How do I navigate the CARES Act for my business?

The Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress last week allocated $350B+ to help keep small business afloat through the pandemic.

There are three main avenues for small business owners & entrepreneurs to pursue. Companies can apply for multiple programs so long as the funds aren’t used for the same expenses.

Paycheck Protection Program (PPP):

• 8 weeks of operating costs are forgivable if the company maintains its payroll & keeps workers employed

• applications open April 3 for small businesses & sole proprietors

• applications open April 10 for self-employed individuals & independent contractors

• retroactive to Feb. 15, 2020

• available to small businesses emplopying less than 500 people per location, 501(c)(3) nonprofit orgs, 501(c)(19) veterans orgs, sole proprietors, independent contractors

• can also cover expenses such as rent, utilities

• up to 10 years to repay

• interest rates will be 1%

• up to $10M per business or 250% of monthly payroll expenses (whichever is less).

• PPP loans will be available through financial institutions like local banks & credit unions.

• Lenders will not consider whether the borrower was denied credit elsewhere, require a personal guarantee, or require collateral.

• The Springfield Small Business Development Center (SBDC) breaks down PPP loans in this video.

Download the US Chamber’s guide to the PPP loans here.

Economic Injury Disaster Loans (EIDL) & Economic Injury Disaster Grants:

• Get up to $10K in emergency grant funds within 3 days of applying for an EIDL loan. This advance doe not need to be repaid, period.

• low-interest loans of up to $2M

• available to small businesses with fewer than 500 employees, sole proprietors, independent contractors, co-ops & employee-owned businesses, nonprofits.

• Already applied for an SBA loan? The grants are backdated to Jan. 31, 2020, so you can still get a grant.

The SBA has streamlined the application process for the loans & grants, apply here.

• The Miami Valley SBDC breaks down the EIDL application process in this video.

Small Business Debt Relief Program:

• Already have a 7(a) loan, 504 loan, or microloan through the Small Business Administration (SBA)? Or planning to take out one of these loans in the next six months? The Small Business Debt Relief Program will cover all loan payments on these SBA loans (including principal, interest, and fees) for six months.

Download the SBA’s full CARES Act guide here.

Check out this breakdown of which loans best fit which businesses.

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