Coronavirus Aid, Relief, and Economic Security (CARES) Act
The Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act last night. The House has not voted yet on the bill. If it passes in the House, it will then go to the President’s desk for signature. You can find an updated version of the bill here.
The U.S. Senate Committee on Small Business & Entrepreneurship issued a press release yesterday outlining many aspects of the proposed bill. That press release can be found here.
CARES Act FAQs:
1. Has the CARES Act been signed into law?
No, the CARES Act was passed in the Senate, but must still be passed in the House and signed by the President.
2. Does the CARES Act provide relief to small businesses?
Yes, the CARES Act, as currently drafted, provides for $349 billion in loans for small businesses to cover expenses like payroll, rent, and utilities. Portions of these loans will not need to be repaid.
3. What government agency will administer the loan program?
If the law passes, the SBA will be tasked with implementing these federal loans. It appears these loans will be managed and approved through the SBA’s 7(a) loan program and through its approved 7(a) lenders. More information about the current 7(a) loan program can be found here.
4. How much will a small business be able to borrow?
As currently drafted, small businesses would be able to obtain 7(a) loans for up to $10 million.
5. Can small businesses use these loans for payroll and, if so, will small businesses have to repay the payroll portion of its loan?
A small business who qualifies for the loan can get up to 8 weeks of its average payroll and other costs forgiven if the small business retains its employees and their salary levels. These requirements have been generally outlined in the bill. The specific requirements for loan approval and forgiveness will be outlined once the federal government issues guidance and regulations.
6. What period of time will the SBA 7(a) loan program cover?
The Act allows for the loan program to run from February 15, 2020 through December 31, 2020.
7. Does the CARES Act provide for grants as well?
As currently drafted, yes, the Act provides up to $10,000 in grants to qualifying small businesses. More information on those grants can be found here.
Families First Coronavirus Response Act (FFCRA)
The Department of Labor released guidance yesterday on the Families First Coronavirus Response Act (FFCRA), which goes into effect on April 1, 2020. The DOL also released the FFCRA poster, which can be found here.
CDC Guidance UpdateThe Centers for Disease Control (CDC) released interim updated guidance for businesses and employers that can be found here. The updated guidance includes additional tips on maintaining a healthy workplace and on educating employees about the coronavirus.