Coronavirus Aid, Relief, and Economic Security (CARES) Act

The programs and initiatives in the Coronavirus Aid, Relief, and Economic Security (CARES) Act that was just passed by Congress are intended to assist business owners with whatever needs they have right now. When implemented, there will be many new resources available for small businesses, as well as certain nonprofits and other employers. This guide provides information about the major programs and initiatives that will soon be available from the Small Business Administration (SBA) to address these needs, as well as some additional tax provisions that are outside the scope of SBA.

  • Link to the Small Business Owner’s Guide to the CARES Act here.

Small Business Administration (SBA)

Lapse in Appropriations Notice: SBA is unable to accept new applications at this time for the Paycheck Protection Program or the Economic Injury Disaster Loan (EIDL)-COVID-19 related assistance program (including EIDL Advances) based on available appropriations funding.

EIDL applicants who have already submitted their applications will continue to be processed on a first-come, first-served basis.

To learn more about the relief options available for your business,click here.

There are three SBA emergency capital programs available to the public:

    1. A Low interest, long term “Economic Injury Disaster Loan” for up to $2 million. The first payment is deferred for 12 months. The application can be completed online at www.sba.gov/DISASTER
    2. If you apply for that Disaster Loan – you can ask for an “Economic Injury Disaster Loan Advance” for up to $10,000 as part of the loan application. If approved, these funds can be used for payroll and other operating expenses and can be FORGIVEN.
    3. The SBA and Treasury Department launched the  Paycheck Protection Program to help keep employees on payroll and small businesses operating. Speak with an SBA lender about this program, a lender list can be found on the SBA website at: www.sba.gov/MA

In addition:

 

Frequently Asked Questions

If I am applying or already received an Economic Injury Disaster Loan, is my small business eligible to participate in the Paycheck Protection Program?

  • Borrowers can apply for BOTH an Economic Injury Disaster Loan and the Paycheck Protection Program loan.
  • However, the Paycheck Protection Program loan funds and the Economic Injury Disaster Loan funds cannot be used for the same purpose.
  • The Paycheck Protection Program loan must be used for payroll (minimum of 75% of the funds received) for it to be eligible for a forgivable loan and the remaining 25% is used for different purposes (mortgage interest, rent, utilities, other services).
  • Borrowers who accept both loan funds should document the uses of the funds appropriately.
  • If your Economic Injury Disaster Loan was used for payroll costs, your Paycheck Protection Program loan must be used to refinance your Economic Injury Disaster Loan.
  • Any advance up to $10,000 on the Economic Injury Disaster Loan will be deducted from the loan forgiveness amount of the Paycheck Protection Program loan.
  • For example, a borrower may obtain a loan from the Paycheck Protection Program and use those funds to pay for 8 weeks of payroll or employee retention. They may wish to then dedicate their entire EIDL funds towards working capital, notes payable and accounts payable that do not duplicate the funds provided through the Paycheck Protection Program. If the EIDL loan was used for payroll expenses, the borrower must refinance the EIDL loan with the PPP loan which carries a lower interest rate as well as a shorter maturity period.
  • If you are applying for both, you can accept PPP first – then decide whether or not to close on your EIDL approved loan.
  • The application period for PPP loans runs through June 30, 2020, but the EIDL application period runs through December 2020.
  • EIDL Loan advances will start to be distributed this week.  $1000 per employee up to $10,000 max
  • EIDL Loans – IF YOU DID NOT APPLY THROUGH THE STREAMLINED PROCESS WHICH STARTED LAST WEEK, SBA request that you visit https://covid19relief.sba.gov/#/ and reapply with the secure streamlined process. You will not lose your place in queue with your original EIDL loan application.
  • EIDL loans will not require a personal guarantee for loans under $200,000
  • EIDL loans will not require real estate collateral for loans under $500,000. SBA will be looking be best available lien priority on all business assets or other business assets.

Paycheck Protection Program Loans Frequently Asked Questions

SBA Additional Resources:

 

This interim final rule is effective April 15, 2020.  Read the notice at 2020-07672. Submit comments by clicking here.

  • FAQ for Individuals with Self-Employment Income who File a Form 1040, Schedule C: 19-page document

SBA Webinars on Disaster Assistance

The SBA district and regional offices are offering webinars about Economic Injury Disaster Loans that explain this program and how you can apply for disaster assistance. To find out more information Sign up for SBA newsletters using your zip code to get updates

Virtual Mentoring and Training

Offices around the country may be closed to the Coronavirus pandemic, but SCORE, Small Business Development Centers, Women’s Business Centers, and Veterans Business Outreach Centers and other resource partners are providing free business mentoring and training by phone, email, and video. Find an SBA resource partner near you

To get the most up-to-date information as things develop, subscribe to SBA’s e-newsletter via www.sba.gov/updates. You can also follow the SBA on Twitter at @SBA_MA for frequent updates as well.

Office of the Inspector General

Beware of Scams and Fraud Schemes

The Office of Inspector General recognizes that we are facing unprecedented times and is alerting the public about potential fraud schemes related to economic stimulus programs offered by the U.S. Small Business Administration in response to the Novel Coronavirus Pandemic (COVID-19). The Coronavirus Aid, Relief, and Economic Security (CARES) Act, the largest financial assistance bill to date, includes provisions to help small businesses. Fraudsters have already begun targeting small business owners during these economically difficult times.  Be on the lookout for grant fraud, loan fraud, and phishing.  Learn more

Federal Coronavirus Resources

State, local, and federal agencies are working together to maintain the safety, security, and health of the American people. Check out coronavirus.gov for updates from the White House’s Coronavirus (COVID-19) Task Force. Go to cdc.gov for detailed information about COVID-19 from the Centers for Disease Control and Prevention.

Learn more about the federal government’s response

Other Federal Resources: