The Coronavirus Aid, Relief, and Economic Security (CARES) Act
On March 27th, 2020, the CARES Act was signed into law by President Trump. This stimulus bill is intended to offer relief throughout the American economy within the different industries and includes programs and initiatives to assist business owners, nonprofits, and other employers.
The U.S. Senate Committee on Small Business and Entrepreneurship has created a comprehensive guide outlining the small business provisions in the CARES Act. You can view the guide here.
The Economic Injury Disaster Loan (EIDL) Program
The Small Business Association (SBA) has launched the Economic Injury Disaster Loan (EIDL) program to assist small business owners in the United States. The loans are now available.
Within 3 days of applying for an EIDL, the SBA is also offering an advance of $10,000 (the Emergency Economic Grant). You must first apply for an EIDL and then you may request the advance.
To view eligible disaster areas, apply for an EIDL, or check your application status, visit the SBA Disaster Loan Assistance website.
To find out if your business is eligible for an EIDL advance, the SBA EIDL Emergency Advance webpage.
Paycheck Protection Program (PPP)
The CARES Act includes a Paycheck Protection Program (PPP) which authorizes federally guaranteed loans to small businesses that qualify.
There are a variety of loans available for borrowers however they are limited to one per Taxpayer Identification Number, and you cannot use your PPP loan for the same purpose as other SBA loans acquired. This loan can be FORGIVEN (you don’t need to repay the bank) if you understand how funds can be used within the regulations. We highly encourage you to seek legal counsel to discuss your strategy in applying and having a plan to eventually have these funds forgiven, stay in compliance, and avoid any findings of fraud or misuse of funds by the Small Business Administration.
- April 3rd, 2020: Small Businesses and Sole Proprietorships
- April 10th, 2020: Independent Contractors and Self-Employed Individuals
For more loan information and to find out how to apply, visit the SBA Paycheck Protection Program webpage.
If you would like to discuss your plan on how best to use the PPP funds and review it with an attorney at The Lozano Law Firm, so your business remains in compliance and will be able to qualify for the maximum amount for forgiveness, please click here.