The CARES Act was signed into law by President Trump on March 27, 2020, containing several provisions to aid small businesses during the COVID-19 crisis. At this time, we are still waiting for guidance and clarification of many items in the law.
We recommend the following actions at this time:
1. Apply for an Economic Injury Disaster Loan (EIDL) at the SBA website. You will need to provide information for your gross receipts and cost of goods sold for the period 2/1/19 – 1/31/20. The SBA will use this information to compute your loan amount. Be sure to check the box to receive an advance of up to $10,000. The $10,000 advance is a grant which will not have to be repaid.
Apply at https://covid19relief.sba.gov/#/. Please contact our office if you would like assistance in completing the initial loan application process.
Once the initial application process is complete, the SBA will likely need additional information to determine your eligibility and to calculate your total loan amount.
2. Begin gathering information to apply for a Paycheck Protection Program (PPP) loan. These loans will be administered by banks and credit unions. The PPP funds may be used for payroll costs, rent, utilities, and interest expense. The loan will be forgiven to the extent the funds are used for qualified funds during an eight–week period. The Treasury is expected to release additional information by Friday, April 3, 2020. If you have worked with an SBA lender in the past, be sure to contact your lender to let them know of your interest in the program. Many lenders are creating mailing lists to disseminate information as quickly as possible once additional rules and regulations have been released.
Note that the loans/grants are intended to assist in paying operating expenses that are impacted by the COVID-19 pandemic. The PPP funds cannot be used to pay the same funds as the EIDL funds, but it is important to start with the EIDL application in order to receive the emergency grant as soon as possible.
Our office is working hard to learn about these new laws and are staying updated as additional guidance is issued. We are available to assist wherever needed. Please contact us for additional information.