Information and developments are flying fast these days. With the recent passing of the Coronavirus Aid, Relief, and Economic Security Act (CARES), another SBA program has been made available for businesses to gain much needed access to working capital.
The Paycheck Protection Program, part of the CARES Act, provides a path for businesses, through a participating SBA Lender/Bank, to be able to apply for funds as defined in the program. The loan window will open up on Friday, April 3, 2020. It is advised to wait until your bank sends the application as those applications may be adjusted right through the last minute. The basic elements of the program are:
· Must have 500 or fewer employees (beware of aggregation rules)
· Maximum Loan will be $10 million
· The loan can be forgiven if used for:
o Payroll costs
o Mortgage/Existing Debt as defined
o Other designated costs
o Due to high subscription expectation, not more than 25% of loan forgiveness can be for non-payroll costs
· Provisions for employee retention as defined. Caps re: highly compensated employees
· Debt forgiven will NOT be included as taxable income for federal tax purposes
The links below are official US Department of Treasury links (they are safe).