This post is relevant for ALL business owners who have been impacted by COVID-19. The CARES Act includes a special loan program, Paycheck Protection Program (PPP), to help facilitate short-term cash flow needs.
Below is a high level
summary of PPP. Attached is a more detailed guide and checklist put together by
U.S. Chamber of Commerce.
1.) You can borrow up to 2.5x your average monthly payroll
expenses, including employer paid benefits (i.e. paid leave, retirement
benefits, health benefits)
2.) The loan are eligible to be forgiven, in full or in part, if,
within the 8 week period from the start of the loan, you retain 100% of your
employees and you used the loan for wages, interest on mortgage, rent and
utilities.
There are other loan
programs available, but PPP is the only one in which the loan can be 100%
forgiven.
I encourage you to contact
your bank immediately to explore various loan options available.
Please stay tuned for
additional updates and stay healthy!
We have great news.
The CARES Act just passed the House of Representatives this afternoon. The
President indicated that he will sign it and it will become law.
The law contains a lot of
benefits – $2 Trillion. The Paycheck Protection Program may directly
help you cover the costs of your employee’s payroll and health insurance for up
to 8 weeks!
The program gives loans to
small businesses that may be forgiven. The US Chamber of Commerce
has a great summary of this program indicating:
“Yes, small
businesses that take out these loans can get some or all of their loans
forgiven. Generally speaking, as long as employers continue paying employees at
normal levels during the eight weeks following the origination of the loan,
then the amount they spent on payroll costs (excluding costs for any
compensation above $100,000 annually), mortgage interest, rent payments and
utility payments can be combined and that portion of the loan will be
forgiven.”
Families First Coronavirus
Response Act FFCRA Update:
The Department of Labor
released much needed guidance that addresses many of the questions we have been
receiving. Please click on the following link to view the Questions and
Answers: https://www.dol.gov/agencies/whd/pandemic/ffcra-questions
I highly recommend you read the document. Of note; the document indicates
that that the sick and FMLA leave starts April 1 (Q1), is not
retroactive(Q13), and does not apply to employees who are not at work because
their workplace is closed (Q23). It appears that the CARES Act will offer
the most help to small businesses and employees who are shut down due to the
Stay at Home order.
Tuesday Morning Webinar:
Every Tuesday morning at
8am, our Law Firm Maynard Cooper is hosting webinars with updated on the latest
COVID laws and news. If you can not make the live webinar, I will send
out the recording later that day. To sign up for the webinar, go
to: https://cc.readytalk.com/registration/#/?meeting=n90lvz6pn7b0&campaign=172n2warnie5
I hope you have a great
weekend. Please stay tuned for additional updates and stay healthy!
