Overview

The Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, provides relief for U.S. families and businesses.  The act created the Paycheck Protection Program under the Small Business Administration (SBA), and it is designed to help small businesses and their employees through the COVID-19 crisis. It includes provisions for loans that, under certain criteria, may be forgiven. This means that a portion or all of the loan will be converted to a grant if the criteria is met.

These federally guaranteed SBA loans are available to businesses with 500 or fewer employees, including corporations, independent contractors, partnerships, sole proprietorships, tribal businesses, veterans organizations, and certain nonprofit organizations.

Here, we’ll provide and FAQ, forms, bank links, updates, and other resources. Because information is evolving, so be sure to check back often.

[Updated 05/14/20]

DEADLINE EXTENDED TO MAY 14: For the Paycheck Protection Program, the SBA has issued important new guidance (05/05/20) regarding certification. In the new guidance, the language in Question 31 has caused some concern regarding “current economic uncertainty.” Question 9 lends some help in the definition of the term, but there is still uncertainty. For public and private companies with substantial market value and access to capital, it is unlikely that they will be able to make the required good faith certification.

Those companies that applied for a loan have until May 14 to pay back the loan in full if they feel they will not be able to certify under the stipulated conditions. If you applied for the loan and are concerned that you may not qualify, we strongly suggest you consult with your legal counsel, lending institution, and/or SBA representative.

A lot of concern remains regarding who in fact is eligible for PPP loans.  Some have thought about returning the money due to lack of clarity regarding eligibility. Regardless of the size of their PPP loan, we continue to recommend that clients document their circumstances and the impact of COVID-19 on their business and keep that documentation in their permanent record.  Also, it is still encouraged that they review their eligibility with their legal counsel.

The good news in Q #46:

• • PPP Loans less than $2 Million: A safe harbor is being instituted for all borrowers receiving less than $2 million. These companies “will be deemed to have made the required certification concerning the necessity of the loan request in good faith.”
  • PPP Loans $2 Million or more: No safe harbor, but during the loan review process, if its determined that the borrower was not eligible, the SBA will seek repayment of the loan and not grant forgiveness. If the loan is repaid, then the SBA will not pursue administrative enforcement or referral to other government agencies.

Resources