Nice to have friends in the right places. As your partner in helping build your great Company, we are pleased to release this information to our clients, partners, and friends. Yes, it was actually $2.2 trillion.
Here is your essential information for making the right best decision. Now law, it is important to understand that there are two programs in play:
- Economic Injury Disaster Loans (separate from $2 trillion emergency relief act; direct from SBA; $2 million cap; a term loan)
- Payroll Protection Progam (within the $2.2 trillion, $7 billion to small businesses affected by COVID-19; from one of 10 banks and 100% backed by US Government; 3.75% interest rate for companies). Federal Law here.
The rest of this post focuses on CARES Act. The US Federal government anticipates applying the 7a program – this is existing Small Business Association loan mechanism to deploy funds to small businesses. Small business is defined as fewer than 500 employees.
The loans will be 100% guaranteed by the Federal government. The loan will be forgiven several months later when you prove that the money was spent to pay:
- Paid or sick medical leave
- Insurance premiums
- Rent or lease payments
- Utility costs
- Mortgage payments
- And any other debt obligation
Once you demonstrate that the loan was spent on these items, the loan is effectively expected to then convert into a grant.
For assistance, the non-profit mentoring organization SCORE is helping small businesses with applications.
Loan amounts shall be determined based on the two months of costs that the small business incurred in the 60 days prior to 2/15/20. Potential for up to 4 months. The maximum loan in the Senate version is currently $10M.
More as we learn about it. As always, feel free to reach us directly on (650) 937-9164 and firstname.lastname@example.org.