The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provided a couple options for financial relief from the impact of reduced hours and services during the COVID-19 crisis:

Paycheck Protection Program (PPP) Loan Forgiveness

The US government has allocated $349 billion to the SBA to guarantee loans to small businesses:

  • Apply through banks and credit unions, especially your current banker
  • Payment deferral is 6-12 months depending on the institution
  • There are no fees (unlike disaster relief loans)
  • They are “7(a) loans”
  • Business does not need to be shut down partially or completely, just in business since Feb. 15th
  • Good for self-employed and independent contractors, too
  • No personal liens or guarantees
  • Can receive up to 2.5 times your “payroll period” which is an average monthly payroll costs during the one-year period prior to the loan. New businesses who have payroll expenses in January and February 2020 can use those averages to determine amount qualified for.
  • For example, a business with average monthly payroll costs of $100,000 a month can borrow up to $250,000. Costs included when establishing the amount of the loan:
    • Employee salaries, wages, commissions, tips etc.
    • Employees/owner compensation over $100,000 per year[1], are capped at $8,333.33 per month
    • Payment for vacation, parental, family, medical or sick leave
    • Severance payments
    • Group health insurance premium
    • Retirement plan contributions by the employer
    • State and local taxes assessed on such compensation
  • If you took a “disaster loan” prior, then your loan amount can be increased to include a refinancing of the disaster loan

SBA Disaster Loans (EIDL) program:

Small businesses (500 employees or fewer) affected by COVID-19 are eligible to apply for a long-term low-interest loan providing up to $2 million in working capital.  An EIDL is limited to providing working capital that is unavailable from other sources, as determined by the U.S. Small Business Administration (SBA), for an eligible business to continue operations until the effects of the declared disaster have passed.

The APPLICANT must establish that the claimed economic injury is substantial and is a direct result of the declared disaster. Substantial economic injury generally means a decrease in income from operations or working capital with the result that the business is unable to meet its obligations and pay ordinary and necessary operating expenses in the normal course of business.  The business does not have to be shut down completely or even partially – just impacted financially.

  • New streamlined application process
  • 3.75% interest rate for small businesses
  • Deferred payment for 12 months after first disbursal
  • Emergency grants of up to $10,000 ($1,000 per employee up to a total of $10,000) are available for immediate relief within three days of applying[1] if in business since January 31, 2020
  • Deposits are marked “SBAD TREAS 310 – MISC PAY”
  • EIDL applied after January 31 are also eligible for this grant
  • Personal guarantees waived on loans less than $200,000[2]


PURPOSE Paycheck Protection Program Forgivable if used for payroll (minimum of 75% of the funds received) and the remaining for certain operating expenses (amount of any EIDL advance is not forgivable) Full EIDL Loan To meet financial obligations and operating expenses that could have been met had the disaster not occurred (amount of any EIDL advance is forgiven)
TERMS Up to $10 million

1% interest rate

Up to $2 million

3.75% for businesses

2.75% for non-profits


YES – EIDL Advance

MATURITY 2 years 30 years
FIRST PAYMENT DUE Deferred 6 months Deferred 1 year


CARES Act Provider Relief Fund

This funding will be used to support healthcare-related expenses or lost revenue attributable to COVID-19 and to ensure uninsured Americans can get testing and treatment for COVID-19.
$30 billion is being distributed immediately – with payments arriving via direct deposit beginning April 10, 2020 – to eligible providers throughout the American healthcare system. These are payments, not loans, to healthcare providers, and will not need to be repaid.

According to Health & Human Services (HHS):

This quick dispersal of funds will provide relief to both providers in areas heavily impacted by the COVID-19 pandemic and those providers who are struggling to keep their doors open due to healthy patients delaying care and cancelled elective services.If you ceased operation as a result of the COVID-19 pandemic, you are still eligible to receive funds so long as you provided diagnoses, testing, or care for individuals with possible or actual cases of COVID-19. Care does not have to be specific to treating COVID-19. HHS broadly views every patient as a possible case of COVID-19.

  • Within 30 days of receiving the payment, providers must sign an attestation confirming receipt of the funds and agreeing to the terms and conditions of payment. The portal for signing the attestation will be open the week of April 13, 2020, and will be linked on this page.
  • HHS’ payment of this initial tranche of funds is conditioned on the healthcare provider’s acceptance of the Terms and Conditions – PDF, which acceptance must occur within 30 days of receipt of payment. Not returning the payment within 30 days of receipt will be viewed as acceptance of the Terms and Conditions. If a provider receives payment and does not wish to comply with these Terms and Conditions, the provider must do the following: contact HHS within 30 days of receipt of payment and then remit the full payment to HHS as instructed.  Appropriate contact information will be provided soon
  • Deposit will be marked “US HHS Stimulus”

[1] US Senate Committee on Small Business Entrepreneurship:  Small Business Guide to the CARES Act

[2] CARES Act offers relief from personal guarantees for emergency loans as well as loan forgiveness

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