Important Update Regarding Small Business Loans Under the Cares Act
IMPORTANT UPDATE REGARDING SMALL BUSINESS LOANS UNDER THE CARES ACT
The U.S. Department of Treasury issued guidance on March 31, 2020 regarding the $349 billion dollar Payment Protection Program (PPP) established by the CARES Act. The legislation provides for job retention loans to cover eight weeks of payroll and certain qualified expenses for overhead. The applications are expected to be accepted starting on April 3, 2020. Applications can be submitted to participating SBA 7(a) lenders, banks and credit unions.
The press release is available at: https://home.treasury.gov/news/press-releases/sm961
An overview of the program is available at: https://home.treasury.gov/system/files/136/PPP%20--%20Overview.pdf
Information for borrowers is available at: https://home.treasury.gov/system/files/136/PPP%20Borrower%20Information%20Fact%20Sheet.pdf
The application is available at: https://home.treasury.gov/system/files/136/Paycheck-Protection-Program-Application-3-30-2020-v3.pdf
Small businesses are also reminded that they can apply for an Economic Injury Disaster Loan (EIDL). The EIDL includes an option for up to a $10,000 advance that is available within 3 days of filing an application. The emergency advance does not have to be repaid.
More information and the application are available at: https://www.sba.gov/disaster-assistance/coronavirus-covid-19#section-header-1
For small businesses that applied for an EIDL as a result of COVID-19 prior to March 30, 2020, the advances have been backdated to January 31, 2020. If your business has already applied for an EIDL, the business can still receive the advance. These applicants will have to go through the new application process and select the option that says “I would like to be considered for an advance of up to $10,000.” You will essentially need to re-apply. This re-application process will not slow down the previous application. Regardless of whether the business is approved for an EIDL, the business will receive the advance.
To re-apply, the application is available at: http://covid19relief.sba.gov/#/
*The Attorneys at Levene Gouldin & Thompson, LLP are available to provide advice and counsel concerning these new statutory obligations and other matters related to COVID-19.