Other Provisions within Title I of the CARES Act

Last week Congress provided relief for Americans, businesses, and healthcare institutions through a record stimulus deal in response to the COVID-19 pandemic, The Coronavirus Aid, Relief, and Economic Security Act (CARES).  The Senate passed H.R. 748 Wednesday March 25, 2020, later approved by the House on Friday March 27, 2020, and ultimately signed by the President on March 27, 2020.

Other Provisions found in Title I: Keeping American Workers Paid and Employed Act

The majority of the Keeping American Workers Paid and Employed Act is focused on lending to small businesses to allow for payroll to be maintained during the COVID-19 pandemic.  We will address only the minor provisions of Title I here.  Additional installments will address the other major components of The Coronavirus Aid, Relief, and Economic Security Act (CARES).  You may access the full text of the law at the following link: https://www.congress.gov/bill/116th-congress/house-bill/748/text/enr?q=%7B%22search%22%3A%5B%22hr748%22%5D%7D&r=1

The less impressive section of Title I focuses on increases in SBA Express loan maximums, economic injury and disaster loan grant funds, and SBA Loans originated under the Community Advantage Pilot Program.

SBA Express Loans Increased Amount

As part of the Act, SBA express loans were increased from $350,000 to $1,000,000.

Economic Injury Disaster Loan Grants

The Act also allocates $10 billion in grant funds up to $10,000 per business entity that must be disbursed within 3 days of application received. The administrator will verify eligibility and certification.

Funds can be used for providing paid sick leave to employees unable to work due to the direct effect of COVID-19, maintaining payroll to retain employees during business interruptions or substantial downturns, meeting increased costs to obtain materials unavailable from original sources, making rent or mortgage payments, and repaying obligations that cannot be met due to revenue losses.

No repayment is required if used for appropriate purposes. This program ends on December 31, 2020 or until funds have been exhausted.

Relief for 6 Months for Certain Currently Outstanding SBA Loans

For those SBA loans originated under the Community Advantage Pilot Program, the Act sets aside funds to pay the principal, interest, and any associated fees for 6 months after enactment.

Where to Go to Apply

For SBA Express Loans, visit www.SBA.gov.

For Economic Injury Disaster Loan Grants, visit https://www.sba.gov/disaster/apply-for-disaster-loan/index.html

For relief relating to certain currently outstanding SBA Loans, those qualifying should automatically be receiving the assistance. For further details visit www.SBA.gov.

What may be most impactful for the small business owner is knowing the options available to you for loans, possible grants, and existing SBA loans. Also, in the event you do have to lay off employees, or already have, there are provisions for Unemployment Insurance in Title II of the Act.  Future installments will cover other provisions of the CARES Act that we find will provide value for our clients.

As your trusted advisors, we are committed to keeping you well-informed with any new legislation passed by Congress as well as any new pronouncements by the Department of Treasury that may affect you. Please do not hesitate to reach out to KHA with any additional questions you may have.  

These sources are simply included for informational purposes. KHA Accountants, PLLC, its partners and others do not provide any assurance as to the accuracy of these items or the information included therein. As such, KHA Accountants, PLLC cannot be held liable for any information derived from referenced sources. This by no means is a recommendation to obtain a loan or attempt to apply for a loan. There are many unknowns at this time regarding what other stimulus (grants or other loan options) that may become available with pending and future bills, executive orders, or emergency declarations to follow, that may become laws. Consult your legal and business advisors prior to making financing decisions. This is intended for illustrative and discussion purposes only.