General Update regarding the Stimulus Bill for Individuals and Employers

Dear Clients:

If your company’s or your business is affected by COVID-19, please make sure to apply for this loan asap! It’s on a first come first serve basis and is almost free money if you used the amounts to cover basic operating expenses.  Please read the link below from CNBC for additional details.

The loan application starts this Friday.

Paycheck Protection Program

The CARES Act provides for Payroll Protection loans of up to $10 million to COVID-19 impacted businesses.

The loans:

  1. Are guaranteed 100% by the Small Business Administration (no personal guarantees or collateral required);
  2. Must be taken out between February 15, 2020, and June 30, 2020 (the “Covered” Period);
  3. May be forgiven for amounts used to cover basic operating expenses such as payroll costs, rent and mortgage, and utilities for up to two months from the loan origination date (excluded from COD income); and
  4. Have a maximum maturity rate of 10 years and 4% interest if not forgiven

Businesses (including, sole-proprietors, independent contractors, and other self-employed individuals) with fewer than 500 employees are eligible for the Paycheck Protection Program.  Some limited exceptions to the 500-employee eligibility requirement applies to certain industries.

The maximum amount you can borrow is 250% of the business’s average total monthly payroll costs (based on a 12-month look back), not to exceed $10 million.  Your “payroll costs” include compensation paid to employees and self-employed contractors, capped at $100,000 per year per individual (prorated over the “covered” period). 

A business obtaining a loan through the Paycheck Protection Program will not be able to use the payroll tax credits available under the Families First Coronavirus Act for employee retention or the deferral of employer-side social security payroll taxes under the CARES Act.

For more details about the eligibility and terms under Paycheck Protection Program, please find below link for more details:

https://www.natlawreview.com/article/cares-act-paycheck-protection-program 

Please read this link.

https://www.cnbc.com/2020/04/01/small-businesses-grapple-with-paycheck-protection-program-in-stimulus.html

For more information please contact Kimberly@erb.co.il