The CARES Act
The US government has just passed the CARES Act to help small businesses (under 500 employees) stay afloat. You should consider applying for a $10,000 SBA Economic Injury Disaster Loan (EIDL).
SBA Economic Injury Disaster Loan (EIDL)
The CPAs we work with recommend it for all small businesses – but please consult with your CPA to determine if this is right for your business. Under the CARES Act that was just passed, borrowers can receive $10,000 in an emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue loss.
If the CARES Act is applied properly, this would be a free $10,000 to help you cover employee salaries and lease payments as your revenue numbers decrease. The only accounting calculation required would be a revenue figure from February 1, 2019 through January 31, 2020. We’ve run through the application online and it takes about 15 minutes.
Here is the link – https://covid19relief.sba.gov/#/
PPP Loans (Paycheck Protection Program SBA Loans)
For larger loan assistance, the CARES Act also provides for PPP Loans (Paycheck Protection Program SBA Loans). This is the link for the PPP application form:
The formula to determine the amount of the PPP loan is 2.5x your average monthly payroll. Again, please review with your CPA and review information provided by the federal government to look at what loan funds must be used for and loan forgiveness rules, but this program appears to be formulated to significantly help during the economic downturn we are currently experiencing by providing loan assistance at very low interest rates and the likelihood that the loans will be forgiven and not need to be paid back if used for appropriate expenses during the 8-week period beginning on the loan date, such as payroll costs, interest on covered mortgage obligations, rent, and utilities.
If you need assistance with the foregoing or other COVID 19 issues, you might consider contacting Scott Meyer via the contact form on his bio page.
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About Scott A. Meyer
Scott Meyer focuses his practice on Corporate and Intellectual Property matters. His Corporate practice includes a broad spectrum of services including entity formation, business transactions, operational agreements and contracts, sales, acquisitions and mergers of businesses, corporate governance and employment matters.
His Intellectual Property practice includes trademark, licensing and various service agreements for corporations.Read more…