CARES LOANS ARE ON THE WAY – BUT NOT TODAY…
Positive revenue and cash flow, even in a good economy is often a struggle for us. But now it has turned into one of the most, if not the most, important obstacles many of us are facing.
The Coronavirus Aid, Relief and Economic Security (CARES) Act signed into law on March 27th, 2020 is intended to provide direct financial aid to American families, payroll and operating expense support for small businesses, and loan assistance for distressed industries.
Under the CARES Act, qualifying businesses include:
- Businesses with up to 500 employees or which meet the applicable size standard for the industry as provided by SBA’s existing regulations.
- Businesses in the accommodation and food services industries with more than one physical location but no more than 500 employees at each location.
- Nonprofit organizations (501C(3) ~ that sadly excludes Chambers of Commerce.
- Eligible independent contractors and sole proprietors.
- Loans will be available through SBA and Treasury approved banks, credit unions, and some nonbank lenders.
- Borrowers can borrow 2.5 times their monthly payroll expenses, up to $10 million.
- Applicable uses for the loan proceeds include (1) qualified payroll costs; (2) rent; (3) utilities; and (4) interest on mortgage and other debt obligations.
Loan forgiveness is available for funds used to pay 8 weeks of payroll and other qualified expenses.
Please be patient! There is no application process at this time.
The SBA has 15 days from when the act was signed into law to produce a program guide. That means they have until April 11 to roll out the rules and processes to qualifying financial lenders.
We encourage you to contact your bank or credit union representative so they can keep you in the loop. It is hoped that the application process will begin as early as the end of the week. But please keep in mind – the SBA has until April 11 to work out all the details.
Deep breaths everyone!