Relief for Small Businesses – CARES Act Update
BY THEUS LAW OFFICES
Covid-19 relief has arrived for small businesses under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”)! One of the many offerings for small businesses is the Paycheck Protection Program (PPP) loan. A PPP loan is designed to cover payroll expenses for an 8 week period and to discourage laying off employees. In a nutshell, a small business may apply for a loan up to 2.5 times the average monthly payroll expense of the business. The loan will be FORGIVEN in full if the business does not lay off employees or reduce wages by more than twenty-five (25%) during the 8 week period following receipt of the loan. Business owner wages are included up to a salary cap of $100,000.00.
No collateral is required and the loans are non-recourse (meaning no personal guaranty is required).
Lenders are accepting applications beginning April 3, 2020.
Additionally, an Economic Injury Disaster Advance (“EIDA”) is available for up to Ten Thousand ($10,000.00) Dollars, which is also a non-recourse loan that will not have to be repaid.
Businesses can apply for both the PPP loan and EIDA, so long as each loan covers different operational costs.
UPDATE: 04.21.2020: The $350 billion set aside for small businesses under the PPP Loan program was exhausted within 13 days! Funds were available on a “first come, first served” basis. Lawmakers on Capitol Hill are soon expected reach an agreement for additional funding.
For more information, including Fact Sheets and a Loan Application, visit TheusLawOffices.com/Business.