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The “CARES” Act -- Can it Help Your Business?

Posted on in Business Law

Elgin small business attorney CARES act covid-19Over the weekend, the United States Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides new programs and initiatives intended to assist small businesses, as well as certain non-profits and other employers.

Do You Need:

1. Capital to cover the cost of retaining employees?

Paycheck Protection Program (PPP) loans will provide cash-flow assistance to employers through 100% federally-guaranteed loans. The loans are available for employers are who maintaining their payroll during the coronavirus emergency and are eligible to be forgiven if the payroll is maintained. Borrowers are eligible for loan forgiveness for up to eight weeks of their payroll, depending on employee retention and salary levels. 

Eligibility: 

  • Your business must have been in operation on February 15, 2020.
  • Small business, other business concerns, nonprofits, and veterans’ organizations with fewer than 500 employees.
  • Sole proprietorships, independent contractors, and certain self-employed individuals, among others.

Costs can the loan proceeds cover:

  • Compensation (salary, wage, commission, or similar compensation, payment of cash tip or equivalent)
  • Costs related to maintaining group health care benefits during periods of paid sick, medical, and family leave, and insurance premiums
  • Payment for vacation, parental, family, medical, or sick leave
  • Payment of any retirement benefit
  • Payment of state or local payroll tax

2. A small amount of cash that will allow you to cover your immediate needs?

Economic Injury Disaster Loans & Emergency Economic Injury Grants are available for small businesses that apply for an SBA Economic Injury Disaster Loan (EIDL).

  • The emergency advance is up to $10,000.00.
  • The advance will not need to be repaid under any circumstances.
  • The advance can be used to maintain employees on payroll, pay for sick leave, address increased production costs attributable to disruptions of the supply chain, or pay certain business debts and obligations, including mortgage or rent payments.

3. To address concerns about your ability to remain current on payments for an existing or potential SBA loan?

Small Business Debt Relief Program:

  • SBA will cover all loan payments for non-disaster SBA loans for six months.
  • The loan relief will include payments for principal, interest, and fees.
  • Debt relief under this program will not apply to PPP loans. 

The programs are expected to be available soon. To remain up to date on the availability of these programs, contact your local Small Business Administration (SBA) District Office. If you have any questions about how to address legal issues that may affect your business during the coronavirus crisis, contact our Kane County business law attorneys at 847-695-2400.

For assistance in applying for an available SBA loan, and to locate an SBA Resource Partner, go to:

https://www.sba.gov/local-assistance/find/

For the Comprehensive Guide to the CARES Act by the U.S. Senate Committee on Small Business & Entrepreneurship, go to:

https://www.sba.gov/public/index.cfm/guide-to-the-cares-act

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