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CARES Act SBA Loan Updates

Posted by Admin Posted on Mar 29 2020

Note: President Trump signed legislation on April 24 to expand funding to the Paycheck Protection Program budget and the small business Economic Injury Disaster Loan. If you tried to apply before and did not obtain funds in the first round, we encourage you to contact your lender to ensure they have the information needed to process your application. The SBA will start accepting applications at 10:30 a.m. on Monday, April 27.

The CARES Act provides additional funding and resources to the U.S. Small Business Association (SBA) for a new program called the Paycheck Protection Program (PPP), which is authorized to provide federally-guaranteed loans to small businesses.

Paycheck Protection Program Loans
PPP loans assist small businesses with fewer than 500 employees, certain non-profits and other employers with immediate needs. This program is designed to help employers maintain payroll and pay eligible expenses including insurance, rent, mortgage and utilities. Some of the features include:

  • 100% federally guaranteed loans.
  • The loan size is based on a maximum of $10 million or 2.5 times the average monthly payroll costs.
  • The average monthly payroll cost is based on costs incurred from February 15, 2019, through June 30, 2019, if you were in business during that time period. If you were not in business during that time period or if you employee seasonal workers, the options are different.
  • The eligible payroll costs for determining the loan size include compensation (up to $100,000 per employee), payments for group health care benefits, and payments of retirement benefits.
  • The amount of the loan that will be forgiven is based on 8 weeks of payroll costs, plus any payment of interest on a covered mortgage obligation, plus covered rent obligation, plus any covered utility payment. It will be proportionate to employee retention and wages as compared to an 8-week period from the prior year or another time period.
  • The loan forgiveness will not be considered taxable income.
  • The application process for the loan forgiveness will be through an eligible lender.
  • There are no SBA fees, credit requirements or prepayment fees.
  • Loan payments can be deferred a minimum of 6 months and up to 12 months.
  • It is also available for sole proprietors, independent contractors and some self-employed individuals.
  • Borrowers can apply for PPP loan and EIDL (also traditional 7(a) loans and 504 loans) simultaneously, but borrowers may not use the PPP loans for the same purpose as other SBA loans. For example, if a borrower uses PPP to make payroll for eight weeks, the borrower may not use EIDL funds for those same payroll costs.  However, EIDL funds could be used for payroll outside of those eight weeks.
  • Amounts not forgiven or repaid by December 31, 2020, will convert to a 10-year loan at maximum 4% interest rate
  • If you take advantage of the PPP loans you are not eligible for the employee retention credit for employers or delay of employer payroll taxes described in the CARES Act information for businesses located here.


Find an SBA-approved lender to learn more, see if your business is eligible and apply for assistance. Businesses must apply by June 30, 2020. Additional assistance and guidance for small businesses has been provided by the US Department of the Treasury.

Other available programs include:

  • Small Business Debt Relief Program: SBA covers all payments and fees for six months on non-disaster, microloans, 504 loans, or PPP loans through the SBA.
  • Economic Injury Disaster Loans (EIDL) & SBA Express Bridge Loan: Low-interest loans to small business and non-profits that have been severely impacted by COVID-19 and assistance bridging the gap until the EIDL is disbursed
  • Economic Grants: Emergency grant advance of up to $10,000 for businesses impacted within a three-day timeframe of applying for an economic injury disaster loan.
  • Small Business Contracting: Government agencies can modify terms and conditions that apply to government contractors, allowing for reimbursement, paid leave and sick leave in qualifying situations.


To see if any of these programs may be a good option for your business, please contact us, your lending institution, or review the SBA website relating to the COVID-19 Coronavirus.

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