We have put together the following short summary of resources available to small businesses amid the coronavirus (COVID-19) pandemic. We hope you will find it useful. This short memo will guide you through the primary relief options available to small businesses through the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Other resources are available on our web site, visit https://www.smolin.com/blog/.
What financial help is available for a small business under the CARES Act?
The CARES Act encompasses several different programs. The primary programs are:
- Payroll Protection Program (PPP) Loans. These loans are designed to help keep employees on the payroll and provide cash-flow assistance to small businesses over the short term;
- The Small Business Debt Relief Program. This is meant to help small businesses stay afloat and cover expenses such as rent, utilities, and loan payments for a few weeks; and
- The Emergency Economic Injury Grant – This provides small businesses with a small emergency advance in order to continue operations. It does not have to be repaid.
Some of the loans made available under the CARES Act can be forgiven and will not have to be repaid. The forgivable loans are designed to keep employees on the payroll. If you get a PPP Loan, you will not be able to claim an employee retention credit under the CARES Act.
Where can you get information on these programs (eligibility, amount, terms, how to apply, etc.)?
The U.S. Senate Committee on Small Business & Entrepreneurship has put together a Frequently Asked Questions (FAQ) document that answers most questions and is easy to read, The Small Business Owner's Guide to the CARES Act. Moreover, The Small Business Administration assembled numerous resources on its web site; visit https://www.sbia.org/resources/
What should you do now?
Consider applying for these resources. The demand is overwhelming. The application for the Payroll Protection Program opened on Friday, April 3rd. The Treasury Department has already issued information for lenders and borrowers. The application form is available here: https://www.sba.gov/document/sba-form--paycheck-protection-program-borrower-application-form .
It is also a good idea to talk to your bank. The PPP and certain other loans will be processed and issued by banks. Initiating discussions with your lender now, may make a difference in how quickly you have access to funds.
What else may be available to you?
States, cities, and even private organizations are coming up with their own small business assistance programs, so we recommend you check these resources as soon as possible as well.
We would be happy to meet with you to go through this memo. Please contact us with any questions you may have.