The U.S. Senate Committee on Small Business and Entrepreneurship has published an excellent “Small Business Owner’s Guide to the CARES ACT.” The Guide provides the following general information.
1) Paycheck Protection Program (PPP) Loans
This program provides cash-flow assistance via 100% federally guaranteed loans to employers who maintain payroll during this emergency situation. Small businesses with fewer than 500 employees may be eligible. The maximum loan size is $10 million. Costs which may be funded by these loans include: compensation; vacation pay; sick leave; group healthcare benefits; state or local taxes assessed on employee compensation; rent and utilities, among others. An eligible business entity is limited to one loan.
2) Small Business Debt Relief Program
Provides immediate relief to small businesses with non-disaster SBA loans. All loan payments on eligible SBA loans will be covered for six months.
3) Economic Injury Disaster Loans/Emergency Grants
Grants that provide emergency funds up to $10,000 to small businesses harmed by Covid-19 within 3 days of application for an SBA Economic Injury Disaster Loan or EIDL. No repayment is necessary. Allowable uses of this money include: maintaining employees; sick leave and business debts, among others. Eligible businesses must have fewer than 500 employees.
4) Counseling and Training
Companies in need of guidance during these difficult time may turn to a local Small Business Development Center, Woman’s Business Center, or SCORE. These entities will receive additional funding to increase their scope and capacity. Counseling is free and any training will be inexpensive.
Government contractors may have the terms and conditions of their contracts modified, and may be reimbursed due to closure of federal facilities on account of Covid-19.
6) Small Business Tax Provisions
Provides a refundable payroll tax credit for 50% of wages paid by eligible employers to certain employees during the Covid-19 crisis. Wages of furloughed employees are eligible for the credit, as are other business expenses.