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What’s in the CARES Act for Small Businesses: Loan and Grant Programs


More than $349 billion of the $2+ trillion emergency economic aid legislation signed into law late last week is earmarked for small businesses and some nonprofits reeling from the unprecedented financial impact of COVID-19. Here’s what you need to know about what’s available and how to access the aid.

If you are a small business or nonprofit with 500 or fewer employees, it’s likely that your organization will qualify for some form of assistance under the CARES Act.

Paycheck Protection Program (PPP) Loan

This program provides cash flow assistance through 100% federally guaranteed loans to employers who maintain their payroll during the COVID-19 outbreak. In addition to payroll, borrowers may use loan proceeds to cover the continuation of group health care costs, mortgage interest, rent, utilities and interest on other debt obligations incurred before the covered period. Here are the key program details:

  • Maximum loan size is based on a 2.5x multiple of monthly average payroll or $10 million, whichever is less
  • Loan forgiveness for up to eight weeks of proceeds spent on eligible expenses based on employee retention and salary levels
  • No SBA fees
  • At least six months of payment deferrals with maximum deferrals up to one year
  • 501(c)(3) and 501(c)(19) nonprofits with fewer than 500 employees are eligible

Small Business Debt Relief Program

This program is designed for non-disaster SBA loans: 7(a), 504 and microloans. For up to six months, the SBA will cover all loan payments for these loans, including principal, interest and fees. New borrowers who take out loans within six months of President Trump signing the bill into law will be eligible as well.

Economic Injury Disaster Loans & Emergency Economic Injury Grants (EIDL)

Small businesses and some nonprofits may receive an emergency advance of up to $10,000 if they were harmed by COVID-19. To access these funds, you must first apply for an EIDL and then request the advance. The advance does not need to be repaid. The funds must be used to:

  • Keep employees on payroll
  • Pay for sick leave
  • Meet increased production costs due to supply chain disruptions
  • Pay business obligations like debts, rent and mortgage payment

In addition to these loan and grant programs for small businesses, aid is provided to businesses in the form of tax-related provisions, detailed here. Contact your Brown Smith Wallace advisor for assistance on applying for an SBA loan program.


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