The Federal Government just signed the CARE Act on March 27th 2020

I know many of you had questions about the Small Business Grants just signed by our President. President Trump just signed the provision of the CARES Act which has been designed to help small businesses that have been affected by the Coronavirus COVID-19.

The $349 billion program was enacted as part of last week’s Coronavirus Aid, Relief, and Economic Security (CARES) Act, P.L. 116-136.

Under this new provision, small businesses have two important options to apply to receive help from the government:

• Paycheck Protection Plan (“PPL”)  This type of loan is actually a grant which means you do not have to pay it back if you use this money to cover payroll costs, mortgage interest on business real estate, rent and utilities. Keep in mind that if you fire an employee, the amount of the grant will decrease.  Eligible recipients can qualify for a loan up to $10 million.  The amount of loan is designed to cover 8 weeks of prior average payroll plus 25% of that amount. The whole idea is to keep your workforce active so there are no more layoffs.  The good news is that no collateral is needed to apply for this loan. Please click here to learn more.
• Economic Injury Disaster Loan Grants: This type of loan provides immediate advance of up to $10,000 of working capital to small businesses that have applied for Economic Injury Disaster Loans in response to Coronavirus. These loans may be used to pay fixed debts,payroll, accounts payable and any other bills that can not be paid by small businesses at the moment because of the disaster’s impact. Interest rate for this type of loan is 3.75% for small businesses and 2.75% for non-profit entities. Please click here to learn more.

Many small businesses will look first into the PPL since this is a loan that if used for payroll, mortgage interest, rent and utilities, it automatically becomes a grant. The application process for this PPL grant will start tomorrow April 3rd and it can be done thru any existing SBA 7(A) lender or thru any federally insured depository institution, federally insured credit union, and Farm Credit System institution participating in the program.  The application form is here to help you take a look of what you will need to apply for this loan.  Please contact your bank if they are in the list of SBA lenders to start the application process.

Much information is still unclear on whether the application will be done online or in person at the SBA lender but once we get more information, we will share it with you.

Click here to learn more about the CARES ACT.

Please reach out to us if you have any other questions. Stay safe everyone.

Alicia Brown
A&B Accounting and Business Solutions, LLC