CARES Act: Evaluate your Options, Protect your Working Capital, and Keep your Employees Working.…Applications Open April 3

 

The current economic environment is presenting business owners with challenges they have never faced before. In order to aid business owners, the government has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which expands the availability of small businesses loans under Section 7(a) of the Small Business Act to include the new Paycheck Protection Program.

These funds provide additional working capital to cover payroll costs, mortgage interest, rent, utilities and other operational expenses. In addition to lending funds, the Act provides for forgiveness of the debt and favorable tax treatment under many circumstances.

Some Key Points:

  • Generally considered for businesses with fewer than 500 employees
  • Lending threshold amount of 2.5 times the average total monthly payroll costs of the business, up to $10 million
  • Interest rate of 0.5%
  • Some businesses may be eligible for debt forgiveness up to 100%
  • No collateral or a personal guarantee required

We strongly encourage every one of our businesses owners and partners to evaluate their short- & long-term business plans with their Banker, CPA and Surety Partners and review their cashflow projections based on alternative strategies; from a neutral, liberal and conservative standpoint.

When to Apply: Starting April 3, 2020, small businesses and sole proprietorships can apply. Starting April 10, 2020, independent contractors and self-employed individuals can apply.

How to Apply:  If interested, businesses should contact their bankers immediately to determine eligibility and get in the queue for approval. We believe the $350 Billion will be allocated rapidly and there is no certainty that additional appropriations will be made available in the future.

Additional information, please access the link below:

https://home.treasury.gov/policy-issues/top-priorities/cares-act/assistance-for-small-businesses

We understand this is a difficult time and the impact on your business may be extensive. We are here to help!