Coronavirus Aid, Relief, and Economic Security (CARES) Act

Summers Compton Wells LLC has been closely monitoring legislative and regulatory developments concerning the COVID-19 (coronavirus) pandemic to help business owners understand how to respond to the coronavirus pandemic. 

 

Updated April 3, 2020.

 

CARES Act

The firm has prepared some resources that might be useful to small businesses, including self-employed individuals and sole-proprietors, under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act).  This law was signed by the President on March 27, 2020, as part of the ongoing federal effort to provide relief to small businesses affected by the COVID-19 pandemic.  This new law includes a new Paycheck Protection Program,  a subsidy for existing SBA loans, and expanding relief under the SBA’s existing Economic Injury Disaster Loan (EIDL) program, which was signed into law on March 6, 2020.  The CARES Act also provides certain tax relief and other tax benefits for employers.  All of these relief measures are discussed in the summaries below.

 

CARES Act Summary

 

CARES Act Tax Summary

 

Paycheck Protection Program

The Treasury Department has also published a helpful summary of the Paycheck Protection Program, along with details about the application process. These materials, originally published here, are linked below and confirm the following:

 

  • Applications for small businesses and sole proprietorships can be submitted starting this Friday, April 3.
  • Applications for independent contractors and self-employed individuals can be submitted starting on Friday, April 10.
  • Lenders are required to process applications by June 30, 2020.
  • Applications will be required to submit payroll documentation.
  • Interest rates will be 0.50% fixed.
  • Loan maturity will be 2 years.   
  • Loan terms will be the same for all borrowers.

 

Small Business Paycheck Protection Program Overview

 

Borrower Information - Small Business Paycheck Protection Program

 

Lender Information - Small Business Paycheck Protection Program

 

Loan Application Form - Paycheck Protection Program

 

We encourage all interested parties to contact their current lender or another SBA-approved lender now to confirm the application process and to help prepare and assemble their application in advance of April 3 or April 10, as applicable.  Keep in mind that PPP funding is, currently, capped at $349 billion and borrower interest is expected to be very high.