A week after President Donald Trump signed H.R. 748, the CARES (Coronavirus Aid, Relief, and Economic Security) Act, into law following its passage in the House of Representatives, we’re starting to see progress.
My column of last week describing the small business provisions of the CARES Act generated some comments in support and in opposition. Is the “help” to small businesses “really helpful”? In disruptions such as these, only time will tell, and the amount of time needed to make that judgment will not be clear until we know how to beat the coronavirus itself.
Given that state of uncertainty, there is no question that small businesses, the lifeblood of our economy, need help.
First, check out the Paycheck Protection Program. These loans are potentially forgivable based on how you use the proceeds. The amount of the loan that a small business can receive can be substantial. It’s worth taking a look.
To get started, I recommend you read the U.S. Senate Committee on Small Business and Entrepreneurship report called “The Small Business Owner’s Guide to the CARES Act,” an excellent guide, at https://tinyurl.com/v22z3kz. There you will find eligibility requirements, how the loan size will be determined and the circumstances under which it can be forgiven.
Then take a look at a sample application: https://tinyurl.com/qkbgf24. Applications will be processed through Small Business Administration lenders beginning April 3, 2020, according to the Connecticut Business and Industry Association. You can find a list of the 100 most active lenders here: https://tinyurl.com/v9elp3n. Lenders in my home state, Connecticut, are listed here: https://tinyurl.com/u7ba8ee.
Applications will likely be limited to online portals. For example, Manuel Venegas, a communications consultant at Wells Fargo, informed me today (April 2) that Wells Fargo is working on its portal now; the best way to check on progress is to visit https://tinyurl.com/smuuqwm.
Getting the money is one thing. Getting the loan forgiven is another.
Before applying, you have to think about how you would use the funds. In order to be forgivable, the funds need to be used for payroll (with some exceptions), mortgage obligations, rent, utilities and the like. Be sure to understand the specifics.
For the loan to be forgiven, you would apply for forgiveness through your lender. The application would show that the funds you received were used for approved purposes. That means that documentation will be required, such as IRS payroll tax filings; unemployment insurance filings; and documentation verifying payments on covered mortgage obligations, lease obligations and utilities. That sounds somewhat cumbersome, but potentially worthwhile.
If you need a small amount of cash quickly, learn about the Emergency Economic Injury Grant. In this SBA resource, you will find the streamlined requirements to process a request for a $10,000 advance, which your small business can receive within three days of a successful application by providing your bank deposit information. I understand this program is now available. The application is here: https://covid19relief.sba.gov/#/.
You may have a current SBA loan that may be subject to debt relief. Learn about the Small Business Debt Relief Program at https://tinyurl.com/svbo2xu.
Finally, if you need to talk about these or other options, the SBA’s resource partners provide free counseling. Check them out here: https://www.sba.gov/local-assistance/find/.
For more resources, I have a page on my website that I will be updating for you with new developments. Go to https://juliejason.com/coronavirus. There you will find answers to many of your questions about employers, loan applications, economic impact payments and more, as well as analyses provided by law firms.
Julie Jason, JD, LLM, a personal money manager (Jackson, Grant Investment Advisers, Inc. of Stamford, Conn.) and award-winning author, welcomes your questions/comments (firstname.lastname@example.org). Please visit www.juliejason.com.
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