Please enjoy another video in the Virus Law Vlog Series.
On March 27, Congress enacted the CARES Act. The Act is 335 pages long and covers a lot of ground. For our business clients, we think that these two things will be of the most interest:
- Paycheck Protection Program (PPP) Loans: small businesses, non-profits, and sole proprietors and gig workers can obtain a forgivable (yes, forgivable!) loan in the amount of 2.5 times their monthly payroll costs. If the loan is properly used for allowed expenses (payroll, rent, and a few other items), then it may be forgiven. This means that it is essentially a free grant of money to eligible borrowers. It will be a desperately needed cash injection for struggling businesses, intended to keep their employees and owners employed and paid.
- Deferment of Existing SBA Loans: payments on existing SBA loans that are in good standing will be automatically deferred for six months. During that time, the government will make the payments (or principal and interest), and the borrower will receive full credit for these payments. This will be a huge relief for those businesses that already have an SBA loan.
Watch as Greg Brockwell discusses the small-business of the CARES Act in the video above. Today the SBA has provided the following overview and guidance.