On March 27, 2020, the President signed the “Coronavirus Aid, Relief and Economic Security (CARES) Act, “an economic relief package that includes assistance for small businesses to help them weather the current health crisis.
The CARES Act includes a provision called the Paycheck Protection Program, which provides $350 billion in assistance for small businesses. This program offers forgivable loans for businesses to help them cover important expenses and keep employees on payroll as they navigate this uncharted territory.
Who Qualifies For Loans?
- Companies with fewer than 500 employees
- Businesses with NAICS codes beginning with “72” (Hotels, Casino Hotels, Restaurants, and Bars) that have less than 500 employees per location
- Independent Contractors and individuals who are self-employed
How Is The Loan Size Determined?
The dollar amount of the loan is based on the company’s average monthly payroll for 2.5 months, with a maximum loan of $10 million.
What Expenses Can The Loan Be Used For?
- Payroll expenses
- Employee benefits
- Mortgage payments
- Rent payments
- Utility bills
What Will Be Forgiven From The Loan?
Money spent on the above listed expenses during the period between February 15 and June 30 will be forgiven from the loan.
How Can Businesses Apply For A Loan?
These loans can be obtained through any FDIC bank, credit union, or fintech lender. If your business does not qualify for a loan through the Paycheck Protection Program, the CARES Act includes other provisions that may offer financial assistance.
Need more information?
Check out this guide from the Small Business Administration and Department of Treasury.
