CARES Act Summary

On March 27, 2020, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  One of the main provisions of the Act is the Payroll Protection Program, which was allocated nearly $350 billion.  This program is an extension of the U.S. Small Business Administration 7(a) Program.

In order to qualify for the Payroll Protection Program, an applicant must have less than 500 employees and make a good faith certification that it has been impacted by COVID-19 and will use the funds to retain workers and maintain payroll and other debt obligations.  The amount of the loan that an applicant can receive is up to 250% of its average monthly payroll costs, not to exceed $10 million.

Some additional benefits of the program are:

• SBA fees are waived
• Payments deferred for at least 6 months
• Interest rate not to exceed 4%
• No personal guarantees

Perhaps the biggest incentive with this loan is that some or all of it can be forgiven.  Your expenses over the 8-week period from the loan origination date for eligible payroll costs, utilities, rent, and mortgage interest can be forgiven.

For additional information, please reach out to your advisor at DWD CPAs & Advisors.