CARES ACT Passes Congress
This afternoon, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and it will be sent to the President to be signed. Below please find highlights of the various programs:
SBA Loan Program
• $350B has been set aside for small businesses of fewer than 500 employees.
• These monies must be used to retain (or rehire) employees and/or pay rent and utilities.
• The loan formula is 2.5 times a business’s monthly payroll.
• A business must be able to illustrate a significant loss in business due to COVID-19, although this threshold has not been defined.
• Borrower shall be eligible for loan forgiveness equal to the amount spent by borrower during an 8-week period after the origination date of the loan on payroll costs, interest payment on any mortgage incurred prior to February 15, 2020, payment of rent on any lease in force prior to February 15, 2020 and payment on any utility for which service began before February 15, 2020.
• SBA feels they can get these loans processed and funded in the next 2 weeks.
Unemployment and Stimulus Packages
• Unemployment: Increases by $600 per week for 4 months.
• Stimulus Package: $1,200 per adult/$2,400 couple, plus $500 per child, with a tiered approach for salaries below $75,000 per person/$150,000 household, with decreasing payments for households up to $90,000 per person/$180,000 household.
For additional details go to: