLs)
EIDLs continue to be available to eligible recipients. Generally speaking, with respect to EIDLs, recipients can apply directly with the Small Business Administration; recipients must be located in a declared disaster area; and recipients must be economically impacted by the subject disaster; among other requirements. See the full list of provisions here.
NAI Partners is not providing legal, tax or accounting advice. You are strongly encouraged to contact your CPA and to seek legal counsel to review your eligibility to participate in any of the above.