June 2020


A few months have past since the COVID-19 crisis started. The US government had presented a very important and ambitious economic plan in response. The intentions were to provide economic support for businesses. In this article we’ve decided to review 4 important sources which describe and show how the CARES ACT is actually working with enormous difficulties. 

The articles included are the following:

  1. NYTimes Few Minority-Owned Businesses Got Relief Loans They Asked For
  1. NYTimes Small Businesses Wait for Cash as Disaster Loan Program Unravels – Owners were supposed to be able to get up to $2 million. Now they’re being told the cap is $15,000 — if they can get any answers at all.
  1. Forbes The Design Flaw At The Heart Of The CARES Act
  2. Prevue Meetings + Incentives Difficulty With the CARES Act

Continue reading to get more information about the actual situation.

1. NYTimes- Few Minority-Owned Businesses Got Relief Loans They Asked For 
By Emily Flitter Published on May 18, 2020

The Paycheck Protection Program largely neglected them, a survey commissioned by two equal-rights groups found.

Business owners are struggling to get government assistance under the Paycheck Protection Program, a new survey has found, and many say they are on the brink of closing permanently. The survey, conducted by the Global Strategy Group for two equal-rights organizations, Color of Change and UnidosUS, included interviews with 500 business owners and 1,200 workers from April 30 to May 11. Just 12 percent of the owners who applied for government-backed loans in the $650 billion program reported receiving what they had asked for, and nearly half of all owners said they anticipated having to permanently close in the next six months.

2. NYTimes – Small Businesses Wait for Cash as Disaster Loan Program Unravels – Owners were supposed to be able to get up to $2 million. Now they’re being told the cap is $15,000 — if they can get any answers at all.
By Stacy Cowley Published on April 9, 2020. Updated April 20, 2020

Owners were supposed to be able to get up to $2 million. Virginia Warnken Kelsey, an opera singer whose spring season canceled because of the coronavirus outbreak, said a disaster loan would be a lifeline. Now, business owners who applied are desperate for cash and answers about what aid, if any, they are going to receive. The initiative, known as the Economic Injury Disaster Loan program, is an expansion of an emergency system run by the Small Business Administration that has for years helped companies after natural disasters like hurricanes, floods, and tornadoes.

To speed billions of dollars in aid along, the government directly funds the loans, sparing applicants the step of finding a lender willing to work with them. But in the face of the pandemic, the loan program is drowning in requests. Many applicants have waited weeks for approval, with little to no information about where they stand, and others are being told they’ll get a fraction of what they expected. The program is supposed to offer loans of up to $2 million, but many recent applicants said the helpline had told them that loans would be capped at $15,000 per borrower.

Those funds were supposed to be available to applicants within three days of their application, even if they weren’t approved for a loan. That hasn’t happened, according to more than 400 applicants who contacted The Times. The disaster loan program’s missteps have been overshadowed by the chaotic start of the federal government’s other large small-business aid effort, the Paycheck Protection Program, which started taking applications last week. Applicants to that initiative have faced delays as banks deal with the hasty deployment of a $349 billion program.

Each state had to submit its own formal disaster declaration, and business owners could not apply until their state’s declaration was approved. The disaster loan program issued $1.7 billion in loans in 2006, after Hurricane Katrina hit New Orleans. Congress has approved funding to support borrowing that will far exceed that figure. And even though Congress allocated billions of dollars to fund the disaster loan program, some applicants said S.B.A Deb Wood-Schade, who runs a chiropractic wellness business in Aliso Viejo, Calif.

«I am concerned if I take it I won’t get the additional funds». Senator Ben Cardin, Democrat of Maryland, who pushed for the additional funding through the CARES Act, said the program simply had to have more money. « is limiting Economic Injury Disaster Loans to an initial disbursement of $15,000 shows that there is a clear need for more resources for this program,» he said. The program’s previous peak came in 2006 after Hurricane Katrina.

It disbursed loans of $1.7 billion that year, according to the Congressional Research Service. In early March, Congress allocated funds to support around $7 billion in lending in response to the pandemic. It added another $10 billion through the CARES Act to fund the $10,000 cash grants, saying applicants could get that money even if their applications were denied. If every applicant received the maximum $10,000 grant, the funding would cover around one million businesses.

But more than three million applied for disaster loans last week alone, Joseph Amato, the director of the S.B.A  In response to the demand, the S.B.A. Even early applicants who have been approved for larger loans still have unanswered questions. A retail business owner in California, who spoke on the condition of anonymity because he feared jeopardizing the loan he had been promised, was relieved to be getting the money needed to support his employees but frustrated about the process. The official who requested additional documents, then verbally approved a loan of $500,000. It took more than a week before he got a letter confirming the loan, along with a pile of closing documents to sign.

Business owners who applied later are afraid the funding will run out before their applications are processed. Kevin Smith, chief executive of the software company Wynexa, has spent hours on hold trying to find out about his loan. A loan capped at $15,000 would be nearly useless to Kevin Smith, the founder of Wynexa, a software company in Houston. Smith said.

He was initially told he would have a response to his application by April 1. Several business owners said their frustration was magnified by the Trump administration’s frequent proclamations that small business aid was flowing freely. «Any little glitch, we had worked out within minutes, within hours,» Mr. Trump said on Tuesday about problems with the government’s still-chaotic paycheck loan program. Dave Vanslette, who has applied for that program and a disaster loan, said comments like that were infuriating.

He is still waiting for responses to his applications. «It would be great if our administration communicated the reality of the situation instead of saying the process is working perfectly,» said Mr. Vanslette, who runs FairwayIQ, a software company in Waltham, Mass.

3. Forbes The Design Flaw At The Heart Of The CARES Act
Kathryn Judge. Published on April 20, 2020.

The economic crisis stemming from COVID-19 made speed and size the order of the day. Too much of the support is going to large companies when it should be going to the small ones. And far too many of the benefits are flowing to shareholders and creditors, rather than to the underlying enterprise and the people it employs. In the face of a shock the size of COVID-19, it makes good sense for the government to loan, and even give, money to otherwise private companies.

Just as it can be rational for an individual to spend money to obtain a college degree in order to improve future earnings, countries sometimes must spend today to increase the size of the taxpayer base in the future. This reasoning also helps to explain why the CARES Act authorizes the Treasury Secretary to spend so much money supporting businesses. The largest pot of money that Congress allocated to help businesses consists of $454 billion that the Treasury Secretary can deploy through facilities created by the Federal Reserve. Requiring these funds to flow through Fed facilities has benefits.

It ensures, for example, that the Treasury Secretary cannot divert money to businesses that he unduly favors. It could also increase the aggregate amount of new capital available to businesses, as the Fed contributes multiples of the amount that the Treasury commits when they create facilities to use these funds. Small businesses are often particularly innovative and are critical to the long-term vibrancy of society and the economy. Just as importantly, these companies are vulnerable, and if they run out of cash and must file for bankruptcy, they usually are forced to liquidate.

Liquidations destroy a company’s productive capacities and destroy jobs, precisely what the government wants to avoid. Unfortunately, the last few weeks make it clear that the Fed is ill-suited to provide the direct capital support these companies need. Even before the CARES Act was signed into law, the Fed had created two facilities now positioned to provide up to $750 billion in financing for the largest corporations. Just the announcement of these facilities sufficed to lower funding costs for the large companies that qualified.

As details have emerged, however, so have questions about whether the mid-sized companies most in need of funds will be able to qualify and whether companies that do qualify might suffer under the strain of the new debt. That the Fed’s interventions disproportionately benefit large companies is not a reflection of its priorities. The Fed is creating these new facilities pursuant to its authority under Section 13 of the Federal Reserve Act to loan money to nonbanks in «unusual and exigent circumstances.» But the Fed must ensure each of its loans is adequately secured, limiting the credit risk it can take. This makes it far easier for the Fed to support large, creditworthy companies than smaller ones that pose greater risks.

Again, the Main Street Lending Facilities demonstrate just how difficult these issues can be, as efforts to rely on banks to screen the companies have revealed conflicts and compensation concerns. Shifting to focus on just the largest companies reveals yet another mismatch between what the Fed can do and what ought to be done. The most important near-term goal to promote economic health is keeping operations viable and employees employed. This is one of the reasons Congress tried to make retaining employees a requirement for new funding and why some European countries are providing generous incentives for companies to retain employees.

By contrast, the government has far less reason to want to protect a company’s current shareholders or creditors. Although it may seem counterintuitive, bankruptcy can be an effective way to protect a company’s operations and employees while still imposing appropriate losses on shareholders and creditors. Even without the additional burdens placed on the Fed in the CARES Act, the Fed is doing a lot to protect the long-term economic health of the country. From its commitment to unlimited quantitative easing to the range of facilities it has instituted to support short-term markets and provide liquidity to banks and primary dealers, it is working hard to prevent the COVID-19 crisis from triggering the type of market dysfunction that could exacerbate the pain.

As reflected in the fact that the stock market is booming while unemployment lines are swelling, the aggregate effect of funneling so much support through the Fed is that too much money is going to big companies, and far too little is going to small and mid-sized companies. It has also resulted in too many benefits flowing to the shareholders and creditors of those large companies, and too few protections for the underlying businesses and employees. That the Fed can only extend loans, not grants, even when grants may be optimal, could also inhibit economic growth when the cloud of COVID-19 clears. The one important bright spot in the CARES Act is the PPP, a program designed to help small businesses and their employees which does not require the Fed’s involvement.

The support takes the form of a low-interest loan, but it gets converted into a grant if the recipient uses the funds to retain employees. Just over two weeks later, however, it has become clear that the country is facing a new normal and the economic effects of COVID-19 will reverberate for a long time. The answer is not just to throw more money at PPP. It means allowing shareholders and creditors to bear some of the risks that they have been compensated to shoulder.

And it means being less reliant on the Fed to get money where it ought to go.

4. Prevue Meetings + Incentives Difficulty With the CARES Act
By Andrea Doyle – Published on April 10, 2020

One of the provisions of the CARES Act is the Paycheck Protection Program or PPP that are forgivable loans to keep workers on the payroll. You can borrow up to your average total monthly payroll costs during the one year immediately before the loan multiplied by 2.5. To find a list of lending institutions that are participating, click here and for the application and details here. According to the National Federation of Independent Business, about 70% of small business owners tried to apply for the loan with varying degrees of success.

About 72% of those who tried to apply for a PPP loan were successful in submitting their application. However, some banks are pre-screening applicants before having them fill out the full application, so it is unclear how many have successfully applied or have just completed the first step in a longer process. Twenty-eight percent of small business owners were not successful in applying for a PPP loan. Of the 28% of small business owners who were not successful, most of them are waiting for their bank to start accepting PPP loans.

Nine percent of them are not able to find a participating bank, which is likely due to their own bank not participating. Five percent of owners trying to apply for the loan were told by their bank that it had hit their limit of accepting loans. «We’re trying to get the Payroll Protection loan, and thank goodness my banker knows us. «The bank’s most significant recommendation to all who apply is to make certain that the supporting documentation you submit along with your application fully ties in with the dollar amount of your loan.

The COVID-19 crisis is not yet resolved and the times are still very uncertain. Our intention is to give our community of small businesses relevant information about the situation and the measures that are being taken from the government. Far from generating political opinions, we hope that this article can be of great help so that everyone can face the crisis with clear and concrete data.

We wish you the best 
keep healthy and take care of yourselves
keep healthy and take care of yourselves


With the beginning of the crisis generated by the COVID-19 and its effects on the economy, the U.S. government launched an economic rescue plan for small and large businesses called CARES ACT. This plan has diversified areas that respond to the different needs of the country’s economy. 

In this article we present a series of sources that introduce the CARES ACT as the case may be, detailing the different possibilities that this plan offers for cellphone store owners. You will also find specific information that will help you to present your application correctly. 

We hope this will be of great help to our small business community. It is very important for us to take care of our clients and help them to overcome in the best possible way this economic and humanitarian crisis in which we all find ourselves.

The articles included are the following:

  1. NY Magazine – Everything We Know About CARES Act Expanded Unemployment Benefits


  1. Forbes CARES Act Compliance, Oversight, And Investigations: A Basic Checklist For Business https://www.forbes.com/sites/paulrosen/2020/04/28/cares-act-compliance-oversight-and-investigations-a-basic-checklist-for-business/#769763ff69a2
  1. S.B.A US – SMALL BUSINESS ADMINISTRATION Coronavirus (COVID-19): Small Business Guidance & Loan Resources https://www.sba.gov/page/coronavirus-covid-19-small-business-guidance-loan-resourcess
  2. Home Treasury USA The CARES Act Provides Assistance to Small Businesses
  1. The Points Guy Ultimate guide to CARES Act relief options for small businesses and employers
  1. Forbes/How Small Businesses Can Get Coronavirus Relief Through The CARES Act

Continue reading to get more information about the actual situation 

1.  NY Magazine – Everything We Know About CARES Act Expanded Unemployment Benefits – Written by  Adam K. Raymond, Published on April 27, 2020

When Congress passed a $2.2 trillion stimulus package to combat the economic crisis created by the coronavirus outbreak, the top-line item was the $1,200 payments that will go out to most Americans. But the crown jewel of the legislation was the expansion of unemployment insurance that will benefit people who’ve lost their work due to the crisis. After weeks of delay, the extra federal benefits, which are added to the state unemployment payments, began arriving for many Americans in mid-April.

How much can you get?

Each state determines how much people receive based on their prior income and other factors, and some states are far more generous than others. Nationwide, the average payment is roughly $385 per week. The extra $600 from the federal government will be added to that total each week until July 31. Though the extra benefits are only now making their way to the unemployed, they will be retroactive to March 29.

When will the money arrive?

Many Americans have already started to receive the payments after long delays. The federal government sent $1 billion to states to improve their unemployment systems, which is reportedly being used to hire more workers and update technology. Some gig workers, freelancers, and self-employed workers are still waiting to receive benefits as states scramble to build programs that include them.

Will the program be extended?

The Urban Institute has also called for an extension, arguing that if the benefits end as scheduled, «renters will fall off an income cliff in July, which is also when the federal moratorium on evictions ends for those living in federally financed units».

2. Forbes – CARES Act Compliance, Oversight, And Investigations: A Basic Checklist For Business – Written by  Paul Rosen, Published on April 20, 2020

In the years that followed, SIGTARP became one of the most dogged oversight agencies in Washington, landing criminal convictions of 381 people and recovering $11 billion as a result of its investigations, including those arising from fraud, insider trading, obstruction of justice and more.

NCAA Suffers Another Blow To Current Amateurism Model

The SIGPR will not be the only oversight body looking after the use of taxpayer funds. Traditional government investigators, such as the FBI and dozens of inspectors general across the federal government, will continue to be vigilant for this kind of fraud. In addition, the newly formed Pandemic Response Accountability Committee, which is made of up 21 inspectors general from a variety of government bodies, will most certainly use their authority and $80 million budget to aggressively audit and investigate the disbursement, receipt and use of funds under the act. The Executive Branch will be joined by Congress in exercising oversight, with the newly established Congressional Oversight Commission, which will oversee the US Treasury and the Federal Reserve in their implementation of the CARES Act, as well as traditional oversight committees in both the House of Representatives and the Senate.

In fact, Congressional investigations into businesses’ pandemic response have already begun in earnest, including, for example, the scrutiny of certain businesses that have received SBA Paycheck Protection Program payments. While any company doing business with or receiving funds from the government should ensure robust compliance with applicable laws and regulations, the flood of stimulus money in response to the coronavirus pandemic, along with the new oversight authorities and funding, demand an even stricter compliance focus and framework from businesses. While the initial tranche of some loans have been exhausted, last week the president signed a bill providing nearly $500 billion more in federal stimulus, including for the Small Business Loan program. One of the more common charges resulting from oversight of such programs is making a false statement to the government, which is a felony.

Whoever signs or submits a business’ application for CARES Act assistance is certifying to its accuracy. Neither the signer nor the business should simply rely on data provided by others. Demand the underlying documents and test the accuracy of the data as a basic measure of due diligence in verifying information and of whether the business satisfies the act’s statutory and regulatory requirements. The administration of any spending program needs policies and active controls to ensure a business is clear about what kind of spending is permissible and what is not.

The CARES Act has very specific requirements for how stimulus dollars can be used, and sloppiness – or worse – could result in civil or criminal penalties. Building policies and active internal controls around these requirements is critical, as is making sure there is one person or small group responsible and accountable for these important compliance activities. Develop a comprehensive training program so those responsible for CARES Act related activities know the rules of the road and abide by them. Acting appropriately is only one part of a strong compliance program.

Businesses should centrally and safely maintain records demonstrating appropriate due diligence and compliance, including in filling out applications and in spending stimulus dollars. Such records should include underlying support for representations made to the government, any interpretations or analysis by counsel , and an audit trail of how funds were spent. As part of its record-keeping, a business should create a list of CARES Act requirements and obligations, specifically demonstrating how it has complied with each of those obligations. It is always good practice to retain a backup of the documentation and to place such documentation in your records retention program.

Businesses may discover issues or problems in connection with their application, receipt, or spending of stimulus dollars after the fact.

3.  S.B.A US – SMALL BUSINESS ADMINISTRATION Coronavirus (COVID-19): Small Business Guidance & Loan Resources

Coronavirus Funding Options

Our nation’s small businesses are facing an unprecedented economic disruption due to the Coronavirus outbreak. On Friday, March 27, 2020, the President signed into law the CARES Act, which contains $376 billion in relief for American workers and small businesses. agricultural businesses.

Common Issues Small Businesses May Encounter

Capital Access – Incidents can strain a small business’s financial capacity to make payroll, maintain inventory and respond to market fluctuations. Businesses should prepare by exploring and testing their capital access options so they have what they need when they need it. See SBA capital access resources. Facility Remediation/Clean-up Costs – Depending on the incident, there may be a need to enhance the protection of customers and staff by increasing the frequency and intensity by which your business conducts cleaning of surfaces frequently touched by occupants and visitors.

Additionally, there may be public concerns about public exposure to an incident and they may decide not to go to your business out of concern of exposing themselves to greater risk. SBA’s Resources Partners and District Offices have trained experts who can help you craft a plan specific to your situation to help navigate any rapid changes in demand. Marketing – It’s critical to communicate openly with your customers about the status of your operations, what protective measures you’ve implemented, and how they will be protected when they visit your business. Promotions may also help incentivize customers who may be reluctant to patronize your business.

Plan – As a business, bring your staff together and prepare a plan for what you will do if the incident worsens or improves. It’s also helpful to conduct a tabletop exercise to simulate potential scenarios and how your business management and staff might respond to the hypothetical scenario in the exercise.

Join the SBA’s Relief Efforts

The SBA is hiring additional employees to assist with disaster relief efforts.

SBA Products and Resources

SBA is here to assist small businesses with accessing federal resources and navigating their own preparedness plans as described by the CDC’s Guidance for Businesses and Employers. SBA works with a number of local partners to counsel, mentor and train small businesses.

Access to Capital

SBA provides a number of loan resources for small businesses to utilize when operating their business. Express loan program provides loans up to $350,000 for no more than 7 years with an option to revolve. Community Advantage loan pilot program allows mission-based lenders to assist small businesses in underserved markets with a maximum loan size of $250,000.The 504 loan program is designed to foster economic development and job creation and/or retention.

Microloan program involves making loans through nonprofit lending organizations to underserved markets. Authorized use of loan proceeds includes working capital, supplies, machinery & equipment, and fixtures .

Exporting Assistance

The loans are available to U.S Businesses could use a loan to obtain or retain overseas customers by offering attractive payment terms. International Trade loan program helps small businesses engaged in international trade to retool or expand to better compete and react to changing business conditions.

More specifically

8 Business Development program serves to help provide a level playing field for small businesses owned by socially and economically disadvantaged people or entities, and the government limits competition for certain contracts to businesses that participate. The 8 program offer and acceptance process is available nationwide, and the SBA continues to work with federal agencies to ensure maximum practicable opportunity to small businesses. If a situation occurs that will prevent small businesses with government contracts from successfully performing their contract, they should reach out to their contracting officer and seek to obtain extensions before they receive cure notices or threats of termination. The SBA’s Procurement Center Representatives can assist affected small businesses to engage with their contracting officer.

4. Home Treasury USA The CARES Act Provides Assistance to Small Businesses


This advance will provide economic relief to businesses that are currently experiencing a temporary loss of revenue. The SBA’s Economic Injury Disaster Loan provides vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing as a result of the COVID-19 pandemic. This program is for any small business with fewer than 500 employees , private non-profit organization or 501 veterans organizations affected by COVID-19. Businesses in certain industries may have more than 500 employees if they meet the SBA’s size standards for those industries.

5. The Points Guy- Ultimate guide to CARES Act relief options for small businesses and employers – Written By Richard Kerr – Published on April 6, 2020.

On March 17, President Trump signed the Coronavirus Aid, Relief and Economic Security Act into law that contained $376 billion in relief for American workers and small businesses. These funds were allocated to several new temporary programs, most administered by the U.S. Small Business Administration.

Paycheck Protection Program

The program is designed to allow small businesses to keep workers on payroll during the pandemic. The program is for any small business with less than 500 employees, including sole proprietorships, independent contractions, self-employed persons, private non-profit organizations or 501 veterans organizations. This has become the most popular program because you have the high potential of all or the majority of the loan being forgiven.

Loans can be in the amount of up to two months of your average monthly payroll costs from the last year plus an additional 25% of that amount up to a $10 million cap. Payroll costs are also capped at $100,000 annualized for each employee. That means if your average monthly total payroll is $100,000, your PPP loan could be up to $250,000.

You have until June 30, 2020, to restore your full-time employment and salary levels for any changes made between Feb. 15–April 26, 2020. The actual amount of your PPP loan that will be forgiven is still a bit murky. Several different government organizations have put out different FAQ documents that word the forgiveness criteria differently. Bankers are continuing to ask for clarification. Loans have a 1% interest rate, payments are deferred six months and the loan is to be repaid in two years.

Economic Injury Disaster Loan Emergency Advance

The EIDL provides loans of up to $2 million with up to 30-year terms at 3.75% interest rates for small businesses and 2.75% for most private non-profits. Payments are deferred for 12 months but interest does accrue during deferment. No personal guarantee is required for loans of less than $200,000 and collateral is required for loans over $25,000.

You are eligible if you are a sole proprietorship, independent contractor, co-op or tribal small business with less than 500 employees.

Using the PPP and the EIDL

According to a few experts, you can apply for and use both programs as long as the funds are used for different purposes. The EIDL outside of the $10,000 advance is a loan that you must repay and you can use the funds for a far less restrictive number of purposes compared to the PPP. The only overlap between the two programs is if you also apply for the PPP, the $10,000 EIDL grant will count against the amount of the PPP that can be forgiven.

SBA Express Bridge Loans

Small businesses that need fast help can apply for a bridge loan of up to $25,000 to help while they apply and wait for long-term financing. To qualify, a business must have had an existing relationship with an SBA Express Lender before March 13, 2020. The funds will be received within 45 to 90 business days of an application.

SBA Debt Relief

The SBA will automatically pay the principal, interest and fees of current 7, 504 and microloans for six months. Also as mentioned in the above programs, the SBA will automatically pay the principal, interest and fees of new 7, 504, and microloans issued before Sept. 27, 2020. For current SBA Serviced Disaster Loans, if your disaster loan was in «regular servicing» status on March 1, 2020, the SBA is providing automatic deferments through Dec.

If your business has a 50% decline in gross receipts for a calendar quarter in 2020, you can qualify for the ERC. This is a fully refundable tax credit for employers equal to 50 percent of qualified wages that employers pay their employees.

Bottom line

The banking world was given roughly five days to bring online the largest lending program perhaps in history. Unsurprisingly, the entire process is still unorganized and an evolving matter. There are likely going to be unanswered questions and many different scenarios not answered. Business owners need to decide on their strategy of PPP and/or EIDL versus unemployment and furlough along with the employee retention credit without even having full guidance and banks turning off applications to new small businesses. In other words, this is complex and time-sensitive.

6. Forbes How Small Businesses Can Get Coronavirus Relief Through The CARES Act – Written by Michelle Black, Published on April 2, 2020

BIO of Contributor: 

Michelle Lambright Black, Founder of CreditWriter.com and HerCreditMatters.com, is a leading credit expert and personal finance writer with nearly two decades of experience in the credit industry.

Small Businesses Seek Answers in Federal Stimulus

Segments of the U.S. economy have nearly come to a halt in recent weeks as government officials have issued stay-at-home orders to minimize the spread of the coronavirus.

Additionally, there is a provision to send recovery checks of up to $1,200 to many taxpayers, which Congress hopes recipients will inject into the economy. Another section of the CARES Act creates a temporary Pandemic Unemployment Assistance Program that will run through Dec. 31, 2020.

What Businesses Are Eligible?

The program is designed for companies and nonprofit organizations with fewer than 500 workers, which includes full-time, part-time, and other types of employees.

How Much Can You Borrow?

Companies should divide their payroll costs over the past year by 12 to determine their average monthly payroll, then multiply by 2.5 to find the maximum they can borrow, up to $10 million.

How Does Paycheck Protection Program Loan Forgiveness Work?

Businesses that maintain their payroll levels—by paying workers at their normal rates for at least eight weeks after the loan is originated—will be eligible for forgiveness.

You can get loan funds forgiven if they were used to pay qualifying payroll costs, mortgage interest, rent or utility payments over the eight-week period.

How to Apply for a Paycheck Protection Program Loan

Normally, SBA-backed loans are handled by a network of banks the organization works with, known as SBA-approved lenders. But while the SBA will still guarantee the loans, more banks will be able to issue Paycheck Protection Program loans.

Existing SBA lenders can start accepting applications from small businesses and sole proprietors on April 3, according to the Treasury Department, and from independent contractors and self-employed workers on April 10.

Expansion of the SBA’s Economic Injury Disaster Loan Program

The CARES Act also introduced an expansion of the SBA Economic Injury Disaster Loan Program. The goal of the expansion is to offer financial support to more businesses experiencing reduced revenue due to the pandemic.

Companies that have applied for a disaster assistance loan due to COVID-19 can request the $10,000 advance to help cover costs. If the loan application is approved, the SBA must distribute the advance within three days. Applicants are not required to repay the advance, even if they are subsequently denied an EIDL.

Updated Business Tax Provisions

Employers whose operations were fully or partially suspended due to a shutdown order, or whose gross receipts declined by more than 50% when compared to the same quarter a year ago, are eligible for a refundable tax credit.

Deferred Payment of Employer Payroll Taxes

Employers who do not receive forgiveness on a Paycheck Protection Program loan can delay payment of payroll taxes.

What’s on the Horizon?

Small-business owners may be able to benefit from additional support from states and the federal government in the coming weeks and months.