In an effort to keep you informed, here is a recap of some of the programs and initiatives in the Coronavirus Aid, Relief, and Economic Security(CARES) Act.
For the full details visit The Small Business Owner’s Guide to the CARES Act published by The Small Business Administration.
Relief for Small Business Owners under the Coronavirus Aid, Relief, and Economic Security (CARES) Act
The Small Business Administration is providing relief for businesses harmed by the Corona Virus Pandemic. The funding available for small businesses is unprecedented in the history of the United States of America. The funding will take the form of low interest federally guaranteed loans. Under certain conditions, some or all of the loan may be forgiven. The SBA defines a small business as a business with 500 or fewer employees. Under the SBA guidelines, Sole-proprietors and self-employed individuals also qualify.
There are two programs under which small business can qualify for loans.
The Paycheck Protection Program (PPP) will provide loans of equal to 2 ½ times your monthly payroll expenses including group health care benefits, insurance premiums, and retirement contributions, limited to an annual salary rate of $100,000. The purpose of this loan is to support small businesses and 501(c)(3) and 501(c)(19) nonprofits that retain their employees through September 30, 2020. This loan may also be used to pay for utilities, rent, and mortgage interest. The interest rate for this loan is capped at 4 %. No personal guaranty or collateral is required. If the borrower doesn’t reduce the number of its employees, or employee compensation by more than 25 % this loan will be forgiven, in effect becoming a grant.
Emergency Economic Injury Disaster Loans (EIDL) are also available to small business. These are loans of up to $2 million and are available to pay expenses that could have been met had the disaster not occurred. Upon submission of an application, the small business is eligible for an Emergency Economic Injury Grant of up to $10,000, which is required to be distributed to the applicant within three (3) days. The Emergency Economic Injury Grant does not need to be repaid under any circumstance, and may be used to keep employees on payroll, to pay for sick leave, meet increased production costs due to supply chain disruptions, or pay business obligations, including debts, rent and mortgage payments. The EIDL can be up to $2 million and is based on demonstrated need. The EIDL has a 3.75 % interest rate, payable over 30 years. The SBA will waive any personal guarantee on advances and loans below $200,000.
If you have any questions please call us at 718-475-2800 or contact us at LegazTeam@kw.com.
RE Broker – Keller Williams Realty Landmark