The Coronavirus Aid, Relief, and Economic Security or CARES Act was signed into legislation March 27, 2020, since then, the U.S. Small Business Administration (SBA) has been swamped with questions about how businesses should proceed.
While they are hoping to have guidelines released by the end of this week, local businesses are currently wondering how the relief pertains to them and how they can take advantage of these benefits.
The CARES Act offers considerable relief to businesses with less than 500 employees as well as nonprofits. Although there are multiple programs written into the Act, there are three programs available to businesses through the SBA:
The Emergency Economic Injury Grant program – it assists small companies that need a short-term cash boost and grants an emergency advance of up to $10,000 to small businesses and private nonprofits affected by COVID-19. In order to access the grant, a small business or private non-profit, should apply for an Economic Injury Disaster Loan.
The Paycheck Protection Program – it is being offered to cover the cost of retaining employees during the pandemic. Payments on the loans can be deferred for a year. If Employers retain employees during the specified coverage period (eight weeks between Feb. 15 and June 30) loans may be forgiven.
The maximum loan amount is 2.5 times the businesses’ monthly payroll and the loan cannot exceed $10 million per organization. Learn more here.
Small Business Debt Relief Program – for businesses struggling to make payments on a current Small Business Administration loans, the Small Business Administration will cover all loan payments on the loans, including principal, interest and fees for six months. The program itself received $17 billion in funding to provide immediate relief to small businesses. Learn more and apply for the program here.
The CARES Act covers a multitude of financial relief options to Employers and Employees alike, read the Act in its entirety here