The CARES Act passed late Friday in response to COVID-19 and its impact on the current business environment and the economy. We will continue to gather information and share resources to help all businesses weather the effects from this pandemic.
The CARES Act is a $2.2 trillion bill that provides, among other things, funding to small businesses, helps secure payroll and jobs, and offers needed benefits. This not only includes benefits to business owners but also to independent contractors.
Important things to understand about CARES Act and small businesses:
- $349 million of the $2.2 trillion is allocated to the Small Business Administration to guarantee loans to small businesses
- Businesses with 500 employees or fewer are eligible for these funds
- Self-employed and independent contractors are also eligible
- There is no personal guarantee required
- The maximum amount you can take is equal to 2.5 times your average payroll costs
- For clients, contact us if you need specific information about your payroll costs for the past year.
- Apply through banks and credit unions. Working with your business banker may be a good place to start
- Loans can be used for payroll, rent, utilities, among other things.
It is important to do your due diligence and gather all the appropriate information and documentation to see what works best for your specific business. The above information is hopefully a helpful outline but more details about the CARES Act can be found here: https://www.sba.gov/.